Prospects for Grocery Retail and Who’s Eating Their Lunch?!

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One way or another, each of us ingests food every day. The intriguing question is, in the future will we be buying it from the same retail providers as in the past? Drop back a decade and the answer revolved around the perceived relentless march of the mega-supermarkets – Walmart, Tesco, Carrefour et al. Now, massively present although they are, “Big Box” retailing is looking a tad jaded, with the Germanic terrible twins, Aldi and Lidl, causing consternation and the manifestation of all that is online, Amazon, hovering menacingly! So, what’s the story?

Let’s look at some facts and forecasts. In the UK, supermarkets and hypermarkets have a combined grocery market share of 55%. By 2023, their share is forecasted to slip to 52%. Let’s race ahead to 2030 – share will have dipped to the mid-40% but reports of their death will have been greatly exaggerated. Discounter share in the UK, now at 12% and expected to reach 14%+ by 2023 will nibble towards 20% by 2030. Across Europe, those pesky discounters have shown consistent ability to prosper in a hostile environment – like moths in the wardrobe, they’re very difficult to expunge!

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Retail pundits are increasingly disappointed and sceptical about the future rate of growth for online grocery. In 2018, 6% of UK groceries were purchased online and this is projected to increase to a modest 8% by 2023. The disappointment is that this growth trajectory does not emulate that of hardware, electricals or fashion. We believe that in the UK online grocery share may be 15% by 2030 but what sort of groceries will be routinely sold online?

Look, there’s a big difference in the level and frequency of emotional involvement in our purchases of, say, kitchen paper towels versus meat. For paper towels, we buy our regular brand or whatever other brand is in our “paper towel repertoire”, often being influenced by whatever is on special. Few shoppers sniff the pack and search assiduously for the “best before” date! However, fresh foods are predominately supermarket labelled and we feel the need to check dates/appearance/ripeness/maybe smell because, after all, this core purchase will be eaten by me and my family.  Like meat, the fruit and vegetable purchase is equally complex: green or ripened bananas?; is the avocado for guacamole tonight or do I want it to be perfectly ripe for a salad in 3 days?

Satisfying online shoppers on fresh foods is a weighty responsibility. Trust in the provider and brand owner, whether it be a supermarket or a pure online player like Ocado is paramount. So, do you think the majority of shoppers will be comfortable with their local supermarket selecting their families’ fresh foods, let alone a distanced, monolithic entity such as Amazon?! Building online share for fresh foods will be very hard work whereas doing the same for the other boring but essential stuff will be, relatively speaking, a doddle! That’s why UK online share of grocery purchases will be “only” 15% by 2030 and the disproportionate share of those online grocery purchases will be for shelf stable items that are, currently, located in the middle aisles or “the morgue” as this area is unkindly named. Surely, at least half our grocery purchases, the ones that are essential but low involvement from a shopper perspective, will be auto-replenished via signals from smart fridges and pantries in most homes within a decade?

Shoppers’ relationships with groceries have always been a bit more personal than other goods. Back in 1998, grocery sales were just 14% of total for Walmart and it took close to 20 years for “The Mother of All Grocery Retailers” to ratchet this percentage over the 50% mark (57% of Walmart’s $500 billion sales were grocery items in 2018). For Amazon, 2017 sales of $180 bn. had a tiny fresh food component – that’s one of the reasons Bezos bought Whole Foods. We’re convinced that he’s kicking himself regularly for not putting in an early bid for Sainsbury’s before they went and queered his pitch by snagging Argos and, then, Asda. Online platforms with no track record in perishable fresh foods need to earn shopper trust and an accelerated way to do this is to purchase a bricks and mortar retailer with a fresh food pedigree. The strong performance of Morrisons’ share price over the past few months is indicative that market pundits think Amazon may dip into its petty cash and fork out $8 bn. (a mere1% of its current market cap.) to buy a friendly Yorkshire grocer before the year’s out!

Pundits have a short attention span and are impatient by nature. Amazon takes a longer-term view. David signed up as a customer with Amazon in 1998 – 20 years ago, when Bezos was just moving out of his garage using it as an office and depot and his “books by mail” business was taking off. In 2018, Amazon has a 40% share of ALL online sales in the USA. Are its sales peaking? Hardly! 85% of retail in America is still bricks and mortar-based. But Bezos believes that Amazon must expand and grocery sales are an integral part of this expansion. Look to China for endorsement – both Jack Ma (Alibaba) and Pony Ma (Tencent) are expanding their internet-based businesses by buying into traditional supermarket chains.

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China’s level of digitalisation is enough to make Western online companies dribble with excitement. Payment by touch phone dominates and cash is passé. B2C e-commerce penetration in China far exceeds that in any other market in the world. Are the Chinese more tech-savvy? No – they’re leap-frogging traditional stores because of poor store networks and shocking product availability. For a US food producer, partnering with the top 4 grocers gives you access to half of the US food market. In China, by contrast, the top 4 grocers connect you with 5.7% of food retail spending (The Economist Intelligence Unit). This is a headache for food producers and consumers alike – supply chains are long, circuitous and, often, dodgy. So many Chinese consumers shop online because the products they want are not available offline and, as a bonus, they don’t have to sit in a horrendous traffic jam going to and from the store!

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Getting back to our food purchasing behaviour – let’s not forget that whilst food is fuel, it’s also for some occasions (which are being squeezed) hugely social, fun, family, tradition, entertainment, reward and much more. Online is great for basics but can be at odds with consumer values when we are in feasting rather than refuelling mode. Yes, we can make “Mindful Choices” shopping online but it’s more rewarding when we have an opportunity to interact with the physical food and those that sell it. Capturing online share of fresh foods and story foods will be a marathon not a sprint. But focussing on the battle solely for grocery market share is profoundly blinkered. The overall market for food must be viewed in the round. What about food consumed out-of-home or when we “eat out in” using the likes of deliveroo, uber eats, etc.?

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The food-to-go market is huge and growing substantially faster (x2) than traditional grocery. Whereas supermarkets are expanding their food-to-go offer, they are not the movers and shakers. 60% of this market is taken by specialists and by QSR, but over the next 5 years the specialists will advance at pace and QSR overall will struggle, as some fail to keep pace with the digital/technological initiatives of the global fast food employers (particularly McDonald’s who have done remarkably well in the UK during a torridly competitive period for food service). For best in class, look to Pret (snapped up recently by  Germany’s JAB), Itsu and, as ever, M&S’s food-to-go offer can be fabulous. Younger consumers are the driving force in food-to-go and when they want it, they want it NOW, not in a minute but NOW! Desperate to claw their share of this market, supermarkets are and will continue to revert to type and rely on astonishingly low-priced meal deals. It’s in their DNA to foment a “race to the bottom” on price.

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 As traditional eating patterns (breakfast-lunch-evening meal) break down and are replaced by a series of mini-meals and/or snacks which can be bought and eaten out, or delivered in to office or home, demand for old-fashioned food ingredients wanes. Breakfast is purchased on the way to work, lunch is at or close to place of work, dinner is carried home or “ubered-in”. The result is that the pre-eminence of the supermarket as a destination to purchase food is lessened substantially. In short, the meal/snack market moves from being highly competitive to, let’s call it, ubercompetitive!

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Is this good news? Well, YES from a consumer perspective with a myriad of food businesses vying for our attention and opportunities galore for those that are quick on their feet, technologically adept and are well tuned-in to fast-changing consumer whims and fancies. But, it’s more challenging for monolithic 20 Century grocery retailers who may lose sales massively from the core of their stores to pure play online merchants and struggle to keep up in the fast-changing world of food on the move! Surely, it’s good news for food suppliers as new routes to the consumer emerge and become established and, in doing so, take share of stomach from the traditional supermarkets. So, do we expect to see tumbleweed blowing through dust-covered  aisles of abandoned Tesco and Sainsburys/Asda supermarkets? No – they have huge areas of strength including a thorough understanding of sourcing fresh foods, the capacity and resources to change, and the capability to be world class omni-channel retailers.

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Posted in Fresh Products, Hypermarkets, Online, Uncategorized

The Green Train is No Band Wagon. It’s a Bona Fide TGV Consumer Express!

Here’s a challenge: explain consumers’ understanding of sustainable food in a 140 character tweet – oh, go on then, try the new 280 character option! Succinct descriptions of complex topics are very fashionable with politicians and business leaders alike and we, the hoi polloi, have to work out what is genuine and what is fake news on food.

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Back in the early-noughties, David spoke on themes such as “The Green Train Has Left the Station: Get On Board!”. Continuing the green theme, in one of our early supermarketsinyourpocket posts, 3 years ago, we concluded:

“Bottom Line: consumers are and will increasingly ask more of those who produce and retail their food, whether it be local, animal welfare-friendly, environmentally sustainable, chemical-free, or whatever, the “green bar” is rising inexorably. Consumer citizens will have their way and they won’t pay a premium for ethical food – they’ll simply discount those that fail to meet their ever-rising expectations about the food they feed their families.”

Frankly, today, we wouldn’t change a word of the above. Back in 2006/7, 1% of new products launched around the world had some environmental/ethical claims but this had climbed to 22% by 2016/17 (Mintel). “Natural” claims (e.g. no additives, preservative-free, organic, GMO-free) rose from 17% to 29% over the same period. The USA has led the charge: Euromonitor estimate the American market for ethical food products to be around $270 billion in 2018, with environmental issues foremost and animal welfare much less so than in Europe. Mind you, pervasive use of “green” terms can dilute their impact, particularly, if loose usage has no foundation. That’s why, transparency and traceability in the supply chain is a “must have” and not a “nice to have”. The flurry of interest in blockchain technology (a digital business version of “I’ll show you mine if you show me yours”) is testament to this. Clearly, American consumers’ interest in “what’s in my food [the ingredients], how was it produced and who produced it?” extends much further than well-heeled Whole Foods Market customers.

The impact of the rising “green bar” is well illustrated through Danone’s American journey over the past couple of years: buying WhiteWave Foods for $12.5 bn. in 2017, which is a major producer of “green” food products (e.g. organic, plant-based, “non-dairy dairy” brands such as Alpro and Silk) to assist it in exiting the slough of despond afflicting “Big Food” companies in North America. Danone North America has been accredited B Corp status (April 12th, 2018) whereby it is third party certified for achieving rigorous standards of social and environmental performance, accountability, and transparency: walking the talk of its mission “to bring health through food to as many people as possible”. Emmanuel Faber, Danone’s CEO believes that “increasing distrust of the global food system and the consumer-driven revolution in food are the two sides of the same coin. (Consumers) want to understand who are the people behind the brands and how the ingredients have been grown and what the impact is going to be on their health and the planet and everything. Then, of course, they choose” and they may or may not take these factors into consideration when making the actual purchase – that’s their prerogative to be glowingly rational, quixotic or palpably irrational!

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Increasingly, there’s no hiding place for food companies and their ingredient suppliers. Ten years ago, fast food customers wouldn’t have thought to mull on where the soybeans came from that were fed to the chickens that were processed and, then, dusted with the Colonel’s secret recipe of 11 herbs and spices. Now, they’re concerned that this journey may have involved the destruction of the Amazon rain forest (come to think of it, it’s increasingly difficult to have ANY secret recipe because were those secret spices processed in a factory in India manned by children?). It’s moot whether serried ranks of consumers are spending their time mulling such issues, but WWF are watching every step of your suppliers and will spill the soybeans if there are transgressions.

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Note to readers: DON’T cross The Panda or she’ll knock your block off!

So, where’s the “Green Train” now – decelerating gently as it approaches the terminus? Well, NO it’s picking up speed driven by the winds of social media, activist organisations, governments, and concerned consumers and it’s international, not just a British foible, with huge implications for the global food industry. The consumer issues agenda lengthens:

  • food waste is a big issue: with Tesco pledging to halve food waste in conjunction with its suppliers by 2030; the launch in the UK of the Karma food waste app; ugly/wonky fresh produce becomes fashionable. Spare Fruit differentiates itself in the market by using fruit not meeting supermarket specifications;
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  • food packaging is set for a drubbing (see last month’s blog). Waitrose is removing all disposable coffee cups from its stores this year. Major players are pledging to have full recyclability for their packs by 2025 – they won’t be allowed that much time by consumers and will have to adopt a “Hurry Up Offence” (as NFL teams say when they are attempting to clutch victory from the jaws of defeat!) to get there sooner!;
  • governments are losing patience with consumers and the food industry as the NHS buckles under the weight of diet-related disease costs. Initially exhorting consumers to eat more healthier, then, pressure was applied to the food industry to cut sugar, salt and fat levels and, now, it’s the heavy stick of taxation.

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Public Health England has launched several campaigns to influence shoppers’ decisions and make them aware of the sugar and calories they are consuming

Health is the driving force behind the greening of the global food industry but it’s much more than the consumer’s health. The Number 1 global consumer mega-trend is the growing concern about the health of the family and the health of the planet. Increasingly, when shopping consumers will take previously considered esoteric environmental and social concerns into account and, albeit modified by inter alia their financial situation and the eating occasion (e.g. special meal, refuelling “grab & go”), they will make “meaningful choices”. Do they have a better defined notion of sustainability than in the past? No, but inexorably, they are recognising that they can influence the direction and outcomes in the food industry through their purchasing behaviour. Now, sometimes this can be scary if they get hold of the wrong end of the stick or are unduly influenced by crackpots or wicked corporations manipulating research data to further their venal ends. But, in the end, we’d back the common sense of the masses to exhibit “parish pump wisdom”. In bygone times, the women of the village would gather around the water pump to wash clothes and discuss the matters of the day. Invariably, after discarding the dross, a consensus would emerge on what was the right thing to do and who was the hero and who was the villain! Used perspicaciously, social media vehicles, including shamed facebook, has become the global parish pump!

Shoppers are getting more and more involved in the food they are buying. They want a meal and snack solution without a mess – in the home, on the farm, on our planet. In fact, their preference is to have meal solutions coincide with solutions for our planet and those that live in it. Monitor consumer concerns and adapt your products and services accordingly. Don’t become the sugar-laden breakfast cereal or fizzy drink of your sector. Consumer scrutiny of the food and drink industry will only increase. What issues are edging on to the radar screen? That’s for another blog, but be open, talk to your customers and to special interest organisations that are active in your sector and they’ll give you advance notice on future issues. Be open and they’ll respect this. When consumers are eating your products, they are sharing their views with friends and almost anyone else who is stuck on a train or motorway – make it a trialogue!

Take a good look at what the best of “Big Food” is doing to become more transparent and engaging with their customers. We gave the example of Danone with its B Corporation accreditation. Triple Bottom Line preceded it and Net positive Futures shares a similar space. Business is changing fast – the consumer is driving the Green Train and it’s no Band Wagon. It’s  a bona fide TGV Consumer Express!

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Posted in Credentials, Sustainability

The Domino Theory: Implications for Plastic Packaging

Who would you choose to captain your fantasy A Team on environmental issues? In agriculture and food, Rachel Carson of “Silent Spring” comes to mind. She’s been the mother of the modern environmental movement with her early stance on abusive usage of pesticides. St. David Attenborough would make a decent Vice-skip, particularly with his revelations on destruction of our planet’s oceans which are the home of the world’s favourite meat protein – fish and seafood. Concerns about the impact of plastic waste on our environment are not new but, certainly, he has raised them to their current high levels via the BBC documentary Blue Planet II.

Evening Standard February 25th, 2018Evening Std Milkmen.jpgA recent UK Kantar Worldpanel survey identified that:

  • 25% expressed “extreme concern” about plastic packaging in grocery;
  • 42% thought it should be a priority to make all packaging recyclable;
  • 21% want entirely plastic-free packaging;
  • and 59% said they were trying to minimise plastic waste at home.

A large sample, these results reflect substantially more than the views of eco-terrorists, Guardian readers and Waitrose shoppers!

Grocery industry folk we meet with outside our borders often comment on the profligacy of packaging in the UK, identifying “overly-packaged” fresh foods and ready meals as being particular culprits. There’s some truth in this although it does reflect that we are an acutely convenience-driven shopping society – grab & go people with no time (or competence?!) to select the pick of the crop and, anyway, shouldn’t that be the job of the vendor? This suggests that we don’t like plastic packs but we might find it difficult to give them up.

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  • astute Malcom Walker, CEO of Iceland, was first out of the blocks promising to eliminate plastic packaging from all Iceland’s own brands by 2023;
  • Waitrose has announced it will eliminate black plastic on own brand products by the end of 2019;
  • Tesco has its “3 key pillars of the Little Helps Plan” committing to make all packaging recyclable or compostable by 2025;
  • Nestlé and Unilever, amongst others, have endorsed a total ban on oxo-degradable plastics (those that many consumers believe are biodegradable but, in fact, leave micro-plastic waste as a hazard for fish in the oceans);
  • Coca-Cola has a “World Without Waste” goal to have 100% of its packaging recyclable by 2030;
  • and pesky millennial start-up companies incorporate total recyclability into the package of values that are integral to their products. Ella’s Kitchen (now, part of “Big Food” Hain Celestial) has pledged to make its baby food pouches recyclable by 2024 but, in the meantime, has an “Ellacycle” scheme in which consumers can drop off their empty Ella packs to be made into useful consumer items! Fair Play, Nestlé have picked up from customers’ front doors used Nespresso pods as part of its coffee system offer for years.

 

So, the grocery industry seems to be saying “We recognise there is a plastic packaging problem and we shall fix it .. umh .. in 5 or 10 or 15 years time”. Problem recognition is a good start, albeit after years of, if not denial, at least ignoring. Do you remember the contretemps associated with CFCs –used in refrigerant cooling and aerosols. In the very-early 1970s, their impact on the ozone layer was shouted out by “eco-terrorists, ne’er-do-wells, flower power people and communists”. But, it wasn’t until the 1987 Montreal Protocol that the world started to take action to address the widening hole in the ozone layer. David can remember in the 1970s blithely using spray can deodorant without a smidgeon of guilt that he was upping the skin cancer risks for his mates in Australia!

So, relax, we’ve got 15 years to fix the plastic packaging problem. Well, it took Rachel Carson and her “Silent Spring” and the anti-CFC protagonists the better part of 15 years to get a hearing but, then, we didn’t have pervasive social media. If you sell a dodgy chicken in Ulaanbaatar and get rumbled this morning, it’ll be on facebook and Bloomberg News before lunch. Time has become compressed. Those that run our industry – consumers – won’t allow us the luxury of 15 years to fix the problem and particularly those impatient centennials and millennials. There’s billions of them around the world and they are astonishingly inter-connected and, increasingly, concerned about social and environmental issues. Damn them. They’re all like Veruca Salt, the spoilt brat in Roald Dahl’s “Charlie and the Chocolate Factory” who wants the Golden Ticket and she wants it NOW!

The issues associated with plastic packaging are analogous to those related to animal welfare, food safety, and food chain integrity, in general. Responses to consumer concerns are accelerated by the actions of major food industry players. Why the Big Boys? First, increasingly, they are aware that if their corporate interests are not consonant with the values embraced by their customers, then, they won’t remain Big Boys and they’ll certainly be perceived as Badder. Secondly, nimble start-up and smaller players will grasp social and environmental initiatives to give them a competitive edge and exacerbate the doldrums which many major companies find themselves in.

McDonald’s is a case in point. In many social areas, it’s been ahead of the curve (e.g. MSC certification on its fish). On a platform of “Food with Integrity”, USA-based Chipotle claimed “antibiotic-free chicken” and, essentially, forced or at least accelerated discussions that McDonald’s had with its chicken suppliers worldwide to follow a similar path (mind you, Chipotle went on to foul up on food safety and queer its pitch on food integrity!). McDonald’s move towards cage-free hens for its egg supplies in many countries reflected pressure from animal welfare groups and prompted a very quick response. Do click on the link below to see the YouTube clip placed by Animals Australia (2014) which is a quite brilliant example of lobbying – fair and balanced? No. Effective? Yes.

Once a Big Beast like McDonald’s or a Tesco takes a radical social, environmental, and/or animal welfare initiative (or, indeed, one on price), major competitors are forced to follow – the dominoes start to fall. What’s more, these domino tiles aren’t tiny, they’re the size of massive Stonehenge pillars and the consequential knock-on effect has massive implications for the food industry.

What’s our point? We see a classic example of the Domino Theory in Practice for the accelerated removal of plastic packaging. Concerned consumers won’t accept dates for 100% recyclability that stretch into the mid-2020s. Back to Veruca Salt, they want it NOW and, increasingly, their purchase decisions will reflect this. We’ll be seeing much less of the pervasive, anger-inducing label on pack of “not currently recyclable”. Should this be an opportunity for governments to regulate? We’ve moved on: in the food industry, it’s not governments that regulate us, it’s our customers, the major supermarket and food service chains, and they are the proxy for those with the real market power – shoppers, consumers and their families!

Plastics will take time to disappear but if they are not recyclable and/or compostable soon, the products inside these packages will not be purchased. Will consumers pay more for green packaging? NO – they’ll simply expect it and will be outraged if it is not. Ralph Early (Harper Adams University) has an insightful article in February’s issue of Food management Today: He concludes “(food businesses) derive income from the products they sell to consumers and in doing so they assume a range of moral (and ethical) responsibilities on behalf of consumers”. We concur. We’ll attain 100% recyclability much quicker than the food industry is planning to do so now. When we get there, we’ll be asking ourselves “Why didn’t we do this before?”.

 

Posted in Consumer, Credentials, Sustainability

Trust Me, I’m a Farmer!

Back in 1933, soap detergent company Procter & Gamble sponsored “Oxydol’s Own Ma Perkins” daytime radio show and soap operas were born! Post-War, the “goggle-box” arrived and we’ve been huddled together watching the ubiquitous soaps for decades. Food companies got into the game: Domino’s Pizza and BirdsEye sponsored The Simpsons. But, the notion of the “nation’s favourite” laundry detergent or food brand has dissipated – weakened by encroaching supermarket private label, promiscuous shoppers chasing price deals and, more recently, the gnawing perception by not least millennial consumers that Big Corporates are Bad and Smaller are Sweeter!

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The 1930’s Advertisements for Oxydol were Soap Operas in Themselves!

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In fact, there’s been a collapse in trust of erstwhile élite institutions such as government, the church, non-government organisations, the media (true or false news?!), particularly social media (trusted by less than 25% of Brits), and business, not least global companies. Grumpiness about the latter varies substantially by country: the French are the most dyspeptic (hasn’t it been ever thus “La Bonne France, L’Autres  sont Terrible”!), Brits are sceptical by nature, Americans generally positive and the Chinese, ironically given their Communist status, laissez-faire and happy to embrace international brands! Mind you, it’s not surprising that the Chinese are generally happy with their lot – there’s more than a few citizens of democratic countries that would trade their voting franchise for a long sustained period of income growth and “things getting better for my family”.

On trust, “Big Food & Drink” has fared badly this decade, as we’ve reported in previous blogs. As issues relating to consumer health, the environment, worker welfare, etc., have become more widely discussed, big corporates have been perceived more of being part of the problem rather than the solution. Let’s be clear, it’s a nonsense to think that the answer is to revert to small-scale, but Big F&D has been ponderous and, often seemingly reluctant, to align their values and performance to meet their customers’ requirements. Let’s give 2 cheers to Kellogg’s in the UK who announced in November last year that it was cutting sugar content in kids’ breakfast cereals by 40%. Child obesity didn’t pop up as a problem in 2017, Mr. Kellogg! And, then, there’s Coca Cola promising that by 2030 all its packaging will be recyclable – much too little and much too late would be our view, lest the oceans be a squidgy mess of plastic waste by then! Or the gob-smacking promotion this month from IHOP (International House of Pancakes) in the USA – the country firmly in gold medal position in the OECD Obesity League Table.

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We think that 2018 will see an acceleration in the transformation of the global food and drink industry. Sieving through the plethora of “Food Trends for 2018” that arrive with the New Year, we like Innova Market insight’s top trend “Mindful Choices” which identifies increasing consumer concerns about the health of the family and the health of the planet as current  Millennials enter the family “nesting” stage of their lives. In 2007, 1% of global new product launches identified environmental and ethical attributes – in 2017, the figure was 22% (Mintel Global NPD Base). Is this just corporate greenwash? No, Big Food is on to this, or at least some of them are. Unilever and Nestlé are clear leaders but here’s a quote from Danone’s CEO: “our business is inherently reliant on agriculture, so we will help transform the food system, and work with our partners to build regenerative models of agriculture based on healthy and resilient soils”. When did you last hear a word from a food and drink company that acknowledged that its business had anything to do with soil!

On environmental matters, and particularly the global food industry’s impact, we’ve passed the tipping point. Sometimes it just takes a little nudge – a 5 pence charge on a supermarket plastic bag and usage is slashed (UK). It’s got little to do with the financial penalty and much more to do with the increasing awareness of the impact of plastic waste on our environment (and the guilt of being an indiscriminate plastic bag user). The BBC’s riveting Blue Planet II has taken this concern to a higher level – note the headlines “Plastic killing our precious sea creatures” (for goodness sake, sanctify Richard Attenborough!).

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The most recent and pivotal manifestation revolves around non-recyclable coffee cups and whether there should be a 25 pence (35c) charge. The charge won’t materialise because it won’t have to – increasingly, consumers will make it unequivocally clear that if the cup isn’t recyclable, then, they won’t buy it. That’s why we feel that frequent criticism of over-packaging of food in the UK is currently valid but shortly to be passé. This is a great area to show a first mover initiative – note Iceland supermarket very recent promise to remove all plastic packaging within 5 years. Be assured, in a very few years, if packaging isn’t at least recyclable but preferably compostable, then, the product won’t be purchased. There’ll be no premium paid for recyclable/compostable packaging, but there will certainly be a discount on products which are not!

We mustn’t ramble on, so, back to building trust in the global food and drink industry. Reflecting back on the past 60+ years, “those in charge of our food” has changed from big food and drink manufacturers usurped by monolithic retailers (hey, it was only a decade ago we all thought Tesco would bestride the retail world and Amazon was a Ponzi scheme and Alibaba a fairy tale character). Now, the internet has brought huge social challenges but, in the world of food and drink, it has moved power firmly towards the consumer-citizen. A bit late in the day maybe for some in the industry – if we had worked out back in the early-1990s that doing clever stuff with plant genetics required the sign off from consumers before we got too far down the pike would have saved us a lot of grief on GM food. However, then, we weren’t smart enough to grasp that working on the basics of life required us to gain a licence to operate from those that paid our salaries and took the risks of our actions i.e. consumers.

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Jeff Bezos, in the process of building the challenger of Walmart and Tesco.

It’s a fact, Consumers Rule OK! They demand transparency and traceability along the supply chain. Increasingly, they’re interested in how the products they put in their families’ mouths are produced, and where and by whom – why wouldn’t they be? Particularly because they are of the mind that the food and drink industry has been sparing in information presented heretofore and, occasionally, economical with the truth on its costs and benefits.

This upcoming decade may well be a watershed for food producers – and we mean the farmers and fisher folk who produce, to use an old-fashioned term, the ingredients which comprise our daily fare. Actually, from a consumer trust perspective, in general, farmers are well placed (maybe to their surprise). Research from Canada, for example, shows that farmers are more trusted than other food chain participants – such as retailers, manufacturers and government regulators; although, trust levels have slipped right across the food chain in most recent years. Canadians see their farmers as being competent but needing to work on providing greater transparency in their farming operations. A similar picture is evident in the USA: government, farmers and food manufacturers are all held responsible to ensure safe food for the nation, but farmers (along with our own family members and the local doctor!) engender much more trust than the others. Big Food and big business in general lack trust, whereas smaller-scale operators are perceived more benignly. If there is a pervasive view that “Small is Beautiful”, then, this is both naïve and problematic – small can be cute and cosy but, of course, it can be under-resourced, ill-trained, under-regulated and downright sloppy!

There is a big issue for farmers, too, on consumer perceptions of scale in agriculture. Big farming/factory farming is demonised whereas smallholder farming is fêted. The rhetoric surrounding messianic support for the small-scale producer reminds us of Primrose the pig in George Orwell’s Animal Farm mindlessly chanting “Four legs good, two legs bad”. Most UK consumers, for example, would have no idea of what number of cows would constitute a large or small dairy herd. In fact, what is portrayed as gargantuan and the worst sort of industrialised farming by activists would be seen as barely economic in, say, South Island, New Zealand!

Clearly, one can’t usefully lump farmers (or any businesses) into arbitrary categories based on land plot size, sales, etc. The world over, there are good businesses and bad businesses and, fingers crossed, let’s hope there is sufficiently robust regulatory frameworks in place to weed out those that are noxious! For a producer of a “finished” food product sold to a consumer, however, what is much more important than in the past is the story associated with the manufacture and procurement of the ingredients that comprise the final product – the primary producer is an integral part of the food team. This wasn’t the case in the history – ingredients appeared automatically, almost by magic! The farmer is now maybe the most important part of the food integrity team. Those farmers that can deliver this on a sustained basis will earn a premium for doing so, after all, they are carrying the brand integrity torch on behalf of food brand owners.

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In the future, expect to see primary food producers much more upfront than in the past. It’s already happening – note the coverage that small-scale coffee and cocoa farmers receive in advertisements from the likes of Nestlé, Cargill, Kraft Heinz. McDonald’s puts egg and potato farmers in its advertisements. Danone is talking muck and farming! The worm is turning! Farmers are becoming increasingly fashionable and deserve a premium for their fashionista status. This doesn’t mean that every farmer should become a media star. There’s a lot of farmers who would put the fear of God up a consumer. But farmers do need to be more on the front foot. We like the farmer-led campaign to promote milk products and dairy practices in the UK –  #Febudairy. Let’s see some “agri-proactivity” as it shouldn’t just be the bailiwick of vegan special interest groups to trample unfettered across the twittersphere when communicating with impressionable consumers. Finally, in Agriculture’s “A Team”, make sure there are real farmers who are personable, attractive to the eye, with media training to carry the banner for the agricultural industry!

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Aldi sponsors Olympic Team GB and picks the most athletic farmers to supply them with milk!

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Posted in Credentials

Some Reflections on Global Food System Trends

End of the year food blogs, often, focus on trends embraced by the chattering classes, such as Gothic desserts, even more obscure ancient grains, and posit opinions on whether demand for kombucha tea has peaked. However, we thought we’d take the “ground-breaking” FAO 2017 study of global food system trends and pull out some stuff that might be of interest to you whether you are farming, retailing or doing anything in between.

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  1. World Population Growth is Slowing

We’re going to add 2 billion more people to our world over the next 30 years and most of us will be living in cities – that’s handy because it makes them easier to bag with our products and services.  By 2050, India will be the most populated country and China will have got old before it gets rich, with too many grumpy batchelors. Notwithstanding the UK’s wingeing about new entrants, Germany’s population growth rate is double our own. Urbanisation brings sharp falls in fertility rates across the globe – who’s going to do the grunt work? A combination of robots and immigrants?

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  1. Dietary Patterns are Changing

Global meat demand is buoyant and the better part of 90% of anticipated increase in consumption over the next decade will come from Asia. Right now, China woofs 25% of the world’s entire production of soya to feed an increasingly ginormous pork herd, but global meat exports will surge – 5 million tonnes per year into China alone. Counterbalancing meat demand growth in emerging markets will be a slow drift down in per capita consumption in richer countries. Mind you, protein intake will grow, driven by pulses, dairy and complex meat substitutes.

  1. Nutrition and Health

The proportion of the world’s population that is under-nourished is falling, thank goodness, but over-consumption is increasingly pandemic. Under- and over-consumption bring huge avoidable costs to us all. Food culture and history explain astonishing divergences between countries: in Europe, obesity is 3 times higher in the UK than Italy; and it’s 10 times higher in the USA than in Japan! There’s a well-beaten path – first, government departments of health recommend we change our diet and lifestyles. Little happens and the food industry is exhorted to reformulate. Marginal changes arrive but too little, too late. Governments turn to fat and sugar taxes more as a stick to beat industry into accelerated change than to influence significantly consumer behaviour. The health & well-being megatrend is a long-term runner.

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  1. Global Economic Growth, Investment, Trade & Food Prices

Global annual economic growth is projected at 2.7% but it won’t be shared equally around the world. Watch out for hiccups in China, the USA and India – the first two have a disproportional impact on the rest of us, i.e. if they have a sniffle, we catch cold. A slowing China is entirely predictable but don’t forget that a VERY modest 5.2% growth in Chinese GDP is equivalent to adding “Another Germany” every 5 years! When the USA is struggling, China and India account for over 50% of global growth – a frightening reminder that economic performance in these two emerging markets can both make and break us economic minnows. Agricultural commodity prices are expected to remain at relatively low levels which is particularly disappointing for farmers ……

  1. Competition for Natural Resources, Agricultural Productivity and Innovation

…. because of growing scarcities of natural resources which will drive farm input costs higher. FAO anticipate “intense competition for diminishing resources resulting in further land degradation, deforestation and an unsustainable level of use of water resources”. But, there may be some mitigators: peak oil being pushed further back into the future because of alternative sources of both non-renewable and renewable energy; increasingly AI-driven, high tech agriculture bringing a productivity surge to commercial farming; science-based and societally-approved genetic engineering of plants with consumer and producer benefits such as nitrogen-fixing staple crops, drought- and disease-resistant crops, etc.; transformation of business models in farming fuelled by rewarding productivity increases (and other societal benefits) rather than focussing on slowing the rate of agricultural adjustment (e.g. elements of the CAP).

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Unilever and other Big Food using their scale for good.

 

  1. Climate Change, Natural Disasters, Conflicts, Crises & Migration

FFAO separate these into 4 separate, gloomy trend boxes but we lump them into 1. Unequivocally, climate-related disasters are escalating causing huge economic damage, viz. $100 bn. per year between 2004 and 2014 and exacerbated by higher global temperatures and erratic rainfall. For many countries, this will mean greater food insecurity – higher income consumers can cope if a staple or a treat leaps in price. But, it’s a different matter for the lady buying food for her family in The Philippines. More than half her family’s income goes on food and, if the price of rice rockets because of a nasty El Niño, she doesn’t buy less rice, probably she buys more and much less of the little treats she was starting to give her family (e.g. imported beef, dairy products). For exporters, anticipate more volatility when you are business planning.

Here’s another crisis in prospect: in Bangladesh, half of the 165 million people live so close to the water that a combination of rising sea level, more frequent and extreme weather events and add in the tragic influx of Rohingya Muslims from Myanmar, then, Bangladeshis and the world have a massive problem. Because when push comes to shove and their feet get wet, they’ll start walking – and in numbers that will make the more recent North African immigrant flow into Europe look like a Sunday picnic. This is a Bangladeshi issue but a problem that the world will have to solve. Mind you, it’s an ill wind etc…. as we’ll be needing the labour.

  1. Transboundary Pests and Diseases

Global food security is threatened by an alarming increase in the number of outbreaks of pests and diseases in animals and plants. Bird flu is a case in point. Two years ago, there was egg rationing in the USA for goodness sake – a country where they can’t spell rationing, let alone come to terms with food shortages! China’s National Health & Family Planning Board reported 79 human deaths in January, 2017 from Avian Influenza. The worry is that a mutation might allow human to human transfer of AI and that would beget a cataclysmic pandemic. Remember, more than 70% of infectious diseases in humans since 1940 can be traced back to animals.

  1. Food Losses and Waste

There is plenty of food to feed our world of 7.6 billion. It’s not evenly distributed and close to 800 million people end their day hungry. Yet, one-third of all food produced is lost or wasted! In emerging countries, food is mainly lost in the supply chain before it reaches consumers (e.g. spoils in storage, or in-transit). In “our” world, most of the waste is in the home – we buy too much and throw it away. We’ll all get better at this – better supply chain management and infrastructure in emerging countries and, in the Western world,  we’ll be shamed into more sustainable food buying and consuming practices and become savvier about spending our hard-earned money on groceries. Move on to 2050 – Malthus will be proved wrong again as we produce plenty of food for 9 billion consumers. The issue is will we be doing so in a sustainable way?

  1. Structural Changes within Economies and the Food System

As we travel the world of food, we note the accelerating pace of change in many markets. When David lived and worked in Africa, one huge constraint to smallholder farming was simply them getting paid for their output – payment was slow and poor via a labyrinthine marketing chain. Then, the mobile phone era arrives – Africa skips the need for a land-based telephone system and becomes a world leader in transferring cash safely via the phone. It’s refreshing to note, for example, Cargill’s “Cocoa Promise”  to small-scale farmers ensuring rapid and fair prices plus extension support to their mutual benefit – a better deal for farmers and a more secure and higher quality source of cocoa for Cargill. The triple bottom line approach to business is a megatrend and essential for “Big Agribusiness and Food” to regain the trust of farmers and consumers worldwide.

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We wonder about the path that grocery retailing will take in some emerging countries. Not necessarily the path of small grocery store (duka) through to large supermarket route characteristic of grocery evolution in our own markets – note the huge attraction of on-line grocery shopping for customers living in global mega-cities in Asia! In short, the evolution of food systems in Western economies is no blueprint  for emerging countries. What we’ve learnt is that, for any business person, it’s good to get out more (and go a little further than Tesco and Pizza Hut). Stay home, stay stupid!

Happy Christmas to any readers who have got this far in our last blog of the year. We’ll talk to you in 2018 and reveal all about Gothic ice cream and kombucha tea!

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Posted in Trends

Big Food: Going, Going, Gone?!

Big food companies haven’t been cracking open the champagne in recent years – in developed markets, sales have been in free-fall, with fast-growing emerging markets saving the day but, still, the overall sales trend has been ominously downwards, and this has been reflected in their share prices. It’s darkly amusing because consumer activist groups still rail against Big Food – Unilever, Nestlé, Kraft, Mondelēz, Danone et al – because, purportedly, they have global consumers in their thrall! But, listen to Emmanuel Faber, Danone’s CEO: “the food industry is going nowhere – because short-sighted companies see only a transactional relationship with consumers, not deeper ones based on values”.

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Rabobank graph with Euromonitor data for the US Market, showing the performance of Big Brands, Small Brands and Private Label in different categories.

What are the problems for Big Food? Well, there’s the one Faber identified above and here’s four more:

  • Consumers have moved on eschewing “over-processed” foods as they seek healthier, fresher, more natural snacks and meals with simpler ingredients. Take breakfast cereals for example, Kellogg’s Frosties, Post’s Fruity Pebbles and Honey Bunches, General Mills’ Cheerios screamed “sugar-drenched” to mums (if not to kids). Start-up companies, generally, run by millennials spotted the slow-footedness of these ponderous dinosaurs and whizzed in with new age products that pleased parents and their offspring. We blame those pesky, difficult-to-please centennial and millennial consumers. They deserve a good spanking but, the trouble is, there are 4 billion of them worldwide;
  • More broadly, consumers have been showing a distinct predilection to trust must less our traditional pillars of society – like big government, the church and, yes, big business (legal but nonetheless dodgy tax avoidance by Starbucks et al hasn’t helped here);
  • Big Food’s major customers – supermarkets – are under extreme pressure as Amazon and Alibaba are in the process of changing how consumers shop for groceries. When Tesco gets squeezed, its suppliers feel the pain. Doubly so, when supermarkets expand their private label offer at the expense of branded products to seek points of differentiation. What’s more, the centre of the store is being squeezed as shoppers flock to the perimeter where more exciting fresh and freshly-prepared foods are sold. No wonder the centre of the store is darkly termed “the morgue”!;
  • And, of course, an extended deflationary period – reflecting declining raw material prices (corn, soy, energy, etc.), over-supply in grocery retail bricks & mortar, households still recovering from the vicissitudes of the GFC hasn’t been helpful. When inflation is rampant, it’s a tad easier to sneak up retail prices than when shoppers expect prices to remain the same or fall.

Like big business in general, Big Food has this recurring nightmare of exiting the top 100 companies in their respective stock markets. The average lifespan of a company in the S&P 500 was 60+ years in the 1950s and, now, it’s less than 20 years. So, CEOs have similar nightmares to football managers in the  UK Premier Football League – viz. the threat of demotion to the lower leagues! To continue the football analogy, food businesses do the same as soccer teams when results turn against them – they change managers! Who’s done this recently? – well, in the last 20 months, 17 CEOs of big food companies have been sacked or “stepped down/retired”, including Kellogg’s, Mondelēz, General Mills, Hershey and, God forbid, even rock solid Nestlé. Particularly for US companies, getting the boss to fall on (usually) his sword is the first move to convince investors that a turnaround is a coming (shackled as they are to “deliver the financial numbers” every quarter). So, being promoted to CEO is akin to being presented with the “Black Spot” in Robert Louis Stevenson’s classic “Treasure Island” – the pirate king is doomed to a tragic end!

Sack the boss, is that the solution to its woes? No, Big Food has other arrows in its turnaround quiver, like:

  • Slashing costs across the business and doing it in a hurry before 3G Capital with Warren Buffet, the “Sage of Omaha” arrive on the scene and peremptorily acquire you and introduce zero-based budgeting (as they have manifestly and successfully done so with KraftHeinz);
  • Do the above but think big, again à la 3G Capital and merge Heinz and Kraft and, what’s more, have a go at adding Unilever into the mix to produce mega-economies of scale that astounded the market in February this year;
  • Reformulate/tweak existing products and accelerate NPD to launch healthier, on-trend products. Normally, this brings a rash of kale, chia, and panoply of gluten-free ingredients, or a link with a celebrity;

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  • Sell under-performing divisions/categories of the business – e.g. the spreads division of Unilever (“I Can’t Believe It’s Not Butter” doesn’t have to believed, it just disappears!). This is the “shrink to success” sub-strategy (unless you’re P&G when the sale over time of its coffee, snacks and pet food businesses was an “exit food for higher margin health, beauty and homecare” strategy);
  • Focus on faster-growing areas of the business. Nestlé comes to mind as it identifies – water, coffee, pet care, infant nutrition as high growth areas, with consumer healthcare a longer-term slow-burner, and accelerated pushes in emerging markets;
  • Buy a big player in a fast-growing area – e.g. Danone’s purchase of White Wave for $10.4 billion, whereby a major dairy-based foods company acquires a plant-based “non-dairy dairy” company with brands such as Alpro, Horizon Organic and Silk soy milk, or Mars and its $9.1 billion purchase of pet care company VCA, Inc. in the USA (the pet care market is growing at twice the rate of consumer foods);
  • Pervasively fashionable with Big Food has been the establishment of venture capital divisions with modest pots of money to buy into start-up companies that have product portfolios with high potential – e.g. Danone’s Manifesto Ventures that has invested in organic baby food start-up Yooji, Michel & Augustin (premium cookies and organic yogurts), Farmers Fridge (salad vending machines) and Accel Foods (a VC accelerator backing, inter alia, a company making tater tots from cauliflower) over the past year. Unilever, Nestlé, Kellogg’s, General Mills, Campbell’s have all been similarly busy with the hope that they’ve picked a Fever Tree start-up phenomenon that can go big time;
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Campbell Soup has just announced they are joining the Plant Based Foods Association, to reinforce their commitment to healthy food and perhaps buying new brands in this area!

  • Announce share buybacks to keep shareholders sweet and activist investors off the corporate back. This is a “capital structure” play that is preferred by the likes of Nestlé – and handy when one has cash but nowhere immediately to spend it on a high return opportunity;
  • Finally, the far-sighted food companies place society’s interests at the centre of their businesses and communicate this effectively to consumers, shareholders and other stakeholders. Unilever and Nestlé do this best. For instance, Nestlé’s use of the Creating Shared Value (CSV) tool: focusing on areas of greatest intersection between its business and society’s concerns – products with a nutrition, health and wellness dimension perform better than junk food in the long term, rural development programmes for farmers ensure long-term ingredient supply (e.g. cocoa) and are liked by consumers who want to know who produces the ingredients for Nestlé’s KitKats, and responsible stewardship and sale of water saves costs, lives and is positive environmentally. Paul Polman, CEO of Unilever, has been a thought leader in this area – the Unilever Sustainable Living Plan is about doubling the size of its business whilst reducing its environmental footprint and increasing its positive social impact (moving towards “net positive”). Emmanuel Faber (see opening paragraph) is onside, too, launching Danone’s “One Planet One Health” signature programme.

So, is it “Big Food, Going, Going, Gone?”! Well, let’s hope it’s Big Food Bad Food heading for oblivion. But, there’s nothing wrong with big companies – they’re not intrinsically bad. They bring scale, resources, technological sophistication, jobs and, when they move in a direction that is consonant with society’s greatest needs, they can be powerful accelerators of positive change. Let’s give Big Food some encouragement and a kick up the backside and may Little Food continue to harry them mercilessly. Whether you’re Big Food or Little Food, however, the principal key to commercial success is to produce tasty products that are irresistible and produced in ways that are in tune with the values of consumers and society at large. What must stick in the craw of Big Food that has got this message is that it’s a long row to hoe! In the meantime, the most profitable companies globally in grocery are the ones pedalling cigarettes and booze. Organic yogurts and chia-coated muesli bars can be yummy but they’re not addictive. C’est la vie – it’s a cruel world!

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Posted in General, Health, Premium, Trends

Red Alert on Red Meat!

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The consumer and food trade media is full of stories about “the end of meat as we know it” and, indeed, we’ve been banging on about “non-meat meats” for months – and for good reason. In the USA, plant-based burger companies Impossible Foods and Beyond Meat (which will be in UK restaurants and on shop shelves in 2018), lab.-grown “clean meat” Memphis Meats, Modern Meadows growing collagen-rich leather from animal cells, egg-mimicking mayo-producer Hampton Creek,  and others have attracted over $1 Billion in start-up finance from the likes of Bill & Melinda Gates, Li Ka-shing, Google’s Larry Page and other Silicon Valley noteables. Their rationale is partly altruistic but, partly, driven by the belief that the agriculture and food industry is due for massive disruption just as, concomitantly, the way that food and groceries arrive in our homes is being transformed via electronic platforms à la Amazon and Alibaba, and recipe kit start-up companies such as Hello Fresh and Blue Apron, with delivery agents Deliveroo and Uber Eats spreading like wild mushrooms across the globe.

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We recognise that there are pundits aplenty who take a cynical dyspeptic view that most of the above are ne’er-do-well Ponzi schemes that are bound to implode. Indeed, many will not make it but, do you doubt Amazon’s ability to change the rules of the grocery retailing game? Getting back to meat, available in 19 countries is 32 year old mycoprotein Quorn, now owned by Monde Nissin of The Philippines. Hardly new on the block, Quorn within the next couple of years will be the first $ Billion meat analogue in our world and it continues to cheekily labelling itself as “Meat-Free Chicken”!

Let’s nail our dietary preferences to the mast” David is a meat and 3 veg. baby boomer – a solid meat supporter although a little girly on portion size; Generation Xer Miguel is Spanish (or he may be – he’s from Barcelona , you know!) and Iberians wallop back way more meat per capita in toto (including seafood) than Brits do and consider vegetarian a term of abuse. Our headline views on meat include the following:

  • We’re at the apex of the species triangle because of meat. Our ability to hunt and eat raw meat, then, control fire to cook it, improve its taste and accelerate digestion rapidly grew the size of our brains. We are brainy because we eat meat – if we hadn’t, the other higher primates would have had us on toast (metaphorically, of course, because they are largely vegetarian). Remember, they’ve got opposable thumbs, too!
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Savvy shoppers can feel cavemen for a day!

But, because we’re brainy (or, at least, brainier than most chimpanzees), social and emotional we’ve got some issues we have to handle with meat and, in particular, with red meat which are both real and perceptual:

  • Most humans have got this unfortunate penchant that if we really like doing something and we’ve got the economic wherewithal to do it, we tend to do it to excess (Americans excel at this). This underpins growing concerns that as the global population increases and incomes grow commensurately, the so-called “emerging world” will gollop down “developed country” portions of meat and, then, we’ll run out of land, and bugger up the environment growing crops to feed to animals that convert them inefficiently. Grain-fed beef is a particular target in this regard. But no livestock species is spared. Brazilian rain forests can be felled to turn into pasture or into farm land that can grow corn and soybeans whether this be fed to cattle, pigs, poultry, or fish for that matter. Cutting to the chase, carbon sequestration is and will be increasingly a big issue for the livestock and meat industry;
  • Focussing on red meat, cattle and sheep are brilliant at converting grass into absolutely yummy meat (and dairy products) for our tables. This is fabulous because humans are particularly poor at digesting cellulose and gaining any nutrition from it – and if we could, who’d want a fescue sandwich? But, the real bummer is that our much-loved ruminants produce huge amounts of carbon dioxide, methane and nitrous oxide whilst catering for our red meat and dairy product preferences. All the scientific evidence shows that these greenhouse gasses are significant contributors to global warming which is bad for all of us (with the possible exception of self-interested Canadian Prairie farmers – nobody farms North of them, you know).
  • Animal welfare is a large and growing concern and for sound reasons. This is by no means to belittle the huge issues under this complex canopy, but the level of consumer concern is linked to the size of the animal at slaughter – ruminants en route to red meat for our tables such as doe-eyed cattle and gambolling lambs are a particular target of concern for consumers, mind you so are monogastric pigs (curse that anthropomorphic Babe).
  •  We’re living longer but not necessarily healthier and meat gets a bad rap in some quarters. Two years ago, WHO identified red meat as being probably carcinogenic and processed meats as being definitely so. Clap trap? Our view is that homo sapiens was probably not programmed genetically to shovel down 100+ kg. of meat per person per year. Governments who, in many countries, carry the can via taxpayers for the cost of the nation’s health, are increasingly signalling that we should eat 500 grms. of red meat per week not 500 grms. for dinner! This pressure will continue inexorably.

So, where are we? Meat industry folk have got a lot of issues on their plate to address; whereas ironically, in rich countries, consumers will have less meat on their plate! The impact of the above issues, the growing interest in plant-based proteins, flexitarian diets et al will all chip away at meat volume purchases per capita in our markets. But, Hallelujah – consumers with money are signalling that they might wish to eat less meat but, certainly, they want to eat better meats. Thus, the opportunity and challenge to work out what consumers value in their meat products and are willing to pay more for.

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A good start would be for us to recognise that millennial and centennial consumers (and there are 4 billion of them worldwide) don’t awake with the driving ambition to have red meat today. Soylent devotees apart (you know, the meal in a bottle folk), most consumers expect the food industry to come up with tasty, affordable and quintessentially convenient meal and snack solutions and NOT problems. Yet, the antediluvian “half shoulder knuckle on” lamb product still lurks in the freezer bins of most supermarkets – acknowledged only by poor pensioners and dog lovers and eschewed by anyone under the age of 40 as they recoil from the apocalyptic sight that puts them in mind of an axe murder. We’re astonished that some retailers still display fresh meat by species – i.e. the beef/pork/chicken/lamb sections – and not by usage/occasion – e.g. meal in under 10 mins./special friends coming/for the kids sections. But don’t start Miguel ranting on about the British foible of having special dumb meals for children. “What’s wrong with giving them smaller portions of whatever the adults are having”, he says. You know those quirky Mediterraneans!

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British Retalier J Sainsbury’s catering for all: those who want to cook or can’t afford, pick the ingredients, those who don’t want to cook or are poor on time, pick the ready meal stew-in-30-minutes-no-fuss pack!

Whilst increasing protein intake is seriously on-trend with many consumers, there’s much more than red meat in their protein selection set. Remember, too, that the 3 meals a day approach to feeding the body and social soul is fragmenting. Mini-meals and snacks are the order of the day. Red meat snacks? Ah, the renaissance of jerky. Miguel was at a fish conference in Dublin last week and dashing through the airport he noticed the protein-on-the-go product below. A snip at £3.59 per 25 grm. pack. Do the maths and rejoice in the commercial anticipation of opportunities for brain-building, story-packed red meat! Red Alert on Red Meat? Beef and Lamb have their issues, but let’s celebrate that they are premium products and ensure that consumers are happy to pay more for them.

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Posted in Fresh Products, Trends

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About the authors
Prof David Hughes: Around the world, David speaks to senior agribusiness and food industry managers about global food industry developments that are and will affect their businesses and industry. Energetic, engaging, humorous and insightful, David gains the very highest evaluations at seminars, conferences and Board level discussions in every continent he visits. Miguel Flavián: works for several Spanish organisations and companies to help them to learn from the developments of the British grocery market and improve their business back home.