Climate Change And Food Industry Opportunities And Threats

In Perth recently Dr David Hughes – Professor of Food Marketing at London’s Imperial College – said that changing consumer demand and rising fuel and food costs are all set to become major threats for producers of premium products. He says:

“They will need to quickly identify what consumers are prepared to pay for a niche brand and which segments are best to target…

As shoppers tighten their belts, they are now looking more carefully at premium food prices and questioning why they should pay more for a particular product…

We know that they will pay more for a better tasting or healthier product, but they will not pay more simply for fancy packaging.”

Maximising Opportunities

Consumers will be affected by both rising food and oil prices, therefore less money will be spent on food.

Probably age-old advice from David for the food industry is to listen to what their customers are saying.

“It’s simply a matter of delivering what your customers value at a sufficiently low cost that you can make a good profit..

Fundamentally, a business revolves around understanding what your customers – and your customers’ customers’ – value and are willing to pay for.”

Points To Note

• “Food and oil price inflation will squeeze more than just consumers in the food industry. Farm input inflation escalates sharply, and retailers profit from food price inflation. Slowing and erratic economic growth, in mature and emerging nations also has a consequential impact on exports and imports.”
• As producers seek lower cost ingredients solutions they increase their risk of food integrity disasters. Food safety is a widely reported issue, consumers will always know when something fails.
• Food and oil price inflation, and world food shortages, will give consumers the opportunity to embrace alternative methods of food production, such as genetically modified crops.
• “Using science sensibly is the key to genetically modified crops. Drought tolerance, disease resistant and efficient green energy crops is top of mind for consumers.”
• “Consumers who oppose genetically modified crops will be given the opportunity to embrace them as one part of the solution as food shortages spread around the globe.”

The outlook for the food industry according to David will be “business as usual by 2010.”