How to respond to the tech and trends disrupting the food industry
Baby boomer consumers may still have most of the food purchasing power in Canada, but millennials are changing the way we shop for food, cook and eat it.
That was the overarching theme of an ACA webinar delivered by Jo-Ann McArthur, president and chief strategist of Nourish Food Marketing, earlier this month.
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That, combined with other sweeping, macro-level trends, means the food industry is in the midst of profound disruption and marketers in the space need to adjust their brand strategies and tactics accordingly, said McArthur.
One of the biggest factors reshaping the food industry is the near ubiquity of technology in consumers’ lives—particularly with millennials. For instance, research shows 51% of consumers watch videos for food and drink ideas, how-tos, and recipes, 59% of those 25 to 34 cook with a smartphone or tablet nearby, and 68% of millennial moms watch videos while they are cooking, said McArthur.
At the same time, kitchens are becoming more connected and voice assistants—like Amazon’s Alexa and Google’s Home—have become the latest must-have technology. “This should cause concern for brands because when a consumer shouts an order for milk across the kitchen, who is deciding which brand to choose,” asked McArthur.
Marketers need to ensure their website is optimized for voice search and start doing more voice SEO, she said.
Similarly, blockchain is a super-hot topic and it too could affect the food industry. Consumers care more and more about where their food comes from and what was involved in bringing it to store shelves, said McArthur. “It used to be that consumers wanted to know, now they think they have a right to know.” And they expect that with technology they should be able to trace the entire journey of food along the supply chain and validate whatever health claims are made. Blockchain, which has transparency as its defining attribute, will make this even more possible than it is today. Look for big food players to adopt blockchain-based processes and other traceability measures to demonstrate to their customers that they have nothing to hide.
And finally, with e-commerce gaining popularity, the food retail industry has been focused on online shopping, though the market remains relatively underdeveloped in Canada, accounting for just 2% to 3% of sales.
Amazon’s acquisition of Whole Foods is a “game-changer,” she said and Nielsen in the U.S. forecasts online to account for 20% of the market by 2025. We’re also seeing new iterations and options starting to emerge, from in-store to curb-side pickup, to delivery services that will put the groceries into fridges and pantries for the customer. “Creepy maybe, but in the world of the connected home this is a reality,” she said.
Here are just a few more points McArthur served up during her presentation.
- Make it easy: Only 10% of adults love to cook from scratch now and they spend more money eating out than on groceries. “Meals are less planned than marketers think,” said McArthur. On weekdays consumers spend 30 minutes or less planning meals, 56% of dinner decisions are made the day of and 20% decide what to eat when they open the fridge. “This is all about how exhausted people are at the end of the day,” she said. Food marketers need to think about ways to give their consumers easy solutions to good meals.
- It’s snack time: “We no longer eat three squares a day, yet a lot of marketers still plan that way,” said McArthur. Today, breakfast represents just 11% of eating occasions, lunch 10% and dinner 11% with snacks and beverages making up the rest. “We have seen snacks move from guilty pleasure to a meal replacer,” she said. Marketers need to think about ways to make their food products more portable and snackable.
This is an edited version of an article written for the Association of Canadian Advertisers. Click here to view the full report.