Saturday, December 9, 2023

Price and provenance tensions pull at producers

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Affordability trumps, but does not replace, sustainability, says food marketing trends expert.
David ‘Dr Food’ Hughes says there is some leeway for producers on sustainability criteria as long as consumers ‘can see us trying’.
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More and more consumers have concerns about the sustainability of the food they eat, but economic conditions right now mean many can’t afford to act on them.

David “Dr Food” Hughes, Emeritus Professor of Food Marketing at Imperial College London, told the Primary Industries Summit that global consumers are looking for transparent food systems, low carbon impact, responsible water use and efforts to reduce waste.

“As long as they can see us trying, we have leeway,” he said.

The issue for food producers is that gaining any value from these demands is difficult, as fierce competition among retailers in the United Kingdom and European Union keeps prices low on staple food items.

He said Tesco is facing steep competition from retailers like Aldi, which means staple items are being heavily discounted.

“There’s a squeeze on margins for everyone in the supply chain.”

This has led to a price hierarchy on the supermarket shelves, with high-quality products being priced out of the range of many people.

For example, a rack of lamb at Waitrose is selling for $90/kg at the moment.

“When a hearse goes by, I think ‘There goes another lamb consumer.’”

One area of hope for food producers is the changing habits in the post-covid world.

With meal deliveries and kits growing in popularity, Hughes said there is an opening for well-branded, nutritious products to find a niche on the dinner tables of the world.

“Shopping has changed, with the rise of online shopping and delivery. Eating at home is changing – meal kits and having restaurant food delivered is far more common now.

“Nobody buys ingredients – they buy components or the meal itself.”

Supermarkets are adapting as well. At Tesco the aisle labels advertised lunch at home, takeaway and ready meals rather than specific food items.

“Meat struggles to come up with consumer propositions that match this,” Hughes said.

While younger consumers are driving many trends, governments are also forcing changes to eating habits.

“Governments will interfere with our diets because they can’t afford the health costs of obesity.”

Demographic changes will also be important to keep an eye on in the future, Hughes said.

“We expect to see another 2 billion people over next 30 years and 1.5 billion will be Hindu or Muslim and they have different diets.

“Populations in the EU, UK and Asia will decline over next 20 years.”

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