Hello and welcome to Category Vision magazine for F.M.C.G. professionals.
This year we are taking a good look at two key areas of development for the industry; the consumer and the point of purchase. Both have gone through significant change in 2013.
The consumer has less and is more savvy and the point of purchase has moved. This months retail figure will confirm that 31% of sales were made online. The stores who were early adopters of online made a healthy profit this Christmas but those who were late paid the price. Debenhams and Morrisons (due to launch later this year) have yet to embrace online. Next, John Lewis and Sainsburys had a great festive period helped by some great TV advertising.
However it has not all been about technology and online. 2013 was also about provenance. The likes of Tesco’s, Asda and own label producers were caught up in the horse meat issue. Suddenly the consumer became aware of what they were eating at the expense of who they were buying it from. Those with trusted reputations were at risk. Some recovered very well and others are still paying the price. Some like Lidl and Aldi even gained.
Towards the end of 2013 another trend started to emerge. Namely how healthily are we eating? Over the last five years we have seen global brands discretely move away from high sugar content messaging towards acquiring brands perceived to be more healthy. This trend will only continue as the global obesity index continues to grow. Ironically I was watching the Discovery channel last night. The programme showed you how to mass produce a 1 inch thick ice cream biscuit encased in chocolate. It was fascinating how mans ingenuity had managed to freeze, heat and freeze a biscuit in double quick time to avoid melting and then package the product 30 to a bag. The product was delivered to the grocery store freezer in refrigerated lorries from refrigerated warehouse.
Two big questions were left for me to ask and both were to do with legacy sustainability and obesity. How on earth did we train the body to enjoy that? Now that was my head talking. My emotions had me reaching for the IPad to stock my freezer. They looked great!
When the historians write this part of consumer history, we predict they will decide that 2009 was when consumers changed their habits. Why that date? The global recession was the key. With fear, doubt and uncertainty creeping into every home in the western world, household budgets were scrutinised in detail. Not since the Eighties had household income been examined so closely. Its worth remembering that the eighties were at least two consumer generations ago. Up until 2009 the modern consumer had little regard for consumer debt and household income. It was all about the investment opportunity. Everyone aspired to be a property developer, a landlord and dot com millionaire. Very few saw their career as meaning that much because you could always make more money investing in property.
But equally humans never learn from history. Didn’t we think the same in the 70’s with oil, the 80’s with equities, the 90’s with the internet and the millennium with property. In the 60’s our nation was flat broke as Europe recovered from the events of the 40’s. In the 50’s we had never had it so good. That was the last time the household budget was balanced. Maybe we can learn from history. Back then the High Street was booming, supermarkets were becoming common place and we were as close to full employment as we could be.
As we enter 2014 we can see we have a long way to go but we can also see that the High Street needs to be revitalised, the consumer has to reduce debt and that the household has to become more self reliant. How does that work in todays world. Over the next few moths we hope to show you.
David Edwards – Editor
PS. This magazine is all about interpretations. Some we will get right and some will fail. But we hope you come back to be entertained whilst you take your time to read.