by Jamie Allebach
What makes for the “perfect storm” in the food business? How about when the industry is squeezed so tight it becomes more and more difficult to make a profit, and consumers are no longer loyal to your brand?
Transformation is happening in the food industry. Intense margin pressure, erosion of brand equity, declining demand, and manufacturing and transportation costs are rapidly changing the landscape for food companies.
Consumers are transforming and changing, as well—what they buy, where they shop and how they eat. Economic conditions, stagnant or declining income, the cost of living, and food costs have radically changed consumer meal rituals. These factors result in eating out less, purchasing more private label and store brands, doing more with less, and sacrificing some of the convenient and indulgent products that they love.
Four years ago, convenience was king. Now, price has become a more important consideration.
These industry factors and consumer transformation are causing the “perfect storm” for food brands. So, you can either succumb to current conditions or develop new strategies that will help you compete and thrive in this transforming economy.
Here are some solutions:
Brands need to remind consumers that they have a unique value proposition that makes them an essential part of their consumer experiences. Your brand needs to be an integral part of your consumer’s lifestyle—quality, taste, value, or uniqueness that they are not willing to compromise.
New product innovation that fits with the “new” consumer lifestyle is key. Products that complement in-home meal solutions and enhance the in-home dining experiences are being firmly embraced by consumers who are dining out less often.
Shift advertising dollars from mass media to shopper marketing initiatives. “Awareness” and pure “brand” advertising are out. Go direct to the shoppers. Go in-store, where 75% of purchase decisions are made. Invest dollars in account specific marketing.
Embrace social media. “I can’t afford to have my marketing team spending time on social networks.” “We don’t know anything about social media.” “How can we track the ROI.” Get over it! Social media is here to stay. It’s transforming how brands are built and products are marketed. Social media is a revolutionary way to reach consumers. If you can’t manage it internally, outsource it.
There are some who believe that these are not simply swings in industry and consumer behavior, and things will return to “normal.” Others believe that this is the “new normal.” I can’t predict the future. But I can tell you this; if companies and brand don’t change and adapt, they will not survive in this new market. Don’t ask yourself “what can I do to survive.” Find out what consumers want and meet the demand.
In the current economic “Perfect Storm”, you can go one of three ways with your brand; survive, die, or THRIVE.