I spent a lot of time talking at a very high level about a National Food Strategy for Canada. Let’s now dig a little deeper and see how it might impact the various food sectors in the Canadian food industry. But first, let’s dig a little deeper into consumer trends. I discussed this, too, on a very global level in one of my earlier articles. I talked about global markets, demographics, even climate change, but I want to get a bit more specific about the consumer now.
Information in this area is very complex, so I have tried to narrow the trends down into several segments recognizing the demographic and psychographic aspects of food. I get down to five general segments of the consumer market, particularly as it exists in the developed markets but also in the rapidly developing markets. Remember, these segments overlap – people can be part of several of these groups. These are:
- Foodies: These are consumers who want pleasure from food – sophistication, sensory variety, fun and exoticism. They may want creative, upscale gourmet foods, or they may seek fun, but not upscale, ethnic foods that appeal to consumers outside the originating ethnic groups. These are often the baby boomers, but other generational groups are becoming foodies, especially the millennials. This group appears to be well over half the population in developed markets.
- Healthies: These consumers are the serious label readers looking for the ingredient list and the nutritional profile. They want natural, organic, even vegetal foods, and often may be “flexitarians.” They looking for easier weight control, increased energy, and chronic disease prevention from the food they eat. This leads into nutraceuticals and natural health products derived from food. They are probably somewhat less than half the population. This is happening in the developing markets as well.
- Greenies: These consumers want foods that are ethically produced with the environment and social responsibility in mind. They seek natural, organic and local foods. They also look for certifications like organic, Rainforest Alliance, Marine Stewardship, or Fairtrade Alliance. Concern about the ethical treatment of animals is gaining ground. Greenies are a growing group, probably as much as a quarter to a third of consumers.
- Speedies: These are the consumers willing to pay for convenience and minimal preparation time, which includes virtually all of us some of the time. The trend is starting to grow in the developing markets, where two-income households are growing fast. “I want a complete meal that I can throw in the microwave and have it ready in less than 10 minutes.”
- Cheapies: Nothing derogatory is intended by that term. These are the value-conscious shoppers looking for the lowest-cost options for their diets. That may be because they are just not foodies and price is the overriding factor, or they may have limited incomes and just can’t spend more. They are probably somewhere between a third and half the population.
So there they are. This is what I see from all the consumer data and marketing discussions I hear. And my estimates of the size of these groups are very much a rough guess derived from conversations I’ve had with people in the industry. Forgive me if I’m way off base.
So where am I going with this information? Well, I want to try to use these consumer segments to look at the various segments of the Canadian Food Sector. For example, what are the potential implications, both challenges and opportunities, for, say, the Canadian red meat sector or the grains sector or horticulture? As I’ve said before, I see a number of “business units” that need strategic plans tied in with the Canadian National Food Strategy, but allowing for differences from one business unit to the next. These are in my terms:
- Red meat products
- Poultry products
- Dairy products
- Fish and seafood products
- Grain products
- Oilseed, pulse and special crop products
- Fruit, vegetable and herb products
- Beverage products (both alcoholic and non-alcoholic)
- Complex processed foods (for example, prepared meals and components, confectionery, etc.)
Over the next few articles I want to take those consumer trends and see how they apply to these business units and what strategies might result. In other words, how might our existing “brands” (such as Canadian Pork, Canadian Barley, etc.) need to respond? Are there new brands that we might focus more on (like Canadian Craft Beers)? Let’s keep digging.
Gary Fread is president of Fread & Associates Ltd., consultants to the food industry. He has spent 25 years in management positions in the food processing industry, with a background in sales, logistics, purchasing and technical areas. He has worked with Procter & Gamble, Campbell Soup and Morrison Lamothe, and is the past president and CEO of the Guelph Food Technology Centre. He is active in many food industry associations and organizations, serving on the boards of several. Contact him at [email protected]