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A two-headed consumer strolls around today’s grocery stores, confusing producers and retailers. One day a consumer searches out food products that are local, organic and welfare-friendly. The next, that same consumer chooses food items that are affordable.
The challenge? This two-headed consumer doesn’t behave the same way all the time.
It’s puzzling to both farmers and food companies and is causing a huge shift in what retailers buy from farmers.
“Suddenly big is bad and food companies are really struggling with that new paradigm,” says Aidan Connolly, chief executive officer of Cainthus and president of AgriTech Capital. “Before now, being big was good. You used to gain credibility by being associated with big brands.”
But that’s no longer true. Food companies are trying to guess what consumers are looking for, tick more boxes and answer more questions.
Have you heard of consumers being described as prosumers?
“Prosumers are consumers who actively become involved with the design, production and delivery of the goods and services they consume, leveraging the power of social media to become vocal advocates for products and brands,” Connolly says. “What they choose to consume reflects their values, aspirations and beliefs. From a food company’s perspective, it means prosumers increasingly shape, and even control, the message and drive demand – not the manufacturer.”
For example, in Australia, farmers are advertising eggs based on the water footprint of the egg (this chicken used less water than its competitor).
“You’re seeing questioning of farm practices like never before,” Connolly says. “On a global scale, that’s being reflected in what farmers are choosing to do.”
Farmers in Europe, the United Kingdom and Ireland are under great pressure to know their carbon footprint and to demonstrate what practices they are engaged in to reduce it.
Where do the food companies fit in?
The consumer’s push for more sustainability in farming is forcing food companies to gather data they have never had to pay attention to before, says Emily Johannes, industry expert. It’s no longer just about cost, companies are looking at operational data and use.
“Companies must interact with their suppliers (first and foremost farmers),” she says. “Consumers want to know what’s going on at the farm. The greatest opportunity for environmental stewardship is for companies to manage that activity. A physical four-wall plant has its impact, but not like hundreds of farmers supplying product to that plant.”
Food companies can receive an unexpected benefit from this, Johannes adds. When consumers question how farmers do things, companies can step in and evaluate their farm suppliers’ practices and find answers while mitigating future challenges.
This push is also resulting in food companies adjusting their product assortments in conjunction with food retailer and foodservice company partners, says Justin Sherrard, global protein strategist for Rabobank’s Raboresearch Food and Agribusiness team.
Food companies are watching closely to where the consumer demand is growing, then determining quickly if there is an opportunity for the supply chain.
The challenge of feeding two billion more people remains — and food companies might have the biggest stake in this challenge, Connolly says. Imagination will be a big part of what happens next.
“I’m sure consumers will never go back to where they were before,” Connolly says. “It’s going to be a new model, probably something with tremendous fragmentation of the traditional brand model, customization of foods to what each individual prosumer/consumer wants.”
The global food system must be more sustainable. But Sherrard says it won’t be easy. He believes it will require the full supply chain to work together, including signals from the market.