Two-Headed Consumer Demands Change from Farmers, Food Companies
A two-headed consumer strolls around today’s grocery stores, confusing both producers and retailers. One day the consumer searches out food products that are local, organic and welfare-friendly. The next week, that consumer goes down the same aisle and chooses food items that are cheap, affordable and safe.
The challenge? This two-headed consumer doesn’t behave the same way all the time.
It’s puzzling to both farmers and food companies and is causing a huge shift in what retailers buy from farmers.
“Suddenly big is bad and food companies are really struggling with that new paradigm,” says Aidan Connolly, chief executive officer of Cainthus and president of AgriTech Capital. “Before now, being big was good. You used to gain credibility by being associated with big brands.”
But that’s no longer true. Food companies are now trying to guess what consumers are looking for, tick more boxes and answer more questions than competitor companies. A new global survey on consumer expectations says consumers want farmers to be sustainable.
“Words like safe, healthy, local were words that used to come to the top of the list of what consumers wanted farmers to be,” says Emily Johannes, director of sustainability for K-Coe Isum, referencing Cargill’s survey. “Now they want us to be sustainable. They aren’t saying they want us to all be organic or all plant-based protein – this is a huge opportunity for us to be who we want to be.”
The rise of the prosumer’s perspective
Today’s consumer wants to know how their food is grown and raised. They are asking harder questions. The conversations are lasting longer. The stakes are getting higher.
“Prosumers, consumers who actively become involved with the design, production and delivery of the goods and services they consume, are leveraging the power of social media to become vocal advocates for products and brands,” Connolly says. “What they choose to consume reflects their values, aspirations and beliefs. From a company perspective it means that more and more prosumers shape, and even control, the message and drive demand – not the manufacturer.”
For example, in Australia, farmers are advertising eggs based on the water footprint of the egg (this chicken used less water than its competitor). Connolly says this is just one example of discussions about issues that were never issues before.
“You’re seeing questioning of farm practices that we’ve never had to be concerned with,” Connolly says. “On a global scale, that’s being reflected in what farmers are choosing to do.”
Farmers in Europe, the United Kingdom and Ireland are under great pressure to know their carbon footprint and to demonstrate what practices they are engaged in to reduce it.
“I don’t believe we should give in to their every whim, but we do need to interact with them. We need to find out what they want to know about us and what they are expecting from us,” Johannes says. “It’s pretty simple: Tell them what you are doing, how you are doing it and prove it.”
Where do the food companies fit in?
The consumer’s push for more sustainability in farming is forcing food companies to organize data that they have never had to pay attention to before, Johannes says. It’s no longer just about cost, companies are looking at operational data and use.
“Companies must interact with their suppliers (first and foremost farmers),” she says. “Consumers want to know what’s going on at the farm. The greatest opportunity for environmental stewardship is for companies to manage that activity. A physical four-wall plant has its impact, but not like hundreds of farmers supplying product to that plant.”
Food companies can receive an unexpected benefit from this, Johannes adds. When consumers question how farmers do things, companies can step in and evaluate practices and find answers while mitigating future challenges.
This push is also resulting in food companies adjusting their product assortments in conjunction with food retailer and foodservice company partners, says Justin Sherrard, global protein strategist for Rabobank’s Raboresearch Food and Agribusiness team.
Food companies are watching closely to where the consumer demand is growing, then determining quickly if there is an opportunity for the supply chain.
Graphic courtesy of Cargill
Do sustainability efforts make cents?
When it comes to pursuing sustainability, economics is everything, Johannes says. Sustainability is all about implementing continuous improvements in a business, so it has to make financial sense.
“Economics enables decisionmaking that we need to make a technology investment. We can’t make those decisions lightly,” she adds.
Sherrard says that technology is lacking when it comes to sustainability practices.
“We are going to see plenty of change in animal-based agriculture over the years ahead, and we need technology to be a part of that change,” he says.
Livestock producers need to consider how technology can be implemented to improve productivity, reduce labor needs, help identify potential illness in the herd/flock, improve gut health and feed efficiency, provide an optimal environment for animal comfort, reduce risk of water pollution, and more, he says.
“There is much that technology can and should do in animal-based agriculture, but I feel we are lagging too far behind crop farmers when it comes to the development and deployment of technology,” Sherrard adds.
Technology is a game changer for everyone in agriculture, Connolly says. However, there’s often a resistance to change and distrust of where that change is coming from.
“I have to agree that a lot of times it feels these things are not fair and are being pushed on us. It probably reflects the fact that consumers don’t understand farming. It’s hard to take a negative situation and see the positive, but it’s funny how often you can,” Connolly says. “Before you react negatively and say why we can’t do this, let’s think about why we could do it. In the end, is it actually good for business? Is it better for the animal, consumer, environment and people involved?”
Understanding the “S” word
A number of strategies can demonstrate a farmer’s sustainability. Johannes encourages farmers to avoid getting caught up in the mishmash of terms such as regenerative agriculture or soil health.Continue to page 2.
Thu, 12/05/2019 – 07:52
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