By Mr Jayanta Roy
The COVID pandemic has delivered the biggest and broadest value chain shock in recent memory. It is clear that the lockdown has had a profound impact on how people live.
During lockdown, the home has become a focal point. It’s where we work, eat, play, and connect with our families and friends. We saw the rise of the at-home occasion, as people were restricted in their movement. They actually found, probably to their surprise that they like spending time at home, cooking for themselves. Obviously, there will be some changes shortly. People will go out again. They will go to malls. But I do think that the affinity for the at-home occasion has risen and that companies will need to really be very thoughtful about how they tackle the different at-home occasions in order to continue to be successful going forward. Quick-fix meals, do-it-yourself meal kits, packaged foods and ready to eat products have seen a huge and sustained uptick in demand during the lockdown. Even as overall consumption has declined, the portion allocated for at-home categories has climbed. What we buy has changed across categories.
In a post-pandemic world, this challenge of anticipating consumers’ needs, and measuring and managing innovation to address those needs, is likely to get tougher as a result of massive, lasting behavioral disruption across consumers, categories, and channels. Consumers are placing greater priority on necessities, seeking larger sizes, shelf-stable and easy-to-prepare products, as well as products that deliver a higher value. They’re shifting their shopping behavior to online and direct-to-consumer channels. Changes in disposable income and consumer attitudes increasingly favor brands that stand for trust, safety, health, and value.
Consumers are being mindful about their spending and trading down to less expensive products. Many consumers have tried a different brand or shopped at a different retailer during the crisis. Value, availability, and quality or organic products were the main drivers for consumers trying a different brand. Consumers buy more from companies and brands that have healthy and hygienic packaging and demonstrate care and concern for employees. Consumers are more focused on their own health & well-being including mental & emotional health and will continue to prefer new preventive healthcare measures. Surge in e-commerce, strong preference for global A-brands, more staple foods etc. are the few trends being observed though overall consumption continue to decline.
Innovation will be more important than ever as we move toward the next normal given changing consumer needs and occasions. Companies can rethink their innovation agendas to more efficiently address those needs and drive growth. Many are acting decisively to adjust assortment, fill product gaps, evolve price pack architecture, adjust promotional activity, and increase omnichannel presence. This outbreak has really put into stark perspective how important it is to have a resilient and agile supply chain. Companies should take this moment to derisk their supply chain. If it’s single source, for instance, in a fairly volatile area, now is the time to find multiple sources of supply. And it’s also about increased localization and regionalization of their supply chains.
The world’s population is growing and there is increasing pressure on precious resources such as land, water and energy. At the same time there is often great fluctuation in terms of price, quality, quantity and seasonal variation of raw materials leading to instability of ingredient supply for the foods and beverages people love.
For example, Companies are under pressure to reduce their water usage because of mounting water scarcity. According to U.N. projections, the world will face a 40% freshwater shortfall by 2030 if nothing changes. This is a growing issue for corporate water users, who consume more than 40% of all water used in industrialized economies and an increasing share in developing nations.
The share of the world’s population currently living in urban settings is unprecedented in human history. Africa and Asia regions are urbanizing faster than others. Urban dwellers tend to value, and to pay for, convenience foods more than their rural counterparts. Furthermore, urban residents are also more exposed to highly processed and non-traditional foods than rural populations through ready access to food retail outlets, street vendors (particularly in poorer areas) and marketing campaigns.
Many recent reports during pre-Covid times highlighted the changing patterns of meal provision and a large influence of advertising on shaping food habits. For many urban families, one to two meals per day are eaten outside the home. For many children this means the majority of meals are consumed at school or day care centers. Lot of urban Indians are suffering from obesity, underweight, anemia, hair loss problems and osteoporosis. The growth among children is also imbalanced.
Today’s teenagers are growing up as a sustainability-aware generation. They are concerned about Climate change, Animal welfare, Food Ethics, Packaging disposal/recycling etc. The current group of Generation Z /teenagers are our new age customers, very large group of customers who are well informed and more value & ethics driven. They can influence their friends and families and the whole ecosystem much faster.
The emphasis, during the pandemic, on health and hygiene that has led to an increase in single-use plastic, reversed some of the preexisting focus on sustainability.
New age customers are seeking better “customer experience” as they are less formal in food service format from pre-Covid times. They like “special care” from the responsible companies who put in efforts to make them more mentally & emotionally strong and keep them productively engaged in social & environmental conversations. This trend has intensified during pandemic.
New-age entrepreneurs and professional product developers in food processing industry never accept the status quo, and constantly push themselves to test the limits of today—and realize the promise of tomorrow. They constantly evolve and adapt to rapidly shifting consumer preferences and customer demands.
Deep understanding of “Customer Experience” and “User Experience” Journey are more important now for R&D and Marketeers. For example, food brands, developing life style focused products in more localized flavors, is the way forward. Whey protein sells in home grown local flavors such as masala doodh flavors, kesar kulfi flavors, chocolate brownies, strawberry creams, vanilla, banana etc. DIY Protein Dosa, made with soy protein isolate powder will be another example.
Coordination between agriculture, education, health and nutrition is essential in this arena to provide favorable environments and appropriate messages for maintaining or recreating healthy food cultures. Collaborative ecosystem is the need of the hour in the food processing industry. New Technologies need to be developed collaboratively to maintain a balance between growing market demands and what nature can provide.
As a true industry partner, the food product development fraternity should be on a mission to offer customized taste solutions that comply with consumer demand for less salt, fat and sugar, and less meat and other reformulations. While health is a driver for today’s consumer, no one is going to change their ways of eating if they don’t find their food enjoyable.
The informal food sector is vital for meeting the dietary needs of many urban dwellers – particularly the urban poor in India, inspite of current low demand in HoReCa sector and the street foods due to consumers’ fear and anxiety and reverse migration of urban workers. Rather than penalizing or seeking to eliminate it, measures are needed to improve the street food sector in order to better address sanitation and health risks. Investment in the education of consumers about healthier food choices and reconnecting with our Indian traditional cuisines is essential.
India’s “vocal for local” initiative where the idea is to promote local sourcing and local manufacturing, local brands and local supply chain ensuring global quality standards, will further boost the morale of our Food professionals.
Food professionals clearly should have a lot of knowledge and practical insights to develop winning authentic food formats with a sense of sustainability that our business can use to capture the opportunities in today’s and tomorrow’s market.
The author is the founder & principal consultant at JRMC Global and can be reached at firstname.lastname@example.org