At the annual Food Marketing Institute (FMI) conference, held in my home town of Dallas April 30-May 3, I recognized more than ever how much of the food industry relies on packaging – just as much as processing.
I’ll note that the event featured excellent presentations from Lynn Dornblaser, the director of CPG Trend Insight for Mintel International Group Ltd.; the inimitable Harry Blazer, chief industry analyst for the NPD Group; and Leslie Sarasin, Esq., FMI’s president and CEO.
Of the many intriguing points covered collectively in their sessions, one big take-away is, there’s an elephant in the room when it comes to the evolution of how the product you make gets into consumer hands, that of electronic media. Shoppers are using every tool to lower grocery bills and one of the most effective is digital technology. The Internet and social media have subsequently carved deep inroads into the food-purchasing experience. All this is bringing packaging to the forefront as never before.
The importance of the packaging factor doubles when you consider the creative advancements food safety and convenience have driven in packaging technology in order to serve an increasingly on-the-go consumer.
If you’ve ignored the impact social/electronic media have had on food shopping, now’s the time to get up to speed. Because very soon, that’s how a large percentage of the products you make will be sold. And it won’t mean merely snapping a jpeg of your product to post. Two ways consumers will purchase your product: Via direct online purchase (whether singly or in a large order, Peapod style), or via the stimulus of seeing it, reading about it and, likely, even printing out a coupon for it.
Major growth areas in consumer integration of technology and grocery shopping include: full-order grocery shopping (both for home delivery and pick-up); recipe searches and shopping lists; online coupons; and comparison shopping. The number of consumers using tech such as smart phones and iPads to shop also is increasing. In some non-grocery categories—health, beauty and clothing—the number of dollars spent online is poised to exceed, or has already exceeded, dollars spent in brick & mortar stores.
The concept of point-of-purchase hasn’t changed, but a turn-off can head it off at the pass while an attractive come-on can make it suddenly visible. When translated to online presence, such attraction can even overcome unfavorable shelf-space allocation in the stores. And formulation changes are very likely come into play. Think of calorie content and that alluring “100-calorie” badge. Making sure your corn chip snacks are GMO-free is another example of changing a formulation to appeal to a social media-attentive audience and drive customers to find you among the dozens of choices that face them in the store. The visual of the packaging catches their eye, the message on the landing page and package itself attracts them, the coupon brings them to you—by the time they enter the store, they’ve already bought your product in their mind.
So what are consumers looking for? Lots of things, but one big heads-up for processors is that “Green is growing again”—“again” because the recession we’ve been in put an economic squeeze on sales of green/sustainable/fair trade/organic/etc. But in fairness, all it did for these channels was pull 30 years of double-digit growth down to single-digits for a couple of years. That somehow gave an impression of a stall. (I guess if your Ferrari can’t get over 130 MPH that does pale in comparison to its usual 160. Yet it’s still blowing by everything on the road.)
Most marketers and retailers are aware the green/sustainable/fair trade/organic/etc. appellation is a major consumer demand, and a permanent demand at that. It’s not a fad; it’s not going away. It might slow or pause now and again, but for consumers, it’s another return on expenditure in the form of added value. The cost of creating product that fits these channels has lowered—demand has driven supply and consequently lowered prices of ingredients—but people are looking for those labels on the product and if yours doesn’t have it while a similar product does, you lose out. This paradigm also proves true even if that competing item is slightly more costly.
This would be a good time for food and beverage processors to ask themselves the following three questions:
1) How many customers encounter or even purchase your product online?
2) How do those numbers compare to last year?
3) Why don’t you know the answers to these questions?
PS: Just as I was going to press with this, a friend of mine, Phil Lempert, posted a great video clip on the same topic:
Enjoy!
