Changes in Food Development, Marketing and Distribution to Consumers

“CHANGE HAS NEVER HAPPENED THIS FAST, and it will never be this slow again.”

Andria Long, Growth Advisor, drew upon her years of innovation experience working with consumer-packaged goods (CPG) companies to lay out thought-provoking challenge scenarios for the future food and beverage industries.

Long continued, “Consumers remain at the center of everything.” Pointing to the success of Apple, Inc., she said that innovation is “all about solving consumers need in new ways; they may not know what they need, but when you speak with them, they can clearly tell you what makes them dissatisfied.” So, where to start?

“Convenience is still king!” she continued. “We are spoiled. We don’t even like to cut or peel stuff anymore. It may cost more, but we prefer ‘grab and go.’ And nobody likes to clean utensils…we now want our portion-controlled meals and side dishes purchased and cooked in the same package,” she said.

Then came the gradual retreat of grocery shopping in the onslaught of online economy, for which delivery times have gotten shorter and shorter. “I remember when it used to take one to two days to get a home delivery. Now, I can receive my orders within one-to-two-hour time frames,” said Long. This has also shifted expectations, as “food on demand” rests only a smart phone away from the consumer’s couch.

Fast, home-based delivery services still have growing pains. Long elaborated, “I once ordered a meal kit and was shocked to find that the instructions were overwhelming. Not only that, but they expected me to cut and peel the ingredients. Come on…we don’t do these things anymore…the service failed to reflect my inability to cook!”

Long views Amazon.com as the great game-changer behind this trend: “Amazon rained us to expect not to have to wait for our electronic orders.” Beyond grocery, the U.S. has experienced a proliferation of ready-to-eat home delivery services in urban areas (e.g., GrubHub), she noted.

Small companies are proliferating in this environment. “The market research company, IRI, just published its top-100 company list of pacesetters and, for the first time, small companies represented more than 50% of that list.” But average company lifespans are also declining. Part of this “surge and churn” environment is attributable to lowered barriers to market entry.

At one level, just about anyone can now gain entry into the food industry through sub-contracted services and relationships. Traditional barriers to entry, such as access to manufacturing and distribution systems, are disappearing. For many large CPG companies, said Long, “retailers have now become competitors,” with their private label acting more like brands.

Entrepreneurship has become easier, as expertise is now readily available through innovation incubators, contracted expertise or on-line services. Capital is also more available. “I’ve been shocked by how many entrepreneurs in the Chicago-area start-up community openly say they didn’t know anything about CPG, or food or beverages before they founded their successful companies,” observed Long.

Branding is also being redefined; brands today are less associated with product attributes and more with emotional needs, Long averred. Many consumers attach their loyalty to companies that align with their own values. “We used to define ‘transparency’ by healthy ingredient lists, clean labels, transparent packaging and such,” she said. But now, consumers want more emotional connections to their food, starting with knowing where it was grown and how it was raised. “How many people would have anticipated that an outdoor apparel manufacturer such as Patagonia would ever enter the food and beverage industry based on shared customer values?”

Fast-changing technology combined with rising consumer expectations have pushed the envelope of consumer expectations to new heights and shattered barriers to entry to the food and beverage sector. But consumer expectations are fickle and can quickly change direction. “While the market used to be defined by ‘big fish, small fish,’ it is now defined by ‘fast fish, slow fish,’” she concluded. Be it in a big pond or small, failure to change can prove fatal.

“Impact of Disruption on the Future of Food,” Andria Long, Growth Advisor, www.andrialong.com

This presentation was given at the 2019 Protein Trends & Technologies Seminar. To download free presentations and the Post-conference summary of this event, go to https://www.globalfoodforums.com/store/protein-seminars/

See past and future Protein Trends & Technologies Seminars at https://www.globalfoodforums.com/store/protein-seminars/

Posted on:December 4, 2019

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