Kinsa Group Blog

One of the only constants in our industry is change.  How will your business adapt to changes in consumer buying habits?  How will the radical changes that occurred in 2009 impact the future of your organization?

Tony Perazzo, a partner in the San Francisco office of Grant Thornton, LLP, recently contributed his thoughts on the new ways food and beverage industry organizations will be doing business in 2010 and beyond.  Here are his article’s highlights:

• The economy has dramatically changed the way people shop.  Consumers are looking to spend less, making price and value key priorities.  Private label SKUs are becoming more profitable, forcing many retailers to reduce the number of SKUs across the board.  Offering fewer SKUs lowers carrying costs, reduces the likelihood of shortages, and gives retailers more leverage to “squeeze” vendors.
• The recession will likely have a lasting impact on how consumers spend their grocery money.  Price and value lessons will stay with shoppers long-term, fueling the demand for private label products.
• Private labelers, contract manufacturers and even retailers will need to pursue aggressive and novel product development to compete for shelf space.
• Smaller brands and emerging food and beverage companies will have unique opportunities to partner with retailers in producing private label products, and create innovative and higher-value product offerings.  Those companies that best capitalize on emerging consumer trends will win the battle.
• Emerging and middle-market companies should focus on: regaining access to credit to keep pace with product development; streamlining operations; and enhancing operating efficiency.
• Bottom line, higher-value, less expensive product offerings are here to stay.  As a result, innovation, efficiency and strong relationships should be key priorities for food and beverage industry companies.

To view the entire article, follow this link to Food Industry 2010:  Priorities for the New Decade.

Kinsa Group can help you quickly and cost-effectively access the talented professionals your organization needs to capitalize on these trends.  Please visit our website to find out what we can do for you.

It’s 2010 – time to flip the calendar, wipe the slate clean, and take a look ahead.  

To help you start off the new decade right, here is a summary of some of the biggest issues likely to impact the food and beverage industry this year:

1. Increased Regulations.  The food safety bill means increased inspections of domestic food facililties and greater oversight of imports.  The proposed legislation will give the FDA enhanced authority to oversee the safety of our nation’s food supply.
2. Labeling Changes.  To ensure consumers are not confused or misled by symbols used in front-of-package and shelf labeling, the FDA is drafting new legislation for simpler labeling.  The proposed changes would require food companies to use new, consistent labels clearly defining nutritional criteria.
3. Advertising Scrutiny.  The Federal Trade Commission is scrutinizing the claims made by cereal and other food and beverage products marketed to children.  This issue continues to gain momentum as the Democrat-controlled Congress becomes more involved and Internet-connected moms speak out.
4. Consumer Skepticism.  According to a new IBM survey, less than 20% of consumers trust food companies to develop and sell safe and healthy food products.  Sixty percent question the safety of the food they purchase, and nearly half have changed shopping behavior to access fresher or better quality foods.
5. Waging War on Obesity.  Trust for America’s Health and the Robert Wood Johnson Foundation released a report identifying several recommendations to make preventing and reducing obesity a central component of health reform.  The report called for a “National Strategy to Combat Obesity,” which would define government’s role, and promote collaboration among businesses, communities, schools, and families. 

   To that end, the Healthy Weight Commitment Foundation has committed to a national, multi-year effort to help reduce obesity by 2015.  The plan will promote “energy balance” (calories consumed equalling calories expended).  For the food and beverage industry, supporting this initiative translates into product reformulation and innovation, providing smaller portions, redesigning packaging and labeling, placing calorie information on the front of products, consumer education, and in-store promotion.

6. Soda Tax.  Although a recent Yale School of Public Health study found that soda taxes have not made a difference in BMI over a 16-year period, California legislators are considering higher soda taxes as a way to curb obesity.  According to a UCLA study, adults who drink soda daily are 27% more likely to be obese.  But critics of the tax say that focusing on soft drinks will not solve the problem, citing the same UCLA study which also showed that half of adults who don’t drink soda are also overweight.

   Kelly Brownell, Director of the Rudd Center at Yale, compared the soda industry lanscape to the tobacco industry’s years ago, when governments began to increase cigarette taxes as a way to get people to quit smoking.

We’d Like to Hear From You

What are the most important issues or trends likely to affect your business in 2010?  We’d like to know.  You may leave your comment below, or contact us directly on our website.

To read the full food and beverage industry trends article by Diane Toops, visit FoodProcessing.com.