Growers and suppliers need to prepare for a rocky road ahead as unprecedented volatility in the grocery sector looks set to continue.
Professor David Hughes, emeritus professor of food marketing at Imperial College London, issued the warning at a new forum for businesses involved in Kent’s food and drink sector that met for the first time in May.
Delegates at the Feed the Mind event heard how the recession, changing weather patterns, technology, loss of consumer confidence, demographics, higher commodity prices and increasing competition are posing tough new challenges to the sector.
“We are in a business where we are going to have to manage volatility,” said Hughes, “whether it be for our ingredients or the prices we can command.”
His lecture, entitled Trends in the Food & Drink Industry: Buckle Seat Belt and Fit Crash Hat took a global overview of how the food sector is changing.
Professor Hughes said one such change, a shift in consumer habits fuelled by the horsemeat scandal, presented another set of challenges – and opportunities – for the food sector.
He told delegates that EU governments are threatening legislation to tackle the health consequences arising from salt, fat and sugar consumption, and that, since the horsemeat scandal, businesses have seen what could happen to sales when the integrity of a brand is compromised.
However, the food industry is reacting, and that may be good news for suppliers. Hughes added: “I think we are going to see much less promiscuity in sourcing suppliers, with shorter supply chains and much longer relationships even down to micro-ingredients.
“There’s an interesting convergence of people wanting value – a great deal – but also being interested in values such as ethics, sustainability and provenance. The green bar is going up and up and up. That poses a challenge but being green gives you a ticket to enter premium markets. Being green on its own is not enough, though. What delivers the premium is great tasting product and provenance – something that Kent and UK producers are well placed to deliver.”
The lecture from Professor Hughes was the first in a planned series of similar events being organised by event sponsors Kent Business School, Vertex Law and accountancy firm Crowe Clark Whitehill.
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