How are customer tastes evolving in the food market?
11th November 2015
When it comes to the consumption of food, individual tastes and preferences are a significant driver of innovation, market shifts and new products.
With so many factors to consider, it can be hard to identify and make full use of emerging trends. With this in mind, how can companies utilise business management software to capitalise on these growing areas?
Global growth propelled by changing tastes
Frost & Sullivan recently predicted that the market for food & beverages will reach US$20 to US$25 trillion by 2030, in terms of consumer expenditure. This growth is compounded by rising interest in particular areas such as freedom products and organically produced foods. These two markets are expected to reach $500 billion and $40 billion respectively in global sales by the end of 2015.
In order to see further growth, firms must revisit their production methods.
Despite the rise in expenditure, the organisation believes that retail prices will decrease to similar levels seen in 2010. In order to see further growth, firms must revisit their production methods, aided by business intelligence software.
"The food and beverage market needs new tools, knowledge and processes to produce the food that people want," said Food and Agriculture Senior Industry Analyst Tosin Jack.
Consumer trends aren't the only influencing forces in the sector. In terms of raw materials, Acidulants are becoming a more commonplace additive in production. The compound helps to stabilise pH levels, balance flavour and improve the shelf life of food products. According to Report Buyer, this particular market will grow by 7.6 per cent over the next five year to a value of US$6134 million globally.
Capitalising on shifting trends
In order to keep up with these social changes, it is important for businesses to keep collecting and analysing data from their target market. As a whitepaper from MarketResearch.com explained, customers are attracted to authenticity and food purchases are intrinsically linked to a variety of social factors, often unique to the region. This requires an organisation to constantly revise its strategy.
It is also important to assess whether adopting a new product or method is feasible and will produce a good return on investment. Using technology such as business accounting software can be good way to accurately calculate this and how to best price new products.
Wine industry set to see major recovery
Trend shifts in the industry are not limited to food products in Australia. A number of recent reports have highlighted growing value within quality alcohol production.
According to Wine Australia, September marked a key turning point in exports for local growers. Values grew by 8 per cent over the year to a total of AU$1.96 billion, the highest rate of growth seen since 2007. This was mainly propelled by growing interest in Asian markets. For example, growth in China was pegged at 47 per cent, with the country contributing $116 million. South Korea is another growing market as both value and volume exported grew by 16 per cent in the year to September.
The average value of wine now sits at a record high of $15.45/litre. Although it is early days for recovery in the industry, Chief Executive Officer Andreas Clark was pleased with the results, stating that a small group of growers had sold their 2015 vintage wines at higher prices this year.
Smaller breweries in need of new strategies
Pushing value as a selling point is also becoming a more commonplace strategy in the beer industry. Tim Collin, co-director of craft beer company Vale Brewing, stated that the variety of available beers is changing purchasing habits.
"In the wine industry the customer expectations in terms of flavour profiles and quality is very high, and that's the same in the beer industry as well," he explained in a a September 30 SmartCompany interview.
"There's a rejuvenation of beer flavours and a moving away from the standard Australian lager-style beers and into a lot of other styles of beers."
Mr Collin went on to explain that larger breweries may have an advantage in this field. This is due to a lack of economies of scale for smaller firms and the fact that larger conglomerates have better control over production.
However, merging or collaborating with other firms may help. On September 28 craft brewery Mountain Goat Beer handed over ownership of their company to Asahi. The two original partners were able to retain control and have a say in the brand and product while still keeping up with bigger competitors.
There are many ways that companies can interact with each other, whether it's through mergers, supply agreements or joint ventures. Pooling together resources and capabilities allow a group of smaller companies to stay competitive with larger players in the market.
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