June 20, 2016

20/06/2016: Diverging consumer demands put contradictory pressures on producers, says Prof David Hughes

“Quite clearly, the future is bright for animal-derived protein consumption. However, the further polarisation of consumer demands presents a real challenge for the livestock and dairy industry,” warned Prof David Hughes, Emeritus Professor of Food Marketing at Imperial College London.
  
He compared the trend among consumers in emerging markets who seek greater quantities of more affordable milk, fish and meat, to that of those in developed markets where consumption of such productions is essentially flat or on the decline. Affluent consumers, non-governmental organisations and special interest groups all exert pressure on the industry to address concerns regarding intensified production methods and provenance, for example.
      
“We observe the same distinction within every country around the globe,” noted Prof Hughes, who
will deliver the keynote presentation at the World Nutrition Forum on 13 October 2016. The event will be hosted by Biomin.
 
Incompatible forces
“Can a fast food retailer and its suppliers provide a one dollar menu item that meets the green consumer’s demands? Probably not,” remarked Dr Hughes, citing the value menu options offered by a number of fast food chains in the United States and elsewhere.
 
“Some consumers are able and willing to pay more: it’s up to the industry to work out what people value. We know that some will pay for great taste, convenience, or other lifestyle requirements—but not safety,” he explained.
  
“For most consumers, product safety is a minimum requirement for which they generally will not pay a premium.”
       
https://info.biomin.net/acton/ct/14109/s-01ac-1606/Bct/l-0010/l-0010:aa/ct3_1/1?sid=2zFWeTFPw
Image: USDAgov
Margin discount
Safety and sustainability requirements are two areas where consumers often demonstrate unwillingness to pay more. For producers, failure to reach what Dr Hughes has dubbed ‘the green bar’ —ie the consumer requirement for food to be produced in an environmentally responsible way— will result in a price discount and impact a producer’s profitability.
  
Consumer education
According to Prof Hughes, tensions exist between the use of innovative technologies that improve efficiency and consumer acceptance of the final product.
 
“The challenges facing the industry are a clear sign that, while changes are needed, they must be accompanied by better communications about how food is produced.”
       
He cited the effort by UK retailer Waitrose to broadcast live, real-time footage of its dairy operation in TV spots and train terminals to highlight its sourcing policy.
      
“There is a need to increase the knowledge level of the average consumer, and if we as an industry do not do it, then others such as special interest groups will.”
       
Prof Hughes will deliver the keynote presentation at the World Nutrition Forum on 13 October 2016.
       
Opposing consumer demands on price, sustainability place challenges on livestock and dairy sectors. Share your thoughts on Twitter and Facebook using the hashtag #WNFVancouver

         
‘Driving the Protein Economy’ will be the theme of the 7th edition of the biennial World Nutrition Forum, the premier animal nutrition event hosted by Biomin.
 

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