Winning With Big Food: Part 1

‘How can ‘Big Food’ win?’ was a question on everyone’s mind at this year’s Iconosphere conference in Las Vegas. As one of the industry’s leading consumer insights conferences, hosted by Gartner (formerly CEB), food & beverage strategists reiterated arguably the biggest challenge ‘Big Food’ faces in today’s marketplace: small and medium manufacturers are driving half the growth in the CPG channel.

Smallest Manufacturers are Driving More than Half of Growth in CPG

2017 The Nielsen Company (US), LLC

Even though this data only represents retail data, we can’t ignore that changing customer demands in one channel aren’t influencing product decisions across foodservice, or even food at retail.

WHY IT’S HAPPENING

Most analysts agree small and medium brands’ ability to respond to rapidly shifting trends, their focus on ‘clean’ ingredients, and increased availability have largely contributed to their success.  

These explanations highlight a common theme: ‘Small Food’ is perceived, by customers, to be better than ‘Big Food.’ Whether it’s the impression they use better ingredients, follow a better process, or create better-for-you products, ‘Small Food’ is increasingly perceived as a better choice.

WHAT WE THINK

‘Big Food’ needs to tell its story.

Brands and manufacturers of all sizes are necessary and vital players in today’s dynamic food system. ‘Big Food’ plays a significant role in bringing food to our kitchen tables, favorite dining spots and emerging spaces where millions seek sustenance on a daily basis. This isn’t a David vs. Goliath narrative; it’s about reminding customers the importance each party plays.

WHAT’S NEXT

Customers want to feel good about their food and beverage purchases, and ‘Big Food’ has a great story to tell, particularly in three key areas:  

  • Consistent supply. We’ve been with many of our customers since their beginning. We’re on the shelf, in the case, and in the kitchen when and where we’re needed without fail.
  • Record of safety. Our size gives us the ability to ensure the safest possible food with investments in the latest technology and equipment available.
  • Higher standards. Volume speaks loudly. We can dictate which farmers/co-ops we work with, demand more responsible care of our crops and animals, and ensure we get first choice on ingredients which, ultimately, means higher quality for our customers.

Look for Winning with Big Food: Part 2 next month!

The Customer Insight Behind Lidl’s Success

German grocery-discount chain, Lidl, recently announced the locations of its 20 six-aisle small-format stores opening this summer. But what struck me most was Lidl’s U.S. CEO’s comment on the new stores:

Lidl's new U.S. small-format store

"When customers shop at Lidl, they will experience less complexity, lower prices, better choices and greater confidence." Lidl U.S. CEO, Brendan Proctor


Lidl’s new U.S. small-format store

Less complexity. Meaning, fewer choices. At first this sounds counterintuitive to what we know about customers demanding choice and customization at every turn. But choice requires decisions, and that activity is increasingly causing anxiety.

Why It’s Happening

In her 2017 Iconosphere address, Kathleen Vohs, Distinguished McKnight University Professor at the University of Minnesota, argued that people today are increasingly choice-fatigued. In fact, she revealed the average person makes 225 food decisions per day.

Similarly, Gartner (formerly CEB) found in their 2016 research that 20% of U.S. consumers experience anxiety in everyday decisions, with younger generations reporting even higher levels.

What We Think

Curating customer decision-making must be a pillar of today’s customer-service framework.

Rather than simply providing choice, we should strive to curate relevant solutions. That means understanding our customers’ needs, and their customers’ values, on a deeper level. Executed properly, brands have the opportunity to differentiate themselves as a true business consultant.

What’s Next

In theory, it’s simple: make it easier for customers to buy your products.

  • SKU rationalization: Eliminate underutilized items or expand offerings based on customer needs.
  • Optimize the decision-making process: Make it efficient to find – or proactively provide – only the most relevant product/brand information for your customers.
  • Understand strategic sacrifice: All choices require sacrifice. Understand the ‘must have’ and ‘nice to have’ criteria of your target customer to make more meaningful recommendations.

Because sometimes, less really is more.

Just some Thought for Food TM

Questions, comments or want to learn more? Let's connect! akile@jtmega.com

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