Food industry in search of the consumer
20 October 2017
Internet, the call for transparency and product information are turning the food industry upside down. The relatively simple set-up of information and supply channels can help food manufacturers to take true control of their processes and expand their profit margin.
Food is not only a first need, consumers are making more conscious choices in what they eat. Organic food and fair trade products are gaining ground and we want to know where our meal comes from and what ingredients are used in its preparation.
At the same time, it is anticipated that domestic demand for food will show only modest growth. On the other hand, online delivery of food will grow exponentially in years to come. Rabobank expects that a quarter of all shopping will be done online in The Netherlands by 2030. It goes without saying that food producers cannot ignore these trends. Reaching the consumer better through an omnichannel
Every food manufacturer wants to increase margin. That can be achieved by implementing more efficient production and logistics processes, but also by presenting oneself more as a business-to-consumer entrepreneur. It is increasingly important to distinguish oneself from the competition by determining and serving your target group to the best of your ability. The opportunities offered by omnichannel (including e-commerce for example) enable food manufacturers to approach their target audiences in an accessible, more targeted and less expensive manner. Problem is that food manufacturers often do not have the required data at their disposal. The retailers do. So the ultimate challenge is how to reach the end-consumer better.
A consumer website is crucial
A digital channel is therefore an absolute must. A digital portal for supply to wholesalers and retailers - automated or otherwise - is becoming increasingly common. If companies do not have such a site at their disposal, they can kill two birds with one stone by developing a website that reaches out to consumers as well. It's a good idea to set that process into motion. First, food manufacturers can optimise their business-to-business ordering process. Second, consumers can be informed where the product comes from, how it is made and with which ingredients. Third, consumers can become acquainted with other products offered by the manufacturer.
Wider margin thanks to a surcharge
In addition, a website offers the opportunity to build the brand by profiling it as a niche player with the accompanying brand perception. E-commerce offers the manufacturer a testing ground for training in direct sales to the end-customer. Last but not least, manufacturers finally gain access to customer data for marketing purposes as well as the extra margin they were looking for. This brings with it a broader range of tasks including direct customer contact, returns, marketing and a more complex logistics process.
Various delivery channels
We are seeing that this is helping more and more manufacturers to sell directly to consumers through websites and social media. In order not to disrupt the relationship with retailers, products made by this food manufacturer are sold under another brand name than the one on the retailer's shelves. The choice is between having the products picked up at existing delivery points or shipping them by post, but also through the start-up and development of specialty stores. The food sector is currently at the dawn of the digital revolution. There are many roads that lead to the consumer, and an increasing number are part of the digital highway. Don't forget to think about an e-commerce strategy, otherwise you may miss the exit to higher margins.