Saunders: Complexity grows for consumer demand in U.S. and globallyWritten by Natasha Wheeler
Fort Collins, Colo. – “When we look at value differentiation today, we have two primary drivers. We have a complex consumer demand, and we have global competition,” stated Leann Saunders, president and founder of Where Food Comes From.
Where Food Comes From is a company that works with third-party verification programs to help producers sell their products through value-added marketing. Saunders shared some of her insight into current consumer trends at the International Livestock Forum in Fort Collins, Colo. on Jan. 9.
“We have an extremely complex consumer that restaurants and retailers are trying to address. They say they want food to be healthier, but they want it to be cheaper. They want cleaner labels, but they don’t want to be charged any more,” Saunders explained.
Looking at a McDonald’s menu provides a good example of the variety that consumers are looking for, she said. Twenty years ago, a Big Mac was a burger with special sauce, lettuce, cheese, pickles and onions on a sesame seed bun.
“Ten years later, consumer feedback said people wanted it without pickles or without lettuce or without the Big Mac sauce. Today, McDonald’s is opening up store concepts for build-your-own burgers. That shows the transformation in 20 years of consumers wanting things their own way,” she described.
Similar trends in the United States are also seen across the globe, and a wide variety of consumers are looking for products that suit their needs.
“In every single country, there is a consumer who wants the product delivered to them at the lowest price possible. If we are going to feed the people that we’re going to need to feed over the next 50 to 100 years, we are going to have to use whatever we can to bring those people food at the prices they can afford,” she noted.
On the other hand, there is also a segment of consumers that Saunders referred to as the elitist influencer segment that drives a lot of the changes seen in value-added marketing.
“It’s all about consumer choice,” she remarked.
In China, by the year 2020, the luxury consumer base is expected to expand from 80 million people to 180 million people. That market will have global impacts from consumers who are seeking individualized products.
“The balance of the international consumer and the domestic consumer is so important,” Saunders explained.
For example, a beef tongue sold in the United States translates to an eight-dollar-per-head premium if that same product is exported to Japan. Livers bring a four-dollar premium when they are exported to Egypt, and many other products are exported for a premium as well.
“Being global in our outlook on consumers is critical because it allows our industry to access and sell parts and pieces to where it makes the most sense to optimize value,” she noted.
Between global markets and personalized customer demands, the variety within products continues to grow.
“If we ask food producers today what they’re faced with, it’s increased complexity,” she added.
Research shows that millennials read packaging labels and are more concerned with issues, such as ingredients, genetically modified foods and organic products, than their parents or grandparents have ever been.
Yet, Saunders also said, “Globally, 63 percent of consumers are skeptical about food health claims.”
Another challenge the industry faces is the consumer perception of science. Studies show that many consumers trust their friends and social media more than good science, further complicating the issues.
“We have to continue to figure out ways to convey the messages of science in a way that’s more acceptable,” Saunders remarked. “We have to communicate in a way that resonates with consumers’ personal values.”
Consumers are hungry for information. They want to know where their food comes from and how it is produced.
Yet, Saunders warned, “There is a difference between science and consumer-accepted science. There is a sweet spot between sound science and the science that our consumers are willing to accept.”
Connecting with consumers will continue to be a challenge in the food industry, but Saunders believes that by working together, producers, retailers, restaurants and other industry representatives can convey the good things that are happening.
“If we are authentic about sharing information in a way the consumer can understand, they will eat it up. It’s not just the elitist mom who shops at Whole Foods,” she said, explaining that everyone wants the best for their families. “The moms who shop at Whole Foods and the moms who shop at Walmart ask the same questions.”
Saunders added, “We need to be open, honest and transparent into the future.”