By John Clement
October 7, 2011
Farmers may think that they’re just selling products like pork chops or pears to consumers. But they’re selling much more. They’re also selling health, environmental sustainability, animal welfare and a host of associated “values.” By understanding these consumer values, farmers can capitalize on this knowledge to develop strategies that increase or diversify sales.
John Scott, head of the Canadian Federation of Independent Grocers, understands well the linking of products and values. He is of the opinion that farmers and processors need to take a hard look at how they put their products into the system. Scott says that “one size fits all” no longer works in today’s retail sector, with farmers and processors increasingly needing to develop product and marketing strategies that take consumer values into account.
According to Scott, there’s been an explosion in the food retailing sector, with food being sold by more and more vendors, utilizing more and more strategies. In addition to traditional supermarkets, there are also “soft discount” stores, “hard discount” stores, ethnic and specialty stores, plus offerings from retailers who may currently be selling clothes, pharmaceuticals or hardware.
At the heart of all these different strategies and retail offerings are a handful of consumer values that are driving diversification. According to Scott, price remains one of the prime values due to consumer concerns about mounting public and private debt around the world, plus the rising cost of oil. House brands and no-name products are flourishing due to these price concerns.
But price isn’t the only value that is driving things. Health ranks high on the list as people increasingly become aware that what they eat is important for disease prevention. Some stores have gone as far as having a diabetic’s educator at their stores to help people shop for items that will help control blood sugar. Rounding out the list of consumer values is confidence in the food that’s being purchased, authenticity amongst retailers and product providers, convenience and environmental sustainability.
In my opinion, Scott’s analysis of retailing is good news for farmers because it means there’s more than one market for food, which creates a lot of options for product development. Also, farmers should be able to give solid delivery on the creation of confidence and authenticity in the story behind the food they provide. However, challenges probably still exist in increasing the amount of solid communication throughout the product development chain. Farmers, processors and retailers are talking to each other, but it appears that more talk is needed to make the most of market opportunities.
Regardless of the challenges, we shouldn’t lose sight of the fact that food and consumer values are intricately linked. In that understanding are market opportunities waiting for development.