The great fragmentation of the food-bev landscape
There are food-bev companies where the directors and shareholders still believe that their business teams must look for new “high volume opportunities”. Believe no more, asserts UK trends thinktank on food and health, New Nutrition Business.
Out of touch with the reality of a changed market-place, they do not understand – and cannot believe – that high volume opportunities are scarce and becoming scarcer. In some markets they may already be history.
The shift in the food landscape is influenced by 25 years of digital sampling, mash-ups, music sampling, remixing, restaurant fusion food – all an established part of the culture that surrounds people.
The person who listens to Bach’s Goldberg Variations while working at home also listens to Aerosmith or Black Sabbath while driving to work.
People’s ideas about food and health have also become a menu of choices, from which they select and change as new information becomes available. We’re all food explorers now, looking for novelty and variety.
The fragmentation of eating habits is happening against the backdrop of what, according to consultancy firm PWC, has become the defining force of food and beverage strategy:
“What we call the great fragmentation is manifested in consumer behaviour and market response. In both developed and emerging markets, there is a wider variety among consumers now than at any time in the recent past.”
This is producing a proliferation of niches which smaller companies and new brands – often premium – are perfectly placed to serve.
In the future, smart companies will only rarely launch mass-market brands aiming to rapidly get high volume. Instead they will build portfolios of small brands, finely targeted at an ever-more fragmented consumer market. A few of these will become big brands, some will be big niche, most will remain niche.
A few larger and more visionary companies are already embracing the change, such as US giant General Mills, which has set up a new business unit – called 301 Inc – to invest in entrepreneurs and early stage food companies.
“The rapidly evolving consumer landscape is dramatically changing the game in the food industry,” said John Haugen, general manager of 301 Inc. “Tremendous opportunity exists…. to partner with and foster emerging food brands.”
As the Great Fragmentation moves forward, this new model will become the standard for large food and beverage businesses.
Source: New Nutrition Business
Trackback from your site.161 Views