Business & Policy
What Do Consumers Want?
How industry can deliver
By Kristy Nudds
Consumer needs and wants are the driving force behind many decisions made within the food industry.
Consumer needs and wants are the driving force behind many decisions made within the food industry. Retailers, primarily big-chain grocery stores, are constantly trying to compete with one another to retain both consumer confidence and their money. Understanding the needs of both groups can help poultry producers and industry remain competitive.
This was the topic of a presentation given by Peter Chapman, founder of GPS Business Solutions, an independent consulting practice that provides services to agricultural producers and manufacturers who want to increase sales to their customers – the retailer – at the recent Atlantic Poultry Conference in Greenwich, Nova Scotia.
With 19 years experience at Canada’s largest food retailer, Loblaws, Chapman has an in-depth understanding of food retailing in the Atlantic Canadian marketplace, from developing relationships with suppliers through the supply chain system to merchandising at the retail end.
Chapman began his discussion by asking producers in attendance – who is your customer? The immediate answer given by most was the “consumer”; however, Chapman was quick to point out that, as producers, their primary customer is in fact their processor, whose customer is the retailer.
So where do consumers fit into all of this? It’s their perception of what quality means, their dilemmas at dinnertime, demographics, and cost requirements that dictate what a customer (processor/retailer) requires, and consequently what poultry producers need to provide.
Although the needs of customers and consumers are closely tied, the requirements of each group have unique aspects. “Are you providing what a retailer needs?” asks Chapman. “You should have conversations about this.”
By far, the most important requirement for a retailer is a safe food supply, says Chapman. “They need to be able to provide a consistent, safe product,” he says. “The consumer demands that safety is delivered every day and that there is transparency and responsibility within the industry.”
The next important factor is quality. Colour, taste, cold chain integrity, and code dates are issues that retailers are looking for in a product. Consumers are looking for a well-trimmed product, whether or not moisture is in the packaging, and a long-shelf life once it’s home in their refrigerator. “Retail sales are impulse,” says Chapman. “If the product doesn’t look good, a consumer won’t buy it.”
The biggest variable in poultry quality for a retailer is shrink, he says. “This needs to be reduced.”
After quality, convenience is what consumers look for next. “You need to start thinking about how you can produce products that people can eat in their car,” says Chapman. Sounds far-fetched, but it is far from it. Consumers today have busy schedules and are tight on time, and increasingly meals are being purchased at the drive-thru window.
Other convenience features consumers look for is quick preparation times and simple cooking instructions and re-sealable packaging. Chapman says, “For ready-to-eat meals, include all the ingredients a consumer needs, in addition to the meat.” He recommends using the “new” (i.e. trendy) ingredient(s) that are currently popular or perceived as healthy.
“It’s a different consumer than what it was,” says Chapman. Consumer demographics are changing. A large proportion of the population is reaching their senior years and ethnic populations are increasing. Chapman states that even people born here in Canada have been exposed to cultural food, in ethnic restaurants, or by using internet recipes, etc. “You need to figure out what foods these people want to eat.”
For the aging population, options might be reduced package sizes and larger print labels, he says. Today’s senior is also more health conscious, wanting to protect their aging bodies and consequently, are looking for better nutrition.
Nutrition is a big factor in consumer purchasing decisions, regardless of age, and Chapman says that the poultry industry “has a great story compared to other proteins.” Obesity, particularly child obesity, will be the number one nutritional concern/challenge facing consumers.
Industry can meet this challenge by providing more detailed information on labels, and continue to foster research and innovation into functional foods. “Poultry has great nutritional components and you can do a lot with it,” states Chapman.
At the customer end, retail is undergoing a huge evolution, primarily driven by Wal-Mart, says Chapman. Although no Wal-Mart Supercentre (which includes a full grocery store) is present yet in Atlantic Canada, Chapman estimates that one will open in two to three years. But in the rest of Canada, where many of these types of stores have opened in the last few years, retailers are facing stiffer competition to provide low-cost, high-quality, safe and convenient nutrition. “Nutrition is critical,” he says. “But don’t make it expensive.”
“A retailers biggest challenge right now is to deliver sales growth,” he says. To compete there are many opportunities that exist for industry and retail to work together.
To differentiate poultry from other proteins, Chapman says innovation is key. “Any opportunity to differentiate the offering is a win.” This can be achieved through premium options and providing dependable orders. “Make sure you can meet the promised supply,” he says. “There is nothing more frustrating to a retailer and consumer if a featured item in a store flyer is unavailable due to lack of supply.”
Premium options are what will differentiate poultry from other proteins in the eyes of consumers. To do so, utilize innovative packaging and pack sizes, improve shelf life, providing value-added products, focus on nutrition, and provide display advertising/marketing material. However, Chapman says the industry needs to understand the size of an opportunity and be objective about whether or not a product really delivers. This is the type of conversation retailers, producers and processors need to have together.
Although poultry has significant opportunities to compete, the current economic recession “changes everything,” says Chapman. “The recession will alter consumer purchasing patterns.”
This is where utilizing smaller package sizes might come into play. “Right now, this might be best for families who have lost 20 per cent of their disposable income.” Or, it could mean an increase in the number of whole-bird purchases, as families can get an extra meal out of leftovers. It could also mean changes in fast-food consumption.
Industry growth might also have to remain stagnant until the economy picks up. “If you are used to a four to six per cent growth each year, remember that after the recession (18-24 months from now) consumers will still be purchasing at 2008 levels,” he says.