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Last week it was announced that there would be a government review into the food supply chain following the horsemeat crisis. The investigation is being led by Prof Chris Elliott of Belfast’s Queens University, who claims more needs to be done to ensure people know exactly what they are eating and where it originates from. Going further, Elliott claims recent statistics suggest only 60% of people now trust major retailers’ products.
With the Easter holidays coming up, planning meals and stocking up on food presents a new challenge – balancing the need for healthy, nutritious meals, without draining too much time or disrupting holiday plans. The Easter holidays can come round somewhat abruptly and rock the boat for parents reliant on the routine of the school year. However, while planning for the break can be stressful, retailers can play their part by lending a helping hand to parents around the country.
It’s once again the time when wayward offspring around the country look to try and gain favour with their matriarch, remembering to be considerate on at least one day a year. This presents a great opportunity for retailers and manufacturers to expand much needed margins through promotions and products specifically geared towards Mother’s Day; and private label can provide great ways of tempting customers.
Recently, food tests run by Leicester City Council found that over half of all the meat samples they tested contained the DNA of other animals not labelled on the packaging. This comes hot on the heels of similar food tests run in West Yorkshire, which found that a third of food products had been mislabelled.
According to the Soil Association, sales of organic products in the UK showed “a decisive return to growth after four years of contraction.” Indeed, the growth is ahead of the trend shown by groceries in general: jumping 2.8% as opposed to 2.1%. With organic sales up again this January, compared to a 3.2% drop for grocery sales, it looks like the market could be in for another boom year.
According to the BRC, UK retail sales were down 1.0% on a like-for-like basis from February 2013, showing consumer confidence is still recovering from the recession and retailers are not out of the woods yet. When profits are being squeezed, retailers look to improve efficiency and reduce overheads, but they have overlooked an important area – own label product development. Creating products for the retail market has been particularly inefficient and time-consuming. With the average product specification manager traditionally managing hundreds of lists of paper based product specifications, making even minor changes meant going through reams of papers and epic excel documents. The problem is this inherent inefficiency has slowed the process and hindered the route of new products to market. Luckily, there is now a solution.
At the moment, news on whether the recession is easing off is mixed. In December the Office of National Statistics showed an increase in retail sales of 5.3% against the equivalent figures for 2012, the fastest increase in sales in over 9 years. However, February showed a 1% drop against 2013’s figures: showing that we may not be out of the woods yet. The simple fact is that a changing populace, the rise of online shopping, increases in property prices and the continued growth of out-of-town superstores are all combining to pressure retailers. Notable casualties have already included Tie Rack and Blockbuster. In order to survive, and adapt to this brave new world, retailers and suppliers need two things: knowledge of what consumers want and need; and the ability to collaborate and actually provide it.
The EU is bringing the Food Information Regulation (FIR) into effect in December 2014, which will change the way that food products will have to be labelled. It will set new requirements such as mandating a minimum size of fonts, highlighting potential allergens, and the compulsory origin labelling of unprocessed meat from pigs, sheep, goats and poultry. While Trading Standards has recently said that it will be taking a proportional view with the way it enforces the new regulations, retailers and manufacturers will need to act now to prepare for when the changes take effect.
The growth of own-label products has, in turn, given retailers greater opportunity to capitalise on seasonal events such as Easter, Christmas, Valentine’s Day and, seasonally, Pancake Day. Offering prospective flippers a full range of flour, eggs, lemon juice or even ready-made crepes for some has been a consistent revenue stream for many years. However, smart retailers can go much further; beyond simply adding own-label alternatives to the Pancake Day classics.
Cases such as the last decade’s Sudan-1 contamination and the more recent horsemeat investigation show that the food industry still has an acute problem with locating problems at source and finding which parties are accountable. While both of these previous cases were caused by criminal individuals, from a consumer perspective the whole industry is at fault: meaning the longer it takes to locate the source of the problem, the greater the damage caused to consumer trust.
Consumer Confidence Index, consumer confidence is at a seven year high, and retailers are well placed to seize this opportunity because of the unique relationship they have with the customer. However, consumer trust is a delicate thing: hard to gain and very easy to lose. For any business, your customers need to have confidence in your ability to perform well and believe that you have their best interests at heart; and this is especially true in the food industry. While product scares around E. coli and botulism have led to product recalls and even loss of life, at no time has consumer trust been hit harder than after the 2013 horsemeat crisis.
Last year, Halloween delivered £325m in sales in the UK and $6.9 billion in sales in the US – retailers and suppliers will be keen to exploit the period’s growing potential this month. There are a number of important steps that retailers and manufacturers can take during Halloween to innovate in private label products, engage with consumers, and make the most of this multi-million pound opportunity.
Consumers are now demanding more information than ever. The growth of the internet and the spread of mobile devices mean that information on almost any subject is at our fingertips. This is revolutionising the way that people work, play and shop. we are entering an “Age of Disruption,” where retailers that deliver a customised experience to consumers across all devices will be the most successful.
The last week of June saw the arrival of The Consumer Goods Forum Global Summit in New York, where Trace One was in attendance along with some of the biggest names in the food and drink industry. One of the main themes discussed was the importance of consumer trust within the industry, and why retailers...