For consumers, food has become a service


"Consumers are not going to pay more for the product itself – the sandwich, the cheese – but for the broader customer experience," considers Martijn Rol, Rabobank Food Sector Specialist.

Posted on Oct 11 ,09:32

For consumers, food has become a service

Seeking a broader experience in the food sector, European consumers, especially the millennials, have added a new trend in the market, one described by Martijn Rol, Rabobank Food Sector Specialist, as "hybrid consumerism".
"The European market may not be growing in volume terms, but there is lots of upside in terms of pricing. We’re seeing changes in when, where and how people eat. What food means to them. All this feeds back into the food supply chain. Consumers are not going to pay more for the product itself – the sandwich, the cheese – but for the broader customer experience. Food is becoming a service," he explained in an article.
Many consumers today buy standard food products cheap so they can spend more on products with added value. In this climate, mid-market players in the food supply chain are especially at risk.

Europe’s population and food needs are stabilizing and likely to decline longer-term and the food industry must respond to the consumer's preferences such as transparency, health, convenience, sustainability and “hybrid consumerism.” "People want to know where food comes from, what it contains, how healthy it is and what its impact on the planet is. But when they actually choose products, price and convenience also kick in as deciding factors. Factors that sometimes conflict with their other priorities. Regardless of their income, many consumers want to spend as little as possible on standard products, but they’re prepared to spend more on products with a unique character. This trend is especially hard on the mid-market segment," considers Martijn Rol.
In his opinion, this type of behavior puts at risk large food companies and top brands who are losing influence in front of a consumer decided to search for unique experiences in food. "Top brands are losing their dominant position. Supermarkets are less dependent on them than before because they have built strong brands of their own, which they leverage with their own-brand products. Mid-market brands are in even bigger trouble," he added. Taking over popular niche brands or farming out the actual production to a private label manufacturer is seen as a possible solution for the brands endangered by the hybrid consumerism.
On the other hand, supermarkets that are neither high-end nor discounters are also at risk. "People are busier and spend less time cooking, especially on weekdays. They’re interested in services that save them time, from pre-sliced veggies and ready-to-cook meal kits to prepared foods and delivery. Moreover, with jobs no longer nine-to-five, people increasingly want to shop and eat on the go, outside regular hours", observes Mr. Rol.

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