SN's first-time Power 50 list recognizes individuals who currently have extraordinary influence on the food industry. This roster includes retailers, manufacturers,
association executives and government officials, among others. It was developed with a great deal of industry input, including an overwhelming response to our online call for nominations. SN editors considered those nominations and extensive feedback from scores of industry executives in compiling this list. The 50 power players are ranked according to degree of influence, with the consumer appearing first, then all retailers and wholesalers, then manufacturers and so on. For more
information on the methodology, see David Orgel's column on Page 10.
1) THE AMERICAN CONSUMER
The customers who influence and inspire the industry
WHY: They set the rules.
WHAT'S NEXT: Anything they want.
The consumer: elusive, fickle, insatiable.
Full of contradicting demands, consumers want quality for a low price; healthy food that tastes good; and home-cooked flavors that are convenient.
What's an industry to do?
As the ultimate end user in the food industry, the consumer holds the ultimate power. Last year, consumers spent more than $400 billion in supermarkets, according to the Food Marketing Institute. Manufacturers, retailers and their industry partners could spend that much and still have a tough time trying to figure out what motivate shoppers in the store environment.
"It's a situation where you never win because the consumer keeps changing," said John Carlson, a partner at Cannondale Associates, a Wilton, Conn.-based market research firm.
To be sure, the job is becoming more difficult as new store formats, ethnic groups and food philosophies enter the picture. Shifts in population, age and income constantly stir the formulas that have been developed to track buying habits.
As consumer behavior has become more sophisticated, so have the ways of tracking it. But it's only recently that the industry has realized who has the final say. Not too long ago, business models still named the retailer as the end user, analysts said.
"The problem is that the industry focused solely on investing its energies on ways to win the customer, not the consumer," said Steve Lutz, executive vice president of The Perishables Group, a Chicago-based marketing research firm specializing in fresh foods.
Each link in the supply chain brings its own strengths in the ongoing effort to know who buys what. Manufacturers tend to be good at understanding consumer attitudes and product usage. Retailers know what sells. Yet the industry still has critical gaps in coverage, most notably in that grey area of purchase behavior, or how consumers shop the store.
Indeed, supply chain partners are no longer interested solely in selling cases -- they want to know specifically who is buying. For example, knowing whether it's a repeat customer or a crossover consumer from another brand has become a critical component of long-term strategies manufacturers and retailers are trying to develop in increasing their market share, observers said.
"You have to know how they're acting when they go down the aisle, what they're buying together, and how they make purchases," said Carlson. "Knowing that helps retailers generate store loyalty and manufacturers generate additional sales."
The renewed focus on putting the consumer back at the heart of the sales equation has all supply chain players looking hard at the nuts-and-bolts, tactical execution of the sale. One bright spot for the industry is the increasing reliance on elaborate tracking methods that provide a clearer picture of what shoppers are doing, and how they're doing it.
The tools range from the high-tech frequent shopper card programs that shadow purchase behavior and have the potential to tailor incentives to individual consumers, to the low-tech use of revolving focus groups that meet to discuss their shopping preferences. There has been an increase in the use of in-store consumer intercepts, where shoppers are interviewed as they're selecting a particular item at the point of purchase.
There are some who might feel all the numbers and statistics are not worth the effort, that the art -- and science -- of the sale is best handled in a forthright manner that simply respects the customer. In the words of Sam Walton, Wal-Mart's founder:
"Exceed your customers' expectations. If you do, they'll come back over and over. Give them what they want -- and a little more. Let them know you appreciate them. Make good on all your mistakes, and don't make excuses -- apologize. Stand behind everything you do. The two most important words I ever wrote were on that first Wal-Mart sign, 'Satisfaction Guaranteed.' They're still up there, and they have made all the difference."
