This year will mark the fifth anniversary of the credit crunch … and the UK’s deficit reduction plan still has five more years to run. The US hasn’t even started to tackle its enormous debt yet.The eurozone is staring over a precipice. And even china is juddering after a massive collapse in property prices.
According to Christine Lagarde, head of the IMF, “there’s no economy in the world immune to the escalating crisis'.It’s a problem that spans the globe but we feel it close to home.
In 2009, 46% of Scottish consumers said they were willing to pay more for higher quality red meat … but by last year this had fallen to 30%.
And only 5% of Scottish consumers expect to be better off this year.
But that’s enough doom and gloom. It’s not all bad news.The world’s population is still growing.A huge new middle class is emerging in countries like China and India … one reason why meat consumption is expected to double again over the next forty to fifty years. UK population is growing too.
We’re only partway through the digital revolution. This is a golden age for science and technology.
And even in these economic conditions, some companies and industries will be able to grow rapidly.
That can definitely include Scottish red meat. So let’s think positive and plan ahead for a prosperous future.
The economy may have stagnated but that doesn’t apply to consumer behaviour.Consumers have adapted skilfully to the new conditions.
They’ve become more disciplined … shopping more often but spending less per trip … and yet they do still care about quality and ethics … with a growing sense of community.Throughout this decade of great change, the secret for businesses … as always … will be to anticipate and arrive there first.
Fortunately, shoppers are sending us lots of signals about the future.Through our research, we’ve been able to get a deep understanding of what shoppers want from the food industry.
They’ve told us they still find it difficult …
- to keep within a fixed budget …
- to plan meals ahead …
- to choose a varied diet that keeps the family healthy …
- to find enough time for shopping and cooking …
- to compare quality and prices and get the best value …
- to avoid waste …
- to learn as much as they'd like about food …
- to choose products that reflect their ethical standards …
- And to achieve good results every time they cook.
So I’m sure the food industry will respond and deliver improvements in all these areas … but it is a long list and so we asked shoppers what they’d really like the food industry to concentrate on.
They gave us three priorities … help with keeping to a budget … product provenance … and the store experience.
So that gives us the outline of a plan.If you meet those three needs, you will reap the benefit.
So I’d like to flesh out this plan by exploring the challenges in turn … starting with help to shop on a budget.
The average British worker has seen spending power fall by more than 3% over the last two years.
And specifically for meat … inflation has been close to 6% compared with wage increases of 1.4 … a gap of four and a half percent.
So no wonder more than four in ten shoppers say they’re increasingly likely to stick to a set budget … with over half claiming to check the price of every item they buy.
However, nobody likes to lower their standards … and so people are trying to safeguard ethics and quality through extra effort and ingenuity. For example they’re spending more time researching before they buy and shopping around to get the best prices.
Seven in ten shoppers say that promotions are very important in their choice of store … with almost as many saying it’s key to their choice of products.So shoppers are hunting harder for deals creating complications for retailers and their suppliers.
Demand is going up and down in waves … sales are harder to predict and profit margins are regularly squeezed.
Red meat has been relatively less affected and you’ve been spared some of these problems although you could lose out on sales. So if not through price cutting promotions … you will need to keep finding other ways to grab attention and convince shoppers of the value you offer.
Another way shoppers are making savings is by cooking from scratch.Almost one in four British shoppers told us they’re doing this more than a year ago.
21 million people tuned in to the BBC’s great British bakeoff series last year. We’re seeing a rediscovery of traditional cooking and slow food … even mutton, that long forgotten meat, is suddenly fashionable again.
It’s a trend you can turn to your advantage.Red meat is versatile … and as many chefs testify, cheap cuts can be the tastiest.
I’m coming round to this myself.One of my favourite recipes is “seven hour lamb” … cooked in red wine on a low heat for most of the day.I used to do it with leg of lamb until I recently discovered that shoulder works too. So as more people learn lessons like these it should help to popularise more cuts and help processors with their carcass balance.
More than one in four shoppers want help on how to cook and one in five want more recipe ideas.
The under 35’s are the hungriest for help and QMS has been on to this … offering advice for home cooks including through smartphones.
Retailers are working on it too and there’s scope to join the messages up.
Sainsbury’s has a “live well for less” campaign which includes advice on buying meat. And Tesco offers an online planning service including meals on a budget.
Shoppers do want more than just information though.
They told us they’d like more “meal deal” promotions such as “feed your family for a fiver” based on ingredients and not just ready meals.
Red meat could play a big part in this.
However, for most people the simplest way to save money on food is to cut back on the amount they throw away.
According to Wrap, the average British family could save over £50 per month by eliminating food waste … and the public spends a total of 1.3 billion pounds on avoidable meat waste per year. Half of British shoppers say they took steps to reduce food waste last year and half intend to try harder again this year.
It’s an international trend and why Heinz introduced a new range of 99 cent mini sauce packs in the US.
Helping consumers to buy less might sound like shooting yourselves in the foot … but remember you’re competing with other proteins.When people have to economise they will switch to lower waste products.
So it’s definitely in your interest for people to appreciate that red meat can be low waste.
Red meat comes in various forms and sizes to suit every appetite. It can be cut and portioned to order. It’s freezable … and there are lots of ways to use the leftovers. And these positives can be strengthened by providing advice … for instance on how to assess the right amount to buy, how to store meat and how to use and freeze leftovers.
Again, QMS is working on it … and again, you might find common cause with retailers ... including the “great taste, less waste” campaign at Morrisons.
The second big opportunity to respond to shopper needs is to capitalise on the mounting interest in provenance.
Just because people are making savings it doesn’t mean they only care about price.
Lots of people have responded by reducing the quantity of meat but concentrating instead on quality.
Almost a third of British shoppers told us they’ve done this already … with another 30% finding the idea appealing.
So despite their financial pessimism, a quarter of Scottish shoppers expect to see quality play a bigger part in their red meat shopping decisions this year.
We asked people what they’re still prepared to pay a bit extra for and the top four answers were … quality of ingredients … animal welfare standards … locally produced and a known country of origin.Add those together and you have a working definition of provenance.
Most people have been shaken by events in recent years … are now less certain about who to trust and yearn for some reassurance. More than eight in ten shoppers say that the way food is produced is at least “fairly important” to them.
Fewer than one in five of British shoppers say they know “quite a lot” about how their food is produced whereas almost double that number would like to.
So the interest in food provenance keeps rising … and the more information is put online, the more people feel it ought to be there … or they feel suspicious. So please don’t imagine for a moment that the economy is eroding the relevance of assurance schemes.
The case for assurance continues to strengthen … and QMS in particular holds some powerful cards. The Scottish accent has been voted Britain’s most reassuring.
From our research, 88% of people recognise the scotch beef logo in Scotland? Even in London it’s 39% … still a great result and a reward for hard work … but with plenty of potential for more growth.
Elsewhere in Europe you’ve established a bridgehead from which to grow. There’s enormous scope there … and also beyond Europe, where the bans on British meat are gradually lifting … freeing you to benefit from Scotland’s strong identity and reputation for food ingredients.Aberdeen Angus is so well established as the leading breed for quality in the English speaking world … that people grow up associating the best beef with Scotland.
It also helps that the whisky industry is paving the way to new markets … by raising awareness of Scotland and also the regions of Scotland.
And of course the majesty of the Scottish countryside will always be a tremendous marketing asset. Around the world, people are pushing the boundaries of traceability and transparency.
Aldi, as I’m sure you know, is a discount retailer competing strongly on price.
But in Austria, shoppers can trace every Aldi organic product back to the farm through their website. In Canada, you can trace your fish back to the boat, time and place where it was caught.
But my favourite example of transparency has to be the clothing retailer Patagonia. For every product they sell … you can look online to see a map of each stage in the supply chain.
They list the good and the bad points about the sustainability of each product … explain how they’re tackling the bad points and invite anyone to make suggestions or provide solutions.
So … you will need to keep advancing with the leaders in this field and communicating effectively.
IGD has been working with QMS over a long period to interpret consumer trends and I must pay tribute to a progressive organisation always ready to rise to the challenge.the QMS chef’s guide … the recipe books … the scotch beef and lamb website and the behind the label campaign are all excellent responses to the hunger for information.
But we can never stand still.Media and communications are evolving at an incredible pace and with such an information overload it’s difficult for anyone to achieve real breakthrough of message. It calls for creativity, adaptability and persistence ... taking advantage of social media, video, mobile devices and whatever lies ahead in the digital revolution.
This was really brought home to me last year.At the IGD convention I quoted our research saying that shoppers are strongly opposed to changes in product recipe designed to stick to a price point.
This comment was tweeted and re-tweeted around the world until it finally reached 87,000 people. That sounds quite impressive … until you compare it with the 2 million views on YouTube for the Yeo Valley rapping farmers and 6 million for the Cadbury gorilla.
Those were exceptional breakthroughs and everyone in communications wants to know how to “go viral” like this.Unfortunately, there is no magic formula … but what we can say is that communication is becoming more personal and less corporate.
So I’m delighted that QMS is using farmers so effectively as ambassadors.
Retailers and branded manufacturers around the world are increasingly posting videos online of their farmer suppliers and using them in their advertising campaigns.
That’s because farming is in tune with the spirit of our times. Our research tells us that farmers are viewed as hardworking … down to earth … professional … and vital to the future.I find farmers are usually very pleasantly surprised to discover just how staunchly they’re supported by the public!So the QMS base of farmer suppliers is a massive asset to mobilise as much as you possibly can.
Communications are also becoming more personalised and localised. Supermarket retailers are increasingly varying their range and marketing to reflect different local conditions.
And billboards are playing a bigger role again … something QMS has used to your advantage. But now for the third and final challenge presented to us by shoppers.This is to enhance the shopping experience.
The majority still view shopping for food as a chore.So anything that makes it more fun and interesting helps to get shoppers in a positive frame of mind.
That’s not so easy for you to influence … in isolation … but by working in partnership you can make a difference.
We’re going to see some dramatic changes in food stores over the next ten years as online shopping continues to grow.
Retailers will need to devise new ways to attract people away from their screens and into their stores. And there will be more space available for concessions, demonstrations and special events.
Cooking and tasting meat is great theatre.Red meat road shows or Scottish food festivals … as i know you’ve run before … could be increasingly effective in stores.
We’ll also see retailers investing in digital screens and Wi-Fi to encourage customers to use their smartphones to help them choose products.
Sainsbury’s has already tested a trolley with an iPad docking station. And in china, there are stores where when you walk past certain products, your phone springs to life and gives you a special offer.
So in future you will have new ways to influence shoppers at that critical moment when they make their choices. It will be a chance to show whatever you like … provided it’s genuinely helpful. You might deliver advice on cooking methods … alternative products … and product accompaniments.
This will take some time to unfold … but meanwhile, some lower tech ways could emerge to inform shoppers better.
So far, I’ve been focusing on supermarkets but there is a world of food retailing beyond this … and i predict a vibrant, multi-channel future.
Online, discounters, convenience stores and farmers markets have all enjoyed years of strong growth outstripping the supermarket format. And when we ask people to predict how their food shopping habits will change … they expect to spread their spending across a wider variety of outlets in future.
Most specialist butchers have now carved out a strong position … based around quality, local sourcing, exceptional service and unique specialities.It’s never been more important to communicate these strengths as people shop around for value.
It’s a compelling offer and these specialist businesses are a good bet for growth too.
And then there’s the eating out market.As you probably know, people disproportionately choose red meat when they eat out.
It’s been a tough few years for foodservice though … and the retailers have stepped in by claiming to offer restaurant quality food to consume at home. For instance Tesco finest beef has been growing at 30% per year and now represents 10% of their beef sales. Waitrose has introduced Hereford beef from a breed that grows slowly and delivers particularly well marbled meat. And Asda’s extra special pork and leek sausages, I’m pleased to say, are made using Scottish outdoor bred pork.
This is a lucrative segment of the market … although eating out, in line with the economy, will pick up again, I’m sure, and be a good source of growth in the long term.Online … discount … convenience … specialist stores and catering … each of these channels has different needs from its red meat suppliers.
There’s no time to go into the details today but IGD is here to help you better understand your retail customers … tailor your service and reap the benefits. If you’re feeling daunted about the work this might involve … do remember that red meat involves a rich diversity of businesses.
Some might grow by targeting exports … others by building on their local heritage and selling through local stores and restaurants … some by selling through farmers’ markets … others by selling to consumers online … some by working with supermarkets to grow their premium ranges … and so on.
It’s all about picking the opportunity that’s right for you … and really going for it … no holds barred … with QMS providing their invaluable umbrella of support.
In summary we are set to face extremely challenging conditions for years more to come … but we can find solutions. Consumers are asking for our assistance.
They want help with keeping to a budget … and especially with reducing waste … help to learn more about product provenance … and a more exciting store experience.
If between you … you can offer all this … then you will be rewarded … and you will enjoy growth. QMS is setting a lead.
The case for assurance is becoming even more compelling.New technologies can help … and IGD is tracking breakthroughs around the world … but also remember that most people succeed in business by doing the ordinary, extra-ordinarily well.
The Scottish red meat industry has so many strengths … fine products … a strong identity … and great potential.It’s at times like these that the best businesses and the best organisations make the fastest progress and gain the greatest advantage.
You can win ... you can grow … you can be one of the food industry’s great success stories.
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