CONSUMER DEMAND TO DICTATE FOOD INDUSTRY DIRECTION: STUDY

ROBERT VOSBURGH

NEW YORK -- The growing sophistication of consumers will drive retailers to stock more global food products over the next five years, and force an expansion of product displays, according to a new world study by Cap Gemini Ernst & Young.

While not necessarily "new" in the traditional sense of the word, the trend's strength caught the attention of the researchers, who noted consumers are subsequently becoming more demanding, desiring not only a wider assortment of items, but also greater convenience, with products in smaller portions that are easy to prepare or ready to eat.

Among the categories most facing this demand is agriculture, which is moving from a product-oriented approach, where farmers determine which products are harvested, to one that is demand-oriented, which empowers consumers to dictate what is planted, the report found.

Propelling the industry to change will be six primary consumer motivators: comfort, health, variety, individuality, enjoyment and security, researchers concluded. To that end, the report found the supply chain has responded by increasingly attempting direct consumer communication. It also sees growth as supermarkets present themselves -- and by extension select products -- as a "brand."

Retailers attempting this shift in market position will have to possess five key characteristics, according to the report:

A strong ability to focus on a single format and distinct consumer target groups;

Substantial buying power and dominant market share;

The ability to capture the imagination of the consumer beyond simple functionality;

A clearly defined character and unique differentiation;

The ability to create strong "buzz" in the marketplace.

The report, State of the Art in Food, was conducted in 19 countries over the course of one year. It includes input from 65 top executives in the food sector, including retailers from Carrefour, Delhaize, IGA, Royal Ahold, Schnuck Markets and Shaw's. Manufacturers were also interviewed for the study.