“Selfish” Consumers & Ruthless Competition: Cause and Effect of Today’s Unpredictable Food Landscape
At home, at quick serve restaurants and fine dining establishments, Americans are changing the way we eat. Local, fresh and organic food and farm-to-table dining experiences are all the rage.
After decades of shifting government nutrition advice, a tsunami of conflicting studies about food ingredients and their connection to health problems or benefits, many consumers are confused and weary and seek to take control of what they buy and what they eat. America’s food experience is evolving at a dizzying pace. Some – like celebrity chef Jamie Oliver – call it a food revolution.
But what about the majority of consumers who are satisfied with their food options at the store and away from home? Research continues to support the notion that price, taste and convenience are still the prime drivers for the majority of consumers.
If you are in the business of food, this is an unsettling time. Trying to decipher consumer attitudes and preferences in America (and globally) today has proved a very difficult proposition.
Why has reading consumer tea leaves become so difficult? In American society, we have been trained to categorize and classify things into nice, neat and actionable categories. That is what opinion researchers do, that is what marketing people do and that is what C-suite executives do.
Unfortunately, the changes in our food culture don’t fit neatly into actionable categories. Nor are we experiencing a food revolution. Yes, desire for change unifies those seeking revolution, but those seeking change generally want the same outcome.
The changes in our food culture meet the fist litmus test of revolution. Research shows that 70-80% of consumers say they buy at least some organic food, a proxy for their dissatisfaction and desire for change. Where the revolution theory falls short is the second litmus test – unity around a common outcome. One look at today’s food environment shows consumers do not want to replace the current food system with a different one.
What they want is control over their food destiny. Food destiny is a fancy term, but what it really means is consumers are establishing a culture of selfishness when it comes to their food. A nicer way of describing consumer selfishness is “customization.”
Most of us have witnessed this phenomenon when dining out. Just stand back and watch customers at Chipotle lean ominously over the glass and direct the server behind the counter how to construct their burrito or bowl in excruciating detail. At restaurants, I marvel at the skill of wait staff that patiently answer an endless list of questions about how their food was grown and prepared and where it comes from in an effort to satisfy a seemingly unquenchable consumer thirst for information and customization.
That is not a food revolution – rather we have entered a new era of “The Selfish Consumer.” In the new era, consumers want individually tailored food at home and away from home and many are willing to pay more for it.
There are two major challenges for food companies in capitalizing on the age of selfish consumers. First, they need to distinguish fad from real change, which is not easy to do in today’s society. Second, they must understand the impact of a proliferated supply chain on their business model.
The benefits of the modern food system are derived from scale and efficiency. When selfish consumers demand customization and more choices, food companies and farmers must segment their offerings to meet the challenge. And segmentation can lead to higher prices or shortages (like the current egg shortage or Chipotle’s shortage of carnitas).
If consumers are willing to pay more for food that meets their selfish needs and is produced in keeping with their philosophical beliefs, that is just fine with food companies because they can cover the costs of a proliferated value chain and potentially increase profits at the same time. If consumers are too fickle, change their minds too often or balk at the higher cost of customized food, then all bets are off.
Food companies – large and small – pride themselves on understanding the needs and preferences of their consumers and adapting quickly to give consumers what they want. The problem is consumer attitudes are shifting so quickly and new micro-cohorts are forming every day that food companies are having difficulty keeping pace.
The net effect is that the food sector – a ruthlessly competitive marketplace already – is becoming a battle for the survival of the fittest, where companies that solve the consumer puzzle will thrive and those that don’t may find themselves on the ash heap of history.
Sean McBride, Founder of DSM Strategic Communications, is former Executive Vice President of Communications & Membership Services at the Grocery Manufacturers Association, and former Director of Communications at the American Beverage Association