What is in this article?:
- USDA/DOJ workshops: market fairness, transparency a must
- Meeting consumer demand
- The future
- USDA/DOJ workshops conclude.
- Antitrust concerns for DOJ.
- Panelists explain what needs to be done to ensure a vigorous agri-marketplace in 10 years.
Meeting consumer demand
Vilsack asked panelists how consumer demand impacts decisions on food marketing. “And for those of you who work, or represent, retail, processing or distribution can you walk us through how you ensure that demand is being met appropriately.”
Ben Burkett, producer with the Mississippi Association of Cooperatives, said “consumers want to know where their food comes from. Consumers are really driving the ‘know your farmer’ effort and (they) realize that buying fresh, buying local supports the local community. So, we stay in contact with grocers and supermarkets and farmers’ market so we know we’re producing what they really want.”
From the packing industry perspective, “our customers are retailers and food service companies,” said Barry Carpenter, CEO of the National Meat Association. “Our feedback on consumer demand comes through them as they place orders and come to us to develop new products.
“The message we hear loud and clear is that some things haven’t changed: consumers still want a consistent, quality product that has value. In addition, there seems to be more and more awareness of making sure you get what you’re looking for in the products.”
That’s being largely dealt with through branded products, said Carpenter. A recent study showed “that over two-thirds of the meat packages in the meat case were branded. Those brands carry a message and are intended to develop trust with the consumer.”
Retailers meet demand through forecasting based on historic models,” said Erik Lieberman, Regulatory Counsel, Food Marketing Institute. “Past performance is a key indicator. Some retailers track daily demand. … Factors considered in making decisions at the retail level include the demographics of the market, seasonality/time of month – folks tend to spend more money early in the month after they get paid – and advertising. So, you look at how consumers responded to advertising in the past, maybe a feature on the front page of a flyer. Then, you forecast accordingly.”
South Dakota cattle producer Vaughn Meyer has noticed “a 20 percent increase in certified and branded programs in the last decade. We realize that’s what the consumer is looking for.
“But, overall, I’d say the producer is having trouble understanding what the consumer wants. If you look at our cattle cycles … we’ve typically been going through a cycle of 10 to 12 years. As consumer demand decreases, you have cattle numbers following.”
Such cattle cycles are no longer so predictable, said Meyer. “Since 1996, the cattle industry has been in a liquidation phase.”
The thing that’s “really changed” in the last decade in terms of marketing “is how consumers determine value,” said Dan VincentPresident and CEO of Pacific Coast Producers. “It used to be just price. Now, it’s a combination of price/quality and, recently, food safety.”
As for the effect of consolidation, Vincent said 10 years ago “our company’s top ten accounts in retail were 50 percent of our revenue. Today, the top ten accounts are 90 percent of our revenue. In food service, it’s even more concentrated – two accounts make up 90 percent of our business.”
Consumers are becoming more and more interested in where their food is coming from,” said Christopher Waldrop, director of the Food Policy Institute, Consumer Federation of America. “That’s echoed in the interest in local, sustainable and organic food. But it’s also (the fact) that consumers want more information, period, about their food.
“Where it comes from is one issue. They also want to know food is nutritious, that it’s safe. They want more information about the ingredients and what makes up the food. Consumers are looking for a lot more information about their food – certainly, not less.”