Food Issues: On Top Of Our Minds

CIES – The Food Business Forum

The Competitive Landscape: The ever-pressing need to differentiate and gain loyalty is intensified by the share gains achieved by discount retailers such as Aldi to the number five position.

Responses from 596 CEOs and senior executives to an online survey were collected. Of them, 247 were retailers and 132 were manufacturers; 173 were service providers and 16 fell into the ‘Others’ category. These executives hail from 54 countries with 67 percent of them came from Europe (including Turkey, Ukraine and the Russian Federation).

The economy and consumer demand shot up from fourth place last year to claim the top spot in the 2009 survey. Businesses everywhere are facing problems of finance as a result of the credit crunch and all are exposed to volatility in currency value and stock prices. However, retail and fast-moving consumer goods (FMCG) companies face additional challenges. The massive downward pressure on price associated with a recession coincides with some lingering upward pressure on the cost of raw materials in food and significant changes in consumer spending patterns, particularly away from non-food and to some degree away from national brands. Retailers must therefore re-evaluate their assortments and the size and scale of their store networks.

The competitive landscape climbed up from ninth place last year, to claim fourth place this year. The jump reflects a dual imperative: the recession creates increased price competition among grocers, while the ever-pressing need to differentiate and gain loyalty is intensified by the share gains achieved by discount retailers such as Aldi to the number five position. Along with price, format and assortment innovation is crucial. Brand manufacturers are challenged to stay compelling to consumers seeking cheaper alternatives via store-brands. Consumer marketing jumped three places to rank eighth, indicating that the industry is placing greater emphasis on two-way communication with its consumers: a healthy response to the fall in consumer confidence that has accompanied the financial crisis.