Ever feel that you're spending too much on groceries? Well you might be right. According to David Hughes, Emeritus Professor of Food Marketing at Imperial College in London, Kiwis are the fifth biggest spenders on groceries per household.
Professor Hughes spoke at a recent event hosted by the Marketing Professionals Bay of Plenty group (recently rebranded as MOPED) Over a delicious (and healthy) luncheon, he discussed with us consumer trends in the global food industry and tips to successful marketing of food and beverages in developed and emerging markets.
The first trend David highlighted is one that effects the food economy first-hand. The countries that spend the most on groceries per household are Switzerland, Norway, and Japan – just before Australia and then New Zealand. This is not surprising to most in the room, especially in the middle of a banana shortage and resulting price hike. He hypothesised that this is due to taxes and inefficiencies due to the distance of our supply chain. Data shows that we don’t eat out as much as people in some countries, such as the US, which has one of the lowest spend on groceries. This could also be due to the fact that high grocery prices lead to higher menu prices. But could it also be that we simply eat better, more quality ingredients (or more of them)?
Diving into the global marketing, a major trend he highlighted is that, like most trends, consumers are moving towards two polar opposites: Fuelies vs Foodies.
Fuelies are the types that will go after bargains, a quick fuel up, low cost foods, and also newer, tech savvy products and brands. Foodies run at the opposite end, seeking high quality, whole foods and traditional methods. While the fuelie shops at dairies and convenience stores, often only buying for the individual on-the-go, foodies will take the long route around the artisan store with their family, buying organic and the ‘naughty but nicer’ foods at premium prices. They enjoy the experience, and will stop to sample and enjoy the process.
Stuck in the middle, and unfortunately the declining trend, there’s Walmart and Pak’n’Save, stores that offer too much but not enough. They’re not fast enough for the fuelie to pop in and out and find what they want quickly. And yet they don’t carry the high quality, artisan, and local goods or offer the lingering experience that foodies are seeking.
I think the ultimate combination would be for the dairy to start carrying small scale, artisan quality goods at a lower price, perhaps by selling smaller servings to entice the fuelies – a combination that would appeal to both ends of the trend scale.
Another major trend that both fuelies and foodies are subscribing to is one towards healthier foods. Not just whole foods and traditionally made goods, but the ‘guilt free’, all natural tagline. Foods with lower fat and salt drive profits, and ingredient lists are getting the cut –some products, with ingredient lists that read like a short novel, even if mostly natural, are not making the cut into foodie driven stores. (Counter to this trend are some of those sneaky treats, like potato chips, both high fat and high salt, that are top sellers – simply because we like them!)
That said, not every product that fits a trend will succeed in market. Of all new products to market, 90% will fail in the first two years. In some cases there are just too many other products pushing a similar offering, highlighting a defined first-to-market advantage, often owned or purchased by the bigger brands.
Secrets to success include try before you buy scenarios, including samples given in store and coupons, which can boost sales by 3 to 1 over other products. Multichannel launch also boosts success, taking a campaign beyond the shelves to online, TV and radio channels.
The real money, however, is in food ingredient companies. Those spending on R&D to find and develop special ingredients are likely to profit most. And this is where New Zealand is failing, with high efficiency production but low value products, for example milk. Other countries have the opposite problem, such as Denmark, a lead exporter of butter, a high value product that isn’t being produced efficiently.
Keep an eye out for whey, an interesting ingredient that was once a discarded by-product now being utilised for its protein content for weight management and muscle growth. Watch this space for interesting things to come in the New Zealand market.
Speaking of weighty topics, David also discussed the obesity epidemic, which is a worldwide problem. A whopping 65% of adults in the UK are obese, with Australia, NZ, US, and Mexico not far behind. His answer to this is not to tax sugar or fat, or pressure governments to impose regulations on food manufacturing. Instead, our behaviours need to change. Perhaps this can be fuelled by the foodie trend, seeking healthier foods made more cleanly, simplifying our tastes to suit simpler ingredient lists that require less fat or salt to get flavour. People also need to be encouraged to be more active, something the latest advances in technology in smart phones, tablets, and 3D TV does not promote. It’s funny how couch sitting can also lead to unhealthy food choices (if I’m being lazy I’ll go for convenience food before I cook my own) but when I get out and get active I’d rather eat a nice juicy pear and have more energy to cook dinner.
What are some food trends you’ve noticed, both worldwide, and within your own household?
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