SlideShare a Scribd company logo
1 of 33
Food Marketing in 2009




          Marie-Claude Michaud
         Business Strategy Consultant
                   www.dancause.net



              FCC – SIAL Montréal
                      April 1, 2009
Retail food market
INDUSTRY EVOLUTION AND TRENDS
Evolution of the food distribution industry

      In recent decades, the food distribution industry has
  
      undergone a significant wave of consolidation.
      •  Increase in average sales per company from $4 to $11 billion


      Ten years ago, there were 45 public companies in the
  
      North American food distribution sector.
      •  Now – just over 20
Quebec’s retail food sales market is
dominated by three distributors
                                                        Market Share
      Company
                                           Quebec                         Canada
                                  Supermarkets       All Food   Supermarkets        All Food
 Loblaws (Provigo) 36%                           30%            41%            33%
                                          93%              78% 20%      76% 15%            60%
 Sobeys (IGA)                 30%                26%
 Metro (A&P)                  27%                22%            15%            12%
 Safeway                      -                  -              8%             7%
 Overwaitea                   -                  -              6%             5%
 Wal-Mart                     -                  5%             -              6%
 Costco                       -                  9%             -              7%
 Other                        7%                 8%             10%            15%
 Source: CIBC World Markets
But the food supply has become more
fragmented…
      Supermarkets are losing market share
  

                          Estimated retail food sales by network
                                  Canada – 2007-2008
                                                                    Market
                                                         Sales
               Type of business                                               Growth
                                                                    share
                                                    ($ million)
        Supermarkets                                     $61,390                   4%
                                                                      80.4%
        Pharmacies                                        $1,630                   7%
                                                                       2.1%
        Warehouse clubs                                   $5,100                   5%
                                                                       6.7%
        Discount stores                                    $4,115                 11%
                                                                       5.4%
        Convenience stores                                $3,680                   2%
                                                                       4.8%
        Other                                               $415                  14%
                                                                       0.5%
        TOTAL                                            $76,330                   5%
        Sources: CIBC World Markets, Statistics Canada
Competition is increasing

      In Ontario, supercentres have transformed the competitive
  
      landscape.

               Increase – In-store
                                                       Growth in food sales*
                 food purchases
                       Canada                       Canada      Ontario        Quebec
                         7.7%                        3.3%           3.2%         4.2%


                                 Per capita food store spending
                                                             2007              2008
             Canada                                          8.5%              8.4%
               Ontario                                       6.8%              6.7%
               Quebec                                        9.9%              10.1%


            * Supermarkets and convenience stores                     Source: Canadian Grocer, February 2009
But the current crisis should be good for
grocers
      Net income for the major chains increased significantly in the
  
      last fiscal quarter
      Consumers are eating out less
  

      However, consumers who didn’t eat out before the crisis will
  
      also try to reduce spending and, more than ever, will be looking
      for bargains
      Sales are expected to increase 3.1% in Canada in 2009*
  
           How much will profits increase?
      • 




                                                   *Canadian Grocer, February 2009
Explosion of private labels

      The increase in the number of products carried under private
  
      labels, particularly in the premium segment, has clearly
      improved the position of the major chains.
      Trying to compete, Metro and Sobeys have been particularly
  
      aggressive.
      •  Sobeys launched 4,800 new Compliments-brand products in its 2008
         fiscal year.*
      •  Metro announced that it will launch over 2,000 new products in the
         next year.


                 Faced with category leaders and private labels,
                     what niche can Quebec SMEs carve?


                                                               *12 months ending May 3, 2008
Fragmentation of consumption

                                          
 
     •  Educated, informed and busy
     •  Care for their health AND want good food
     •  Concerned about the environment
     •  Worried about pesticides, GMOs, food poisoning, heart disease,
        cancer, etc.
     •  Desire for organic food products
     •  Price sensitive

                                                                     
 


                 The one-size-fits-all approach to food
                 marketing no longer works for them.
The traditional supermarket is adapting
slowly
      Major chains are not as well positioned to serve this “new
  
      market”:
      •  They don’t have the flexibility to adapt their product and service line-up
         quickly


      “Micro-segments” are generally less attractive to the big
  
      industry players
      •  Big companies—both retail and manufacturing—are structured to
         produce and distribute large volumes


      “The consumer is the boss.”
  
The retail food industry is polarizing

   Specialty stores                         Big box stores
    CUSTOMER focus                                PRICE focus




   Bikes                                                 Bikes
  $6,000                                                 $150




                                       •  Volume and standardization
•  Specialty and exclusive products
                                       •  Commodities
•  Value-added products and services
                                       •  Price wars
•  Attentive to the customer
                                       •  Standard courtesy
•  Customer intimacy
Opportunity for small players

      Like other retail sectors, the retail food sector is
  
      restructuring:
      •  Rebirth of specialty shops

      Market maturity and diversification of consumer tastes mean
  
      that the “categories” of growth products are generally
      smaller.
      Small businesses are energized by the “new consumer” and
  
      are trying to be innovative and exclusive.
Small businesses – stores of the future?

      Neighbourhood grocery stores and specialty food stores are
  
      closer to their customers and better positioned to meet their
      expectations and create a close relationship with them
      Two main factors are fostering the growth in the number of
  
      small specialty shops
      •  Information technology
      •  Demographic shifts
Small businesses
A FEW STRATEGIES FOR BREAKING
INTO THE MARKET…
Develop a unique feature

      Develop a unique expertise or product that cannot be
  
      reproduced on a large scale
      •  Complexity of implementation and impossibility of industrial
         production protect small from big players

      This strategy has two constraints:
  
      •  Places the company in market segments that value this type of
         product and involves specific and selective marketing
      •  Mandates a high price strategy
Increase the barriers to entry

      This strategy is based on developing a protected brand that
  
      guarantees origin or quality of the product based on rigorous
      specifications
      Means of controlling the number of potential entrants
  
      Focus on consumer recognition and value of the label
  
      Examples:
  
      •  Agneau de Charlevoix: protected geographical indication (PGI)
         approved
      •  Ice cider: approval pending
Set yourself apart

      In mature markets or undifferentiated product categories,
  
      focus on innovation
      •  Trademark
          –  Bella tomatoes by Demers or Veau de Charlevoix
      •  Different, attractive and/or practical packaging
          –  La Tomate’s tubes

      Inject energy into a product category lacking in innovation
  
      •  E.g.: Europe Best (frozen fruit) a few years ago…

      Dare to go where the big players never invest…
  
      •  Nutra-Fruits cranberry-based product line
Cultivate a regional identity

      Avoid spreading resources thin by focusing most
  
      development activities in region of origin

      Maximize benefits of proximity:
  
      •  Reduce advertising costs through local word of mouth
      •  Knowledge of customer needs and habits
      •  Personal business relationships rather than formal or contractual
         ones
      •  Ability to respond quickly and adapt to change
Build partnerships

      With a customer
  
      •  E.g.: La Meunerie Milanaise and Première Moisson
      With another processor
  
      •  Distribution - manufacturing – sale of complementary products
      With a distributor or retailer
  
      •  Exclusive or customized products
      With producers
  
      •  Regional label products
      With regional businesses or organizations
  
      •  Develop a label, portal-type Web site, shared booths at regional events
Looking ahead…

     Basic trends favour small producers and food processors
 

     •  Consumers are looking for premium, different, Quebec-origin
        products…
     •  Small retailers can set themselves apart by offering unique,
        innovative, quality products from here…
     •  Growth in food sales in specialty, gourmet, organic, regional,
        health niches, etc. is higher than the industry average…
     •  Specialty neighbourhood shops are booming…
Medium and large businesses
WHAT IS THE RIGHT WAY?
Forced to innovate…

     Between the inevitable rise of private brands…
 
     •  In the U.S., just 9% of consumers believe that national brand
        products are better than private labels and 60% believe that they are
        manufactured in the same factories as national brands.*

     … and the trend pushing consumers towards food products
 
     perceived as better quality,* all brands combined
     Despite the current economic context that slows but does
 
     not change these basic trends




                                            *The Hartman Group, Contemporary Food Trends, 2008
New definition of quality

      Products with a “history” – origin, producer/manufacturer or
  
      method of production
      Packaging that signals quality (transparent, matte finish,
  
      etc.)
      Products manufactured using fewer, better-quality
  
      ingredients
      Products for the more adventurous palate
  

      Products that seem less industrial, less mass-produced
  




                                   Source:The Hartman Group, Contemporary Food Trends, 2008
SIAL Paris 2008

TRENDS IN INNOVATION
Trends in food innovation

                            MAJOR CATEGORIES

     43%              24%           17%                   14%                       1%

  PLEASURE        CONVENIENCE      HEALTH               FITNESS                ETHICS



                   Time-saving     Natural             Slimness             Environment
      Fun

                                                       Energy /
                    Handling      Vegetarian                                 Citizenship
   Exoticism
                                                      Well-being
   Sensory          Portability    Medical
                                                       Cosmetic
    variety

 Sophistication
                                             SIAL Paris – 2008; Identified by XTC
Trends: product handling – time saving –
sensory variety
                    SIAL - Paris 2008 Selections


 Roast veal in juices




                                 Individual sauce packets
                                 Ready after 10 seconds in the microwave
Other examples of the 350 innovations
selected at SIAL Paris 2008

 Slimness - Sophistication

                             Product handling – Sensory variety
                               For co-branding and new format




 Italian french fries
 with 1% virgin olive oil,
 bake in the oven.
                                Breaded chicken or ham sticks stuffed with
                                        La Vache Qui Rit cheese
Grand Prix 2008 – SIAL Paris 2008

            Pastry dough… in sweet or salty flavours!
                     Selected for the flavours that provide
                    a base for new and original pie recipes




                             Innovation
                             Sensory variety – Time saving




 Taste of Provence – tomato and oregano
 Chocolate
NAVIGATING THE PRESENT AND
CHARTING THE FUTURE…
Don’t minimize the importance of marketing

      Follow up, be proactive and innovate
  

      •  Identify opportunities and risks

      •  Reassess your price strategies regularly

      •  Increase product development initiatives


      Get to know the consumer better*
  
      •    68% change brands regularly
      •    5% are loyal to one brand
      •    73% shop in at least five types of stores
      •    26% are loyal to one merchant in particular



                                            *U.S. data   Source: GMA - Deloitte,Shopper Marketing 2007
“Shopper marketing” or the importance of
the store…
      70% of buying decisions are made in the store.
  
      68% of in-store purchases are unplanned.
  
      The shopper is not necessarily the consumer…
  
      “Shopper marketing” still a vague concept but growing in
  
      importance:
      •  In recent years, U.S. manufacturers and retailers have increased
         marketing spending by 2%.*
      •  Increased spending on “shopper marketing”:
           Manufacturers: +21%
           Retailers: +26%




            * Estimated average annual growth rate 2004-2010   Source: GMA - Deloitte,Shopper Marketing 2007
Rethinking your marketing mix?

      Get started or solidify a base in “shopper marketing”
  
      •  You don’t need to do it all, but do something
      •  Know your customers and their strategies and become their partner
           Retailers are becoming more effective and sophisticated marketers
      Invest in your consumer and shopper knowledge
  
      Align your initiatives with the retailer’s objectives and marketing
  
      plan
      Develop innovative marketing plans tailored to every major
  
      customer
Questions? Comments?
          Marie-Claude Michaud
         Business Strategy Consultant
                   www.dancause.net




             FCC – SIAL Montréal
                     April 1, 2009

More Related Content

What's hot

Media landscape updater i 2012
Media landscape updater i 2012Media landscape updater i 2012
Media landscape updater i 2012MediaDirectionOMD
 
Petco Final Presentation
Petco Final PresentationPetco Final Presentation
Petco Final Presentationmgregory18
 
Predicting the Housing Market with Buyer & Seller Psychology (Predictive Anal...
Predicting the Housing Market with Buyer & Seller Psychology (Predictive Anal...Predicting the Housing Market with Buyer & Seller Psychology (Predictive Anal...
Predicting the Housing Market with Buyer & Seller Psychology (Predictive Anal...Altos Research
 
Carlisle q12011earningscallpresentation
Carlisle q12011earningscallpresentationCarlisle q12011earningscallpresentation
Carlisle q12011earningscallpresentationcarlisle_com
 
Showroomprive - NOAH12 London
Showroomprive - NOAH12 LondonShowroomprive - NOAH12 London
Showroomprive - NOAH12 LondonNOAH Advisors
 
Petco Brand Audit + Creative Campaign
Petco Brand Audit + Creative CampaignPetco Brand Audit + Creative Campaign
Petco Brand Audit + Creative Campaignlgparkinson
 
Net Lease Research Report by The Boulder Group
Net Lease Research Report by The Boulder GroupNet Lease Research Report by The Boulder Group
Net Lease Research Report by The Boulder GroupThe Boulder Group
 
progress energy 4/3/08
progress energy 4/3/08progress energy 4/3/08
progress energy 4/3/08finance25
 
US Personal Care and Consumer Healthcare (OTC) Market and M&A highlights
US Personal Care and Consumer Healthcare (OTC) Market and M&A highlightsUS Personal Care and Consumer Healthcare (OTC) Market and M&A highlights
US Personal Care and Consumer Healthcare (OTC) Market and M&A highlightsPete Chatziplis
 
Mercer Capital's Value Focus: Convenience Store Industry | Q3 2016 | Segment:...
Mercer Capital's Value Focus: Convenience Store Industry | Q3 2016 | Segment:...Mercer Capital's Value Focus: Convenience Store Industry | Q3 2016 | Segment:...
Mercer Capital's Value Focus: Convenience Store Industry | Q3 2016 | Segment:...Mercer Capital
 
Tarik Fawzi, AEneas #Maduk
Tarik Fawzi, AEneas #MadukTarik Fawzi, AEneas #Maduk
Tarik Fawzi, AEneas #MadukJames Cameron
 
US Home Prices (April 2010)
US Home Prices (April 2010)US Home Prices (April 2010)
US Home Prices (April 2010)Altos Research
 

What's hot (13)

Media landscape updater i 2012
Media landscape updater i 2012Media landscape updater i 2012
Media landscape updater i 2012
 
Petco Final Presentation
Petco Final PresentationPetco Final Presentation
Petco Final Presentation
 
Predicting the Housing Market with Buyer & Seller Psychology (Predictive Anal...
Predicting the Housing Market with Buyer & Seller Psychology (Predictive Anal...Predicting the Housing Market with Buyer & Seller Psychology (Predictive Anal...
Predicting the Housing Market with Buyer & Seller Psychology (Predictive Anal...
 
Carlisle q12011earningscallpresentation
Carlisle q12011earningscallpresentationCarlisle q12011earningscallpresentation
Carlisle q12011earningscallpresentation
 
Showroomprive - NOAH12 London
Showroomprive - NOAH12 LondonShowroomprive - NOAH12 London
Showroomprive - NOAH12 London
 
Petco Brand Audit + Creative Campaign
Petco Brand Audit + Creative CampaignPetco Brand Audit + Creative Campaign
Petco Brand Audit + Creative Campaign
 
Starbucks
StarbucksStarbucks
Starbucks
 
Net Lease Research Report by The Boulder Group
Net Lease Research Report by The Boulder GroupNet Lease Research Report by The Boulder Group
Net Lease Research Report by The Boulder Group
 
progress energy 4/3/08
progress energy 4/3/08progress energy 4/3/08
progress energy 4/3/08
 
US Personal Care and Consumer Healthcare (OTC) Market and M&A highlights
US Personal Care and Consumer Healthcare (OTC) Market and M&A highlightsUS Personal Care and Consumer Healthcare (OTC) Market and M&A highlights
US Personal Care and Consumer Healthcare (OTC) Market and M&A highlights
 
Mercer Capital's Value Focus: Convenience Store Industry | Q3 2016 | Segment:...
Mercer Capital's Value Focus: Convenience Store Industry | Q3 2016 | Segment:...Mercer Capital's Value Focus: Convenience Store Industry | Q3 2016 | Segment:...
Mercer Capital's Value Focus: Convenience Store Industry | Q3 2016 | Segment:...
 
Tarik Fawzi, AEneas #Maduk
Tarik Fawzi, AEneas #MadukTarik Fawzi, AEneas #Maduk
Tarik Fawzi, AEneas #Maduk
 
US Home Prices (April 2010)
US Home Prices (April 2010)US Home Prices (April 2010)
US Home Prices (April 2010)
 

Viewers also liked

中国的食品保障 | China's Food Security
中国的食品保障 | China's Food Security 中国的食品保障 | China's Food Security
中国的食品保障 | China's Food Security Tyler Gleason
 
Food Marketing 101
Food Marketing 101Food Marketing 101
Food Marketing 101Catalyst
 
Marketing and Promotions of Food and Beverage
Marketing and Promotions of Food and BeverageMarketing and Promotions of Food and Beverage
Marketing and Promotions of Food and BeverageCris dela Peña
 
Digital Food Marketing - 10 Of The Most Delicious Opportunities for 2014
Digital Food Marketing - 10 Of The Most Delicious Opportunities for 2014Digital Food Marketing - 10 Of The Most Delicious Opportunities for 2014
Digital Food Marketing - 10 Of The Most Delicious Opportunities for 2014Big Spaceship
 
WHAT’S ON THE MENU IN 2017: Global Food and Beverage Trends
WHAT’S ON THE MENU IN 2017: Global Food and Beverage TrendsWHAT’S ON THE MENU IN 2017: Global Food and Beverage Trends
WHAT’S ON THE MENU IN 2017: Global Food and Beverage TrendsEdelman
 

Viewers also liked (8)

Bunge
BungeBunge
Bunge
 
Bunge
BungeBunge
Bunge
 
中国的食品保障 | China's Food Security
中国的食品保障 | China's Food Security 中国的食品保障 | China's Food Security
中国的食品保障 | China's Food Security
 
Food Marketing 101
Food Marketing 101Food Marketing 101
Food Marketing 101
 
Marketing and Promotions of Food and Beverage
Marketing and Promotions of Food and BeverageMarketing and Promotions of Food and Beverage
Marketing and Promotions of Food and Beverage
 
Digital Food Marketing - 10 Of The Most Delicious Opportunities for 2014
Digital Food Marketing - 10 Of The Most Delicious Opportunities for 2014Digital Food Marketing - 10 Of The Most Delicious Opportunities for 2014
Digital Food Marketing - 10 Of The Most Delicious Opportunities for 2014
 
WHAT’S ON THE MENU IN 2017: Global Food and Beverage Trends
WHAT’S ON THE MENU IN 2017: Global Food and Beverage TrendsWHAT’S ON THE MENU IN 2017: Global Food and Beverage Trends
WHAT’S ON THE MENU IN 2017: Global Food and Beverage Trends
 
2016 Content Marketing Playbook
2016 Content Marketing Playbook2016 Content Marketing Playbook
2016 Content Marketing Playbook
 

Similar to Food marketing in 2009

Publishing excel charts and power points presentation
Publishing excel charts and power points presentationPublishing excel charts and power points presentation
Publishing excel charts and power points presentationGisell20
 
Publishing excel charts and power points presentation
Publishing excel charts and power points presentationPublishing excel charts and power points presentation
Publishing excel charts and power points presentationGisell20
 
Publishing excel charts and power points presentation
Publishing excel charts and power points presentationPublishing excel charts and power points presentation
Publishing excel charts and power points presentationGisell20
 
What They Want: Insights into why Canadians Shop Direct
What They Want: Insights into why Canadians Shop DirectWhat They Want: Insights into why Canadians Shop Direct
What They Want: Insights into why Canadians Shop Directpsazon
 
Wal Mart Store Financial ResultsMay 06/05/08
Wal Mart Store Financial ResultsMay 06/05/08Wal Mart Store Financial ResultsMay 06/05/08
Wal Mart Store Financial ResultsMay 06/05/08finance1
 
Cold-chain Market prospects in India
Cold-chain Market prospects in IndiaCold-chain Market prospects in India
Cold-chain Market prospects in IndiaPawanexh Kohli
 
Flower foods Investor Presentation
Flower foods Investor PresentationFlower foods Investor Presentation
Flower foods Investor Presentationearningsreport
 
Paypal: The Global Internet Payment Network
Paypal: The Global Internet Payment NetworkPaypal: The Global Internet Payment Network
Paypal: The Global Internet Payment Networkinvestorrelation
 
bristol myerd squibb Merrill Lynch Global Pharmaceutical Conference
bristol myerd squibb Merrill Lynch Global Pharmaceutical Conferencebristol myerd squibb Merrill Lynch Global Pharmaceutical Conference
bristol myerd squibb Merrill Lynch Global Pharmaceutical Conferencefinance13
 
wyeth Deutsche Bank 32nd Annual Health Care Conference
wyeth 	Deutsche Bank 32nd Annual Health Care Conferencewyeth 	Deutsche Bank 32nd Annual Health Care Conference
wyeth Deutsche Bank 32nd Annual Health Care Conferencefinance12
 
Wal Mart Store FinancialAugust 09/06/07
Wal Mart Store FinancialAugust 	09/06/07Wal Mart Store FinancialAugust 	09/06/07
Wal Mart Store FinancialAugust 09/06/07finance1
 
PepsiCo & Coke Comparative Study
PepsiCo & Coke Comparative StudyPepsiCo & Coke Comparative Study
PepsiCo & Coke Comparative StudyKaran Bhagatwala
 
Wal Mart Store FinancialMarch 04/12/07
Wal Mart Store FinancialMarch 	04/12/07Wal Mart Store FinancialMarch 	04/12/07
Wal Mart Store FinancialMarch 04/12/07finance1
 
Foodservice Fundamentals Fast Track: Introduction to the Foodservice Industry
Foodservice Fundamentals Fast Track: Introduction to the Foodservice IndustryFoodservice Fundamentals Fast Track: Introduction to the Foodservice Industry
Foodservice Fundamentals Fast Track: Introduction to the Foodservice Industryifmaworld
 
What is the future of instore brand performance consumer behaviour
What is the future of instore brand performance  consumer behaviourWhat is the future of instore brand performance  consumer behaviour
What is the future of instore brand performance consumer behaviourLindaSidia
 

Similar to Food marketing in 2009 (20)

Publishing excel charts and power points presentation
Publishing excel charts and power points presentationPublishing excel charts and power points presentation
Publishing excel charts and power points presentation
 
Publishing excel charts and power points presentation
Publishing excel charts and power points presentationPublishing excel charts and power points presentation
Publishing excel charts and power points presentation
 
Publishing excel charts and power points presentation
Publishing excel charts and power points presentationPublishing excel charts and power points presentation
Publishing excel charts and power points presentation
 
Kom klinic 2012 finala
Kom klinic 2012 finalaKom klinic 2012 finala
Kom klinic 2012 finala
 
What They Want: Insights into why Canadians Shop Direct
What They Want: Insights into why Canadians Shop DirectWhat They Want: Insights into why Canadians Shop Direct
What They Want: Insights into why Canadians Shop Direct
 
2012 canada market overview presentation
2012 canada market overview presentation   2012 canada market overview presentation
2012 canada market overview presentation
 
Wal Mart Store Financial ResultsMay 06/05/08
Wal Mart Store Financial ResultsMay 06/05/08Wal Mart Store Financial ResultsMay 06/05/08
Wal Mart Store Financial ResultsMay 06/05/08
 
Cold-chain Market prospects in India
Cold-chain Market prospects in IndiaCold-chain Market prospects in India
Cold-chain Market prospects in India
 
Flower foods Investor Presentation
Flower foods Investor PresentationFlower foods Investor Presentation
Flower foods Investor Presentation
 
Bemis mar13brief
Bemis mar13briefBemis mar13brief
Bemis mar13brief
 
Paypal: The Global Internet Payment Network
Paypal: The Global Internet Payment NetworkPaypal: The Global Internet Payment Network
Paypal: The Global Internet Payment Network
 
CAGNY 2006
CAGNY 2006CAGNY 2006
CAGNY 2006
 
bristol myerd squibb Merrill Lynch Global Pharmaceutical Conference
bristol myerd squibb Merrill Lynch Global Pharmaceutical Conferencebristol myerd squibb Merrill Lynch Global Pharmaceutical Conference
bristol myerd squibb Merrill Lynch Global Pharmaceutical Conference
 
wyeth Deutsche Bank 32nd Annual Health Care Conference
wyeth 	Deutsche Bank 32nd Annual Health Care Conferencewyeth 	Deutsche Bank 32nd Annual Health Care Conference
wyeth Deutsche Bank 32nd Annual Health Care Conference
 
Wal Mart Store FinancialAugust 09/06/07
Wal Mart Store FinancialAugust 	09/06/07Wal Mart Store FinancialAugust 	09/06/07
Wal Mart Store FinancialAugust 09/06/07
 
PepsiCo & Coke Comparative Study
PepsiCo & Coke Comparative StudyPepsiCo & Coke Comparative Study
PepsiCo & Coke Comparative Study
 
Wal Mart Store FinancialMarch 04/12/07
Wal Mart Store FinancialMarch 	04/12/07Wal Mart Store FinancialMarch 	04/12/07
Wal Mart Store FinancialMarch 04/12/07
 
Foodservice Fundamentals Fast Track: Introduction to the Foodservice Industry
Foodservice Fundamentals Fast Track: Introduction to the Foodservice IndustryFoodservice Fundamentals Fast Track: Introduction to the Foodservice Industry
Foodservice Fundamentals Fast Track: Introduction to the Foodservice Industry
 
Fecofar Portugal
Fecofar PortugalFecofar Portugal
Fecofar Portugal
 
What is the future of instore brand performance consumer behaviour
What is the future of instore brand performance  consumer behaviourWhat is the future of instore brand performance  consumer behaviour
What is the future of instore brand performance consumer behaviour
 

Recently uploaded

Powerpoint showing results from tik tok metrics
Powerpoint showing results from tik tok metricsPowerpoint showing results from tik tok metrics
Powerpoint showing results from tik tok metricsCaitlinCummins3
 
Innomantra Viewpoint - Building Moonshots : May-Jun 2024.pdf
Innomantra Viewpoint - Building Moonshots : May-Jun 2024.pdfInnomantra Viewpoint - Building Moonshots : May-Jun 2024.pdf
Innomantra Viewpoint - Building Moonshots : May-Jun 2024.pdfInnomantra
 
What is paper chromatography, principal, procedure,types, diagram, advantages...
What is paper chromatography, principal, procedure,types, diagram, advantages...What is paper chromatography, principal, procedure,types, diagram, advantages...
What is paper chromatography, principal, procedure,types, diagram, advantages...srcw2322l101
 
(( wa 0851/7541/5434 )) Jual Obat Aborsi Di Surabaya - Cytotec Misoprostol 20...
(( wa 0851/7541/5434 )) Jual Obat Aborsi Di Surabaya - Cytotec Misoprostol 20...(( wa 0851/7541/5434 )) Jual Obat Aborsi Di Surabaya - Cytotec Misoprostol 20...
(( wa 0851/7541/5434 )) Jual Obat Aborsi Di Surabaya - Cytotec Misoprostol 20...Spesiialis Kandungan BPOM
 
Guide to Networking Essentials 8th Edition by Greg Tomsho solution manual.doc
Guide to Networking Essentials 8th Edition by Greg Tomsho solution manual.docGuide to Networking Essentials 8th Edition by Greg Tomsho solution manual.doc
Guide to Networking Essentials 8th Edition by Greg Tomsho solution manual.docssuserf63bd7
 
Presentation4 (2) survey responses clearly labelled
Presentation4 (2) survey responses clearly labelledPresentation4 (2) survey responses clearly labelled
Presentation4 (2) survey responses clearly labelledCaitlinCummins3
 
PitchBook’s Guide to VC Funding for Startups
PitchBook’s Guide to VC Funding for StartupsPitchBook’s Guide to VC Funding for Startups
PitchBook’s Guide to VC Funding for StartupsAlejandro Cremades
 
NewBase 17 May 2024 Energy News issue - 1725 by Khaled Al Awadi_compresse...
NewBase   17 May  2024  Energy News issue - 1725 by Khaled Al Awadi_compresse...NewBase   17 May  2024  Energy News issue - 1725 by Khaled Al Awadi_compresse...
NewBase 17 May 2024 Energy News issue - 1725 by Khaled Al Awadi_compresse...Khaled Al Awadi
 
Blinkit: Revolutionizing the On-Demand Grocery Delivery Service.pptx
Blinkit: Revolutionizing the On-Demand Grocery Delivery Service.pptxBlinkit: Revolutionizing the On-Demand Grocery Delivery Service.pptx
Blinkit: Revolutionizing the On-Demand Grocery Delivery Service.pptxSaksham Gupta
 
wagamamaLab presentation @MIT 20240509 IRODORI
wagamamaLab presentation @MIT 20240509 IRODORIwagamamaLab presentation @MIT 20240509 IRODORI
wagamamaLab presentation @MIT 20240509 IRODORIIRODORI inc.
 
Progress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdf
Progress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdfProgress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdf
Progress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdfHolger Mueller
 
Creative Ideas for Interactive Team Presentations
Creative Ideas for Interactive Team PresentationsCreative Ideas for Interactive Team Presentations
Creative Ideas for Interactive Team PresentationsSlidesAI
 
How to refresh to be fit for the future world
How to refresh to be fit for the future worldHow to refresh to be fit for the future world
How to refresh to be fit for the future worldChris Skinner
 
Jual Obat Aborsi Di Sibolga wa 0851/7541/5434 Cytotec Misoprostol 200mcg Pfizer
Jual Obat Aborsi Di Sibolga wa 0851/7541/5434 Cytotec Misoprostol 200mcg PfizerJual Obat Aborsi Di Sibolga wa 0851/7541/5434 Cytotec Misoprostol 200mcg Pfizer
Jual Obat Aborsi Di Sibolga wa 0851/7541/5434 Cytotec Misoprostol 200mcg PfizerPusat Herbal Resmi BPOM
 
Elevate Your Online Presence with SEO Services
Elevate Your Online Presence with SEO ServicesElevate Your Online Presence with SEO Services
Elevate Your Online Presence with SEO ServicesHaseebBashir5
 
5 Brilliant Ways To Buy Verified Payoneer Accounts In 2024
5 Brilliant Ways To Buy Verified Payoneer Accounts In 20245 Brilliant Ways To Buy Verified Payoneer Accounts In 2024
5 Brilliant Ways To Buy Verified Payoneer Accounts In 2024https://localsmmshop.com/
 
Creating an Income Statement with Forecasts: A Simple Guide and Free Excel Te...
Creating an Income Statement with Forecasts: A Simple Guide and Free Excel Te...Creating an Income Statement with Forecasts: A Simple Guide and Free Excel Te...
Creating an Income Statement with Forecasts: A Simple Guide and Free Excel Te...Aurelien Domont, MBA
 
hyundai capital 2023 consolidated financial statements
hyundai capital 2023 consolidated financial statementshyundai capital 2023 consolidated financial statements
hyundai capital 2023 consolidated financial statementsirhcs
 
Global Internal Audit Standards 2024.pdf
Global Internal Audit Standards 2024.pdfGlobal Internal Audit Standards 2024.pdf
Global Internal Audit Standards 2024.pdfAmer Morgan
 

Recently uploaded (20)

Powerpoint showing results from tik tok metrics
Powerpoint showing results from tik tok metricsPowerpoint showing results from tik tok metrics
Powerpoint showing results from tik tok metrics
 
Innomantra Viewpoint - Building Moonshots : May-Jun 2024.pdf
Innomantra Viewpoint - Building Moonshots : May-Jun 2024.pdfInnomantra Viewpoint - Building Moonshots : May-Jun 2024.pdf
Innomantra Viewpoint - Building Moonshots : May-Jun 2024.pdf
 
What is paper chromatography, principal, procedure,types, diagram, advantages...
What is paper chromatography, principal, procedure,types, diagram, advantages...What is paper chromatography, principal, procedure,types, diagram, advantages...
What is paper chromatography, principal, procedure,types, diagram, advantages...
 
(( wa 0851/7541/5434 )) Jual Obat Aborsi Di Surabaya - Cytotec Misoprostol 20...
(( wa 0851/7541/5434 )) Jual Obat Aborsi Di Surabaya - Cytotec Misoprostol 20...(( wa 0851/7541/5434 )) Jual Obat Aborsi Di Surabaya - Cytotec Misoprostol 20...
(( wa 0851/7541/5434 )) Jual Obat Aborsi Di Surabaya - Cytotec Misoprostol 20...
 
Guide to Networking Essentials 8th Edition by Greg Tomsho solution manual.doc
Guide to Networking Essentials 8th Edition by Greg Tomsho solution manual.docGuide to Networking Essentials 8th Edition by Greg Tomsho solution manual.doc
Guide to Networking Essentials 8th Edition by Greg Tomsho solution manual.doc
 
Presentation4 (2) survey responses clearly labelled
Presentation4 (2) survey responses clearly labelledPresentation4 (2) survey responses clearly labelled
Presentation4 (2) survey responses clearly labelled
 
PitchBook’s Guide to VC Funding for Startups
PitchBook’s Guide to VC Funding for StartupsPitchBook’s Guide to VC Funding for Startups
PitchBook’s Guide to VC Funding for Startups
 
NewBase 17 May 2024 Energy News issue - 1725 by Khaled Al Awadi_compresse...
NewBase   17 May  2024  Energy News issue - 1725 by Khaled Al Awadi_compresse...NewBase   17 May  2024  Energy News issue - 1725 by Khaled Al Awadi_compresse...
NewBase 17 May 2024 Energy News issue - 1725 by Khaled Al Awadi_compresse...
 
Blinkit: Revolutionizing the On-Demand Grocery Delivery Service.pptx
Blinkit: Revolutionizing the On-Demand Grocery Delivery Service.pptxBlinkit: Revolutionizing the On-Demand Grocery Delivery Service.pptx
Blinkit: Revolutionizing the On-Demand Grocery Delivery Service.pptx
 
(推特)Twitter账号批发(自助购买网址🎉top233.com🎉)
(推特)Twitter账号批发(自助购买网址🎉top233.com🎉)(推特)Twitter账号批发(自助购买网址🎉top233.com🎉)
(推特)Twitter账号批发(自助购买网址🎉top233.com🎉)
 
wagamamaLab presentation @MIT 20240509 IRODORI
wagamamaLab presentation @MIT 20240509 IRODORIwagamamaLab presentation @MIT 20240509 IRODORI
wagamamaLab presentation @MIT 20240509 IRODORI
 
Progress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdf
Progress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdfProgress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdf
Progress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdf
 
Creative Ideas for Interactive Team Presentations
Creative Ideas for Interactive Team PresentationsCreative Ideas for Interactive Team Presentations
Creative Ideas for Interactive Team Presentations
 
How to refresh to be fit for the future world
How to refresh to be fit for the future worldHow to refresh to be fit for the future world
How to refresh to be fit for the future world
 
Jual Obat Aborsi Di Sibolga wa 0851/7541/5434 Cytotec Misoprostol 200mcg Pfizer
Jual Obat Aborsi Di Sibolga wa 0851/7541/5434 Cytotec Misoprostol 200mcg PfizerJual Obat Aborsi Di Sibolga wa 0851/7541/5434 Cytotec Misoprostol 200mcg Pfizer
Jual Obat Aborsi Di Sibolga wa 0851/7541/5434 Cytotec Misoprostol 200mcg Pfizer
 
Elevate Your Online Presence with SEO Services
Elevate Your Online Presence with SEO ServicesElevate Your Online Presence with SEO Services
Elevate Your Online Presence with SEO Services
 
5 Brilliant Ways To Buy Verified Payoneer Accounts In 2024
5 Brilliant Ways To Buy Verified Payoneer Accounts In 20245 Brilliant Ways To Buy Verified Payoneer Accounts In 2024
5 Brilliant Ways To Buy Verified Payoneer Accounts In 2024
 
Creating an Income Statement with Forecasts: A Simple Guide and Free Excel Te...
Creating an Income Statement with Forecasts: A Simple Guide and Free Excel Te...Creating an Income Statement with Forecasts: A Simple Guide and Free Excel Te...
Creating an Income Statement with Forecasts: A Simple Guide and Free Excel Te...
 
hyundai capital 2023 consolidated financial statements
hyundai capital 2023 consolidated financial statementshyundai capital 2023 consolidated financial statements
hyundai capital 2023 consolidated financial statements
 
Global Internal Audit Standards 2024.pdf
Global Internal Audit Standards 2024.pdfGlobal Internal Audit Standards 2024.pdf
Global Internal Audit Standards 2024.pdf
 

Food marketing in 2009

  • 1. Food Marketing in 2009 Marie-Claude Michaud Business Strategy Consultant www.dancause.net FCC – SIAL Montréal April 1, 2009
  • 2. Retail food market INDUSTRY EVOLUTION AND TRENDS
  • 3. Evolution of the food distribution industry In recent decades, the food distribution industry has   undergone a significant wave of consolidation. •  Increase in average sales per company from $4 to $11 billion Ten years ago, there were 45 public companies in the   North American food distribution sector. •  Now – just over 20
  • 4. Quebec’s retail food sales market is dominated by three distributors Market Share Company Quebec Canada Supermarkets All Food Supermarkets All Food Loblaws (Provigo) 36% 30% 41% 33% 93% 78% 20% 76% 15% 60% Sobeys (IGA) 30% 26% Metro (A&P) 27% 22% 15% 12% Safeway - - 8% 7% Overwaitea - - 6% 5% Wal-Mart - 5% - 6% Costco - 9% - 7% Other 7% 8% 10% 15% Source: CIBC World Markets
  • 5. But the food supply has become more fragmented… Supermarkets are losing market share   Estimated retail food sales by network Canada – 2007-2008 Market Sales Type of business Growth share ($ million) Supermarkets $61,390 4% 80.4% Pharmacies $1,630 7% 2.1% Warehouse clubs $5,100 5% 6.7% Discount stores $4,115 11% 5.4% Convenience stores $3,680 2% 4.8% Other $415 14% 0.5% TOTAL $76,330 5% Sources: CIBC World Markets, Statistics Canada
  • 6. Competition is increasing In Ontario, supercentres have transformed the competitive   landscape. Increase – In-store Growth in food sales* food purchases Canada Canada Ontario Quebec 7.7% 3.3% 3.2% 4.2% Per capita food store spending 2007 2008 Canada 8.5% 8.4% Ontario 6.8% 6.7% Quebec 9.9% 10.1% * Supermarkets and convenience stores Source: Canadian Grocer, February 2009
  • 7. But the current crisis should be good for grocers Net income for the major chains increased significantly in the   last fiscal quarter Consumers are eating out less   However, consumers who didn’t eat out before the crisis will   also try to reduce spending and, more than ever, will be looking for bargains Sales are expected to increase 3.1% in Canada in 2009*   How much will profits increase? •  *Canadian Grocer, February 2009
  • 8. Explosion of private labels The increase in the number of products carried under private   labels, particularly in the premium segment, has clearly improved the position of the major chains. Trying to compete, Metro and Sobeys have been particularly   aggressive. •  Sobeys launched 4,800 new Compliments-brand products in its 2008 fiscal year.* •  Metro announced that it will launch over 2,000 new products in the next year. Faced with category leaders and private labels, what niche can Quebec SMEs carve? *12 months ending May 3, 2008
  • 9. Fragmentation of consumption   •  Educated, informed and busy •  Care for their health AND want good food •  Concerned about the environment •  Worried about pesticides, GMOs, food poisoning, heart disease, cancer, etc. •  Desire for organic food products •  Price sensitive   The one-size-fits-all approach to food marketing no longer works for them.
  • 10. The traditional supermarket is adapting slowly Major chains are not as well positioned to serve this “new   market”: •  They don’t have the flexibility to adapt their product and service line-up quickly “Micro-segments” are generally less attractive to the big   industry players •  Big companies—both retail and manufacturing—are structured to produce and distribute large volumes “The consumer is the boss.”  
  • 11. The retail food industry is polarizing Specialty stores Big box stores CUSTOMER focus PRICE focus Bikes Bikes $6,000 $150 •  Volume and standardization •  Specialty and exclusive products •  Commodities •  Value-added products and services •  Price wars •  Attentive to the customer •  Standard courtesy •  Customer intimacy
  • 12. Opportunity for small players Like other retail sectors, the retail food sector is   restructuring: •  Rebirth of specialty shops Market maturity and diversification of consumer tastes mean   that the “categories” of growth products are generally smaller. Small businesses are energized by the “new consumer” and   are trying to be innovative and exclusive.
  • 13. Small businesses – stores of the future? Neighbourhood grocery stores and specialty food stores are   closer to their customers and better positioned to meet their expectations and create a close relationship with them Two main factors are fostering the growth in the number of   small specialty shops •  Information technology •  Demographic shifts
  • 14. Small businesses A FEW STRATEGIES FOR BREAKING INTO THE MARKET…
  • 15. Develop a unique feature Develop a unique expertise or product that cannot be   reproduced on a large scale •  Complexity of implementation and impossibility of industrial production protect small from big players This strategy has two constraints:   •  Places the company in market segments that value this type of product and involves specific and selective marketing •  Mandates a high price strategy
  • 16. Increase the barriers to entry This strategy is based on developing a protected brand that   guarantees origin or quality of the product based on rigorous specifications Means of controlling the number of potential entrants   Focus on consumer recognition and value of the label   Examples:   •  Agneau de Charlevoix: protected geographical indication (PGI) approved •  Ice cider: approval pending
  • 17. Set yourself apart In mature markets or undifferentiated product categories,   focus on innovation •  Trademark –  Bella tomatoes by Demers or Veau de Charlevoix •  Different, attractive and/or practical packaging –  La Tomate’s tubes Inject energy into a product category lacking in innovation   •  E.g.: Europe Best (frozen fruit) a few years ago… Dare to go where the big players never invest…   •  Nutra-Fruits cranberry-based product line
  • 18. Cultivate a regional identity Avoid spreading resources thin by focusing most   development activities in region of origin Maximize benefits of proximity:   •  Reduce advertising costs through local word of mouth •  Knowledge of customer needs and habits •  Personal business relationships rather than formal or contractual ones •  Ability to respond quickly and adapt to change
  • 19. Build partnerships With a customer   •  E.g.: La Meunerie Milanaise and Première Moisson With another processor   •  Distribution - manufacturing – sale of complementary products With a distributor or retailer   •  Exclusive or customized products With producers   •  Regional label products With regional businesses or organizations   •  Develop a label, portal-type Web site, shared booths at regional events
  • 20. Looking ahead… Basic trends favour small producers and food processors   •  Consumers are looking for premium, different, Quebec-origin products… •  Small retailers can set themselves apart by offering unique, innovative, quality products from here… •  Growth in food sales in specialty, gourmet, organic, regional, health niches, etc. is higher than the industry average… •  Specialty neighbourhood shops are booming…
  • 21. Medium and large businesses WHAT IS THE RIGHT WAY?
  • 22. Forced to innovate… Between the inevitable rise of private brands…   •  In the U.S., just 9% of consumers believe that national brand products are better than private labels and 60% believe that they are manufactured in the same factories as national brands.* … and the trend pushing consumers towards food products   perceived as better quality,* all brands combined Despite the current economic context that slows but does   not change these basic trends *The Hartman Group, Contemporary Food Trends, 2008
  • 23. New definition of quality Products with a “history” – origin, producer/manufacturer or   method of production Packaging that signals quality (transparent, matte finish,   etc.) Products manufactured using fewer, better-quality   ingredients Products for the more adventurous palate   Products that seem less industrial, less mass-produced   Source:The Hartman Group, Contemporary Food Trends, 2008
  • 24. SIAL Paris 2008 TRENDS IN INNOVATION
  • 25. Trends in food innovation MAJOR CATEGORIES 43% 24% 17% 14% 1% PLEASURE CONVENIENCE HEALTH FITNESS ETHICS Time-saving Natural Slimness Environment Fun Energy / Handling Vegetarian Citizenship Exoticism Well-being Sensory Portability Medical Cosmetic variety Sophistication SIAL Paris – 2008; Identified by XTC
  • 26. Trends: product handling – time saving – sensory variety SIAL - Paris 2008 Selections Roast veal in juices Individual sauce packets Ready after 10 seconds in the microwave
  • 27. Other examples of the 350 innovations selected at SIAL Paris 2008 Slimness - Sophistication Product handling – Sensory variety For co-branding and new format Italian french fries with 1% virgin olive oil, bake in the oven. Breaded chicken or ham sticks stuffed with La Vache Qui Rit cheese
  • 28. Grand Prix 2008 – SIAL Paris 2008 Pastry dough… in sweet or salty flavours! Selected for the flavours that provide a base for new and original pie recipes Innovation Sensory variety – Time saving Taste of Provence – tomato and oregano Chocolate
  • 29. NAVIGATING THE PRESENT AND CHARTING THE FUTURE…
  • 30. Don’t minimize the importance of marketing Follow up, be proactive and innovate   •  Identify opportunities and risks •  Reassess your price strategies regularly •  Increase product development initiatives Get to know the consumer better*   •  68% change brands regularly •  5% are loyal to one brand •  73% shop in at least five types of stores •  26% are loyal to one merchant in particular *U.S. data Source: GMA - Deloitte,Shopper Marketing 2007
  • 31. “Shopper marketing” or the importance of the store… 70% of buying decisions are made in the store.   68% of in-store purchases are unplanned.   The shopper is not necessarily the consumer…   “Shopper marketing” still a vague concept but growing in   importance: •  In recent years, U.S. manufacturers and retailers have increased marketing spending by 2%.* •  Increased spending on “shopper marketing”:  Manufacturers: +21%  Retailers: +26% * Estimated average annual growth rate 2004-2010 Source: GMA - Deloitte,Shopper Marketing 2007
  • 32. Rethinking your marketing mix? Get started or solidify a base in “shopper marketing”   •  You don’t need to do it all, but do something •  Know your customers and their strategies and become their partner  Retailers are becoming more effective and sophisticated marketers Invest in your consumer and shopper knowledge   Align your initiatives with the retailer’s objectives and marketing   plan Develop innovative marketing plans tailored to every major   customer
  • 33. Questions? Comments? Marie-Claude Michaud Business Strategy Consultant www.dancause.net FCC – SIAL Montréal April 1, 2009