Progressive Grocer

DEC 2015

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December 2015 | | 13 For example, the way consumers defne food safety is changing, from "If I eat this, will I get sick?" to "Are these products free of harmful ele- ments? Is there clear information and labeling? If I feed this to my child, what are the long-term impacts on his/her future health?" Aligning Values and Strategies Our fndings suggest that companies must change to thrive in this environment of shifting consumer food values. Tey must understand the intersection of these new consumer food values and their own growth strategies. Tey need to reinvigorate their product portfolios with a "product plus" mind- set. Tey must engage consumers in a genuine, open dialogue to build trust. Finally, retailers and manufacturers must evolve their business models to support these new and revised priorities. We know the consumer value equation is changing, and while we've been witnessing the shifts in shopper behavior, we're just beginning to measure the impact on our businesses. Shop- pers' changing relationship with food (and related products) is well refected at grocery checkouts, as evidenced by the top 25 CPG companies reporting 1 percent growth over four years, and conversely, small and private brands' 4 percent growth, ac- cording to Credit Suisse research. When I facilitated a conversation inspired by this research (sponsored by Food Marketing Insti- tute and Grocery Manufacturers Association, and conducted by Deloitte Consulting) at the GMA Leadership Conference this past summer, I had the opportunity to engage a diverse panel of food industry leaders on their viewpoints regarding how consumers are redefning the path to purchase. Te panel noted that the biggest surprise from the research was the immediacy of all of these infu- encers on all areas of their respective businesses — from research and development to marketing to IT. Land O'Lakes EVP and Chief Supply Chain and Operations Ofcer Beth Ford explained how these shifting behaviors are redefning her company's relationship with the consumer. She emphasized a need for a cultural commitment to change at the corporate level — from analytics to R&D to all ways of listening to the customer. Carolyn Sakstrup, VP of Target's Guest Center of Excellence, explained that companies should recognize nuances in the changing consumer, not- ing in her comments that it's not just "healthy" cat- egories that matter to them, but also products with recognizable, simple ingredients and a clear label. Sakstrup attributed these merchandising trends to the fact that 97 percent of Target customers are already buying at least some natural, organic or sustainable products at its stores. Supply chain partners are increasingly posi- tioning themselves as resources and having a lens on the consumer food conversation. Rob Auker- man, Elanco Animal Health's president of North American commercial operations, stressed that his company has broadened its stakeholder dialogue with CPGs in the last fve years, including an investment in a state-of-the-art social media com- mand center and global research tracking percep- tions on antibiotics in food. The New Normal Food is both personal and emotional, and panel participants acknowledged that delivering on the demand for transparency is a constant challenge. DuPont EVP Jim Borel recognized the need for more ways to be open and responsive, and ulti- mately build trust in their products. Borel shared that earning trust is as simple as telling the amaz- ing stories behind products in ways that resonate with shoppers. Te entire value chain will need to work together to think about new products, new processes and new messaging to meet consumers' evolving needs. A resounding theme of the panel, and the big- gest takeaway from the overall research initiative, was that companies need to evolve alongside the customer and work across the supply chain to meet this "new normal." At FMI, we continue to invest in new resources to help our members keep pace with the shopper during this evolution — arguably, revolu- tion — of the food retail industry. PG Companies must change to thrive in this environment of shifting consumer food values. They must understand the intersection of these new consumer food values and their own growth strategies. Mark Baum is SVP of industry relations and chief collaboration officer for Food Marketing Institute.

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