2010 State of the Industry
July 22, 2010
By Bob Garrison
What if we could become smarter … just by owning a smartphone?
There’s no denying that today’s technologies present so much opportunity (capability) and information. Now pushing the 4G frontier, smartphones combine the best features of telephones with clocks, music players, video recorders, radios, gameplayers, computers … and more.
Yet it’s not enough to simply own a smartphone. We need insight – a clear sense of direction and of what we need to know – to connect opportunity and information and truly learn, or create an advantage.
True business growth now requires more than applying push-button solutions with different “apps.” The industry’s most successful refrigerated and frozen food processors are using more developed customer and consumer insights to guide everything from product development and marketing to operations and logistics strategy.
The good news, meanwhile, is that market trackers are starting to see an uptick in foodservice activity. This May, Technomic, Chicago, adjusted its 2010 U.S. foodservice industry nominal growth forecast upward … from a decline of 1.6 percent to positive growth of 0.6 percent.
Elsewhere, retail trackers SymphonyIRI Group and The Nielsen Co. show that nearly all retail refrigerated and frozen food departments posted year-over-year dollar and unit volume gains in 2010. Value-added, prepared foods also are driving growth at convenience stores and supermarket deli departments (“Need for Convenience Fuels Growth in Prepared Food Purchases at Supermarket Grocery Store Delis,” – NPD Group, June 14, 2010). Consumer research even shows growing home microwave meal preparation (while stovetop meals decline).
How do food processors take advantage of so many positive trends? This is when companies need insights to make the right call regarding …
… nutrition. Processors already have been reducing sodium levels. Meanwhile, new research suggests that consumers still are confused about dietary fiber benefits (Mintel Group, May 2010).
… value. Strong private label growth – across the board – sets a new “value” standard. CPG companies will lose more market share unless they step forward with more added value. Likewise, it’s time for foodservice processor-suppliers to deliver insightful product solutions, not just products.
… sustainability. More customers, consumers and investor groups are paying attention to carbon footprint data – and improvements everywhere (packaging, logistics) can be meaningful.
… food safety. There’s growing consumer and customer interest in food safety and security. Track-and-trace programs are more critical – with more imported food ingredients as well as high-profile food recalls.
… acquisitions. Acquisitions (and follow-up integration) must deliver growth on new platforms. Nestle USA and Pinnacle Foods used big deals (acquiring Kraft Pizza and Birds Eye, respectively) to enter new categories. Hormel acquired Unilever’s Country Crock brand to branch out in refrigerated foods.