Post on 19-Jan-2015
description
Growth Solutions GroupMarket StrategyResearchBrand & Communication
Level 11. 99 Queen StreetMelbourne. Victoria 3000. Australia
T. +61 3 9670 4700W. www.gsg.com.au
Reason meets Imagination
This document is not to be copied without permission
Consumer Demand: Unlocking Hidden Growth2010 RWTA Conference
30 August 2010
2
Food retailing more fragmented, more competitive, more demanding
Forces at play
Changes in Retail structure
Consumer Trends
Investor Demands
Export & Global Market Pressures
Retailer Responses
• Supermarkets stretching into new categories to protect revenue/growth
• Reduction in supply chain costs• Consolidation of suppliers• Improved logistics• Passing SC management
responsibility back to suppliers
• Growth in private label – tiers of value
• Localisation – ‘my’ grocer, baker, in-store greeters, etc
• Information & resource offer around healthy eating
Source: Foodmap: A comparative analysis of Australian food distribution channelsDepartment of Agriculture, Fisheries and Forestry
3
…with more pressures on the Supply Chain
Source: Foodmap: A comparative analysis of Australian food distribution channelsDepartment of Agriculture, Fisheries and Forestry
Forces at play
Changes in Retail structure
Consumer Trends
Investor Demands
Export & Global Market Pressures
Retailer Responses
• Supermarkets stretching into new categories to protect revenue/growth
• Reduction in supply chain costs
• Consolidation of suppliers
• Improved logistics
• Passing SC management responsibility back to suppliers
• Growth in private label – tiers of value
• Localisation – ‘my’ grocer, baker, in-store greeters, etc
• Information & resource offer around healthy eating
Supply Chain pressure
Manufacturers
• Growth pressure
• Relationship pressure
• Margin pressure
• Increased costs
• Increased competition
• Increased difficulty to recoup costs on investments
Fresh Product Suppliers
• More demand for products to meet retailer specs
• Demand for better product performance
• Greater competition
• Information pressures
4
Success has been about getting it right for your customers
Business Business
You Your customer
Value=
On time
Quality
Flexibility
Service
Responsiveness
Cost
Business
Your customer Their customer
Consumer
Value=
Convenience
Quality
Usefulness
Experience
Service
Price
5
Success has been about getting it right for your customers
Business Business
You
Value=
On time
Quality
Flexibility
Service
Responsiveness
Cost
6
Today’s Presentation
1. Real ‘demand’ starts before the shelf
2. A visit to Consumer Land – Macro trends
3. Consumer Driven Improvements – Case Studies
4. Implications for the future
7
The voice of the consumer is getter louder
“I’ll tell you what I want, what I really, really want”Spice Girls, 1996
8
The voice of the consumer is getter louder
“I’ll tell you what I want, what I really, really want”Spice Girls, 1996
NOTJust about asking them what they want any more, or demand monitoring at the shelf.
BY UNDERSTANDINGWhat Consumers want through their behaviours, attitudes and opinions, even before they get to the store.
9
Getting behind the data
What are they buying
When are they buying
How are they buying
Supply chain response
Why are they buying?• How are they feeling?
• What else are they doing that is related to this?
• What and who are influencing their choice?
• What needs do they have? Or will they have?
Monitoring Demand at the shelf
Demand Planning is a powerful management process…but can we look beyond demand to macro level influences?
10
Top 20 Food Trends
11. Super-fruits (acai, goji, mangosteen, purslane et al)
12. Organic produce
13. Culinary cocktails (e.g. savoury, fresh ingredients)
14. Micro-distilled/artisan liquor
15. Nutrition/health
16. Simplicity/back to basis
17. Regional ethnic cuisines
18. Non-traditional fish (Arctic Char, barramundi etc)
19. New cuts of meat
20. Fruit/vegetable children’s side items
1. Locally grown produce
2. Locally sourced meats and seafood
3. Sustainability
4. Bites size/mini desserts
5. Locally produced wine and beer
6. Nutritionally balanced children’s dishes
7. Half portions. Smaller portion for a smaller price
8. Farm/estate-branded ingredients
9. Gluten-free/food allergy conscious foods
10. Sustainable seafood
Source: US. Restaurant News (www.nrn.com) US Chefs
11
Immediately relevant
Source: US. Restaurant News (www.nrn.com) US Chefs
11. Super-fruits (acai, goji, mangosteen, purslane et al)
12. Organic produce
13. Culinary cocktails (e.g. savory, fresh ingredients)
14. Micro-distilled/artisan liquor
15. Nutrition/health
16. Simplicity/back to basis
17. Regional ethnic cuisines
18. Non-traditional fish (Arctic Char, barramundi etc)
19. New cuts of meat
20. Fruit/vegetable children’s side items
1. Locally grown produce
2. Locally sourced meats and seafood
3. Sustainability
4. Bites size/mini desserts
5. Locally produced wine and beer
6. Nutritionally balanced children’s dishes
7. Half portions. Smaller portion for a smaller price
8. Farm/estate-branded ingredients
9. Gluten-free/food allergy conscious foods
10. Sustainable seafood
12
Macro Trend 1: Health / Well-being are part of life
An ageing population, who are still young at heart…plus a national focus on obesity / diabetes / heart disease will influence consumer choice (and brand messages)
• Ingredients matter – choose natural
• Supplements are ok if it’s about enrichment / advantage
• Smaller portions
• More fresh options in pre-made
• Endorsements or ‘ticks’
Mellentin’s 10 Key Trends for 2010 are :
1. Digestive health – a mega-trend moves beyond the tipping point
2. An intrinsic health benefit that’s also convenient
3. Feel the benefit – the most powerful marketing message
4. Energy – a world of untapped opportunities
5. Fruit and superfruit – the future of food and health
6. Antioxidants – big in America, dead in Europe?
7. Weight management
8. Healthy snacking
9. Packaging and premiumisation
10.Bones and movement
Julian Mellentin: Industry Expert, Nutritional Foods
13
Preshafruit
14
Macro Trend 2: Where it comes from matters more
Consumers are placing increasing importance on…
• Knowing who’s behind the product (maker)• Fresh is best, even better it’s local• Authenticity – farmer’s markets• ‘My’ grocer, butcher, baker etc – dealing with
people who care about food• Frozen food with locked-in freshness
15
Macro Trend 3: Good food that’s easy to get
Trading off quality & convenience is no longer necessary, or acceptable.
Retailers and the media are constantly illustrating how we can achieve simple, good food for under x dollars, in under x minutes.
16
Yarra Valley Farms – Branding in Food Service
17
Aussie Farmers Direct - Back to the future
18
Macro Trend 4: Green is good
Consumers want brands/retailers to take more responsibility
• Carbon footprint• Green / environmental standards• Fairtrade / ethical supply – Cadbury & Nestle
response to consumer backlash on palm oil
(But most will still trade-off for price)
19
Macro Trend 5: Polarization of behaviour
Source: IBM – The Consumer Driven Supply Chain
20
Angus Burger – Premium Pricing
Angus Burgers$6.45 - $6.75
Big Mac$4.45
21
Macro Trend 6: NOW technology
“WHAT, WHERE AND WHEN I WANT”
22
Less Is Best: Haagen-Dazs – Especially for you
23
Less Is Best: Haagen-Dazs – Especially for you
24
The Retailers under pressure to deliver change
Focus on consumers
Store formats
Retailers
Multi - Channel
Experiences
Branded ingredients
new…Understanding the shopper better
Information resources on food & nutrition
Smaller footprint x increase locations
Aldi, Costco – changing shopping behaviourAFD, The Greenline – direct to consumer
Online entrenched, mobile web emerging
Self-serve checkouts, drive through supermarkets (UK), in-store market spaces
Private label with value-added ingredientsBranding location of origin
25
Costco is changing the way consumers shop & eat
Toiletries
Fresh Food
Bakery
Laundry & Cleaning
Frozen Food
Savoury Snacks
Non-alcoholic beverages
Canned Food
0 13 25 38 50
• Collective shopping – multiple families involved
• Takes whole categories out of supermarket shop e.g toiletries
• Bulk food purchase also changing consumption habits – more homogenous meals
• Appeal of unique product formats that can’t be purchased in supermarkets
26
Retailers are responding quickly to consumer trends
Consumer trend/demand
Fresh
Local
Natural “Tassie Grown”Woolworths
Woolworths ingredient branding
27
Coles - “It’s all about the customer”
Half way through a 5 year transformation process
''The most important factor for us is that we are aligned to what the consumer needs are, and which consumer needs are changing”Ian McLeod, Coles Managing Director
28
New channels & experiences are changing the way we shop
Customer has greater control over their shopping experience.
Expectations are changing – customers are demanding more information about pricing and inventory – so they can make better decisions.
29
Cold Chain Challenges in responding to the end-consumer
• Lack of visible consumer information
• Different drivers of consumer value by channel
• Increase fragmentation of food service sector, new channels to market
• Competing demands creating increased complexity in solutions
• Closer to source • natural & fresh • convenience • price
30
Implications & Opportunities
• Innovation in product and format to meet consumers convenience needs
• Solutions to respond to growth in out-of-home consumption/dining
• Branding/capturing value in the origin or location
• Responding to demands for localised sourcing
• Bringing niche/gourmet to the mass market
• Leveraging technology to get closer to the consumer and add value
• Partnerships and alliances to create one-stop solutions for small/independent food retailers
• Strategic account management to enable value capture
• Greater capacity to support merchandising & shelf management
Responding to consumer needs, through the supply chain
31
How do you respond to Consumer Trends?
Macro Consumer Trend:_______________________________
31
How do you respond to Consumer Trends?
Impact on your CustomersWhat will their customers demand/need?
How will their industry be affected?
How with their company be affected?
What challenges does it create for them?
What advantages does it create for them?
How will their competitors respond?
Macro Consumer Trend:_______________________________
31
How do you respond to Consumer Trends?
Impact on your CustomersWhat will their customers demand/need?
How will their industry be affected?
How with their company be affected?
What challenges does it create for them?
What advantages does it create for them?
How will their competitors respond?
Impact on your BusinessWhat will your customers demand/need?
How will your business be affected?
Which products/services will be impacted?
What challenges does it create for you?
What opportunities does it create for you?
How will our competitors respond?
Macro Consumer Trend:_______________________________
31
How do you respond to Consumer Trends?
Impact on your CustomersWhat will their customers demand/need?
How will their industry be affected?
How with their company be affected?
What challenges does it create for them?
What advantages does it create for them?
How will their competitors respond?
Impact on your BusinessWhat will your customers demand/need?
How will your business be affected?
Which products/services will be impacted?
What challenges does it create for you?
What opportunities does it create for you?
How will our competitors respond?
Macro Consumer Trend:_______________________________
Your ResponseWhat problems can your help them solve?
What current solutions can you offer?
What solutions do you need to develop?
Which partners in the supply chain can assist?
Will this help to satisfy the consumer need?
32
What does this mean for Cold Chain businesses?
Anticipate
Move
Influence
Not just responding to demand, but anticipating what future demand may be
Being agile enough respond to changing consumer trends
Help to shape consumer demand through supply chain transformation & innovation
Growth Solutions GroupMarket StrategyResearchBrand & Communication
Level 11. 99 Queen StreetMelbourne. Victoria 3000. Australia
T. +61 3 9670 4700W. www.gsg.com.au
Reason meets Imagination
This document is not to be copied without permission
Thank you.