Professor David Hughes The reality of the food and drink industry

Transcription

1 Professor David Hughes The reality of the food and drink industry

2 Global and Local Key Messages for Food & Drink Businesses Dr. David Hughes Emeritus Professor of Food Marketing Kent Food & Drink Conference 2018 The University of Kent Canterbury, Kent, United Kingdom Tuesday, April 24 th,

3 A Great Idea Which Leaves You Thinking: Why Didn t Somebody Do This Before?! Fever Tree Has a Market Cap. of 3.1 bn.!

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6 Farmers are Fashionable But Not Every Farmer Should Meet a Consumer!

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8 Epic Founded in 2013 Sales of $20 m in 2015 Sold to General Mills for approx. $100 million 2016

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10 Chinese Cities with the Purchasing Powers of Countries!

11 Global Differences In What Shoppers Value in Meat

12 White Fish Fillet & Chicken Breast Head-to-Head Competitors Worldwide Both Approx. US$3/kg. ( 2.20)

13 Where Are We On the International Food Landscape? Let s List English Food and Drink Products Which Are Internationally Famous. Shall We Do It Alphabetically Or As They Come To Mind? Food is Front of Mind When Foreigners Think of France and Italy. For Us, England Conjures Up Images of London, The Queen, Premier League Soccer, Castles/Countryside/Tradition/Still Princess Di and, maybe Fish & Chips!

14 Leveraging French Food Culture in China & HK B2C Platform

15 What s The Story Wrapped Around Your Chicken? How d You Like Your Chicken? With Adjectives, Please : free-range.; known provenance Farmer Smith. Kent Legbar. rare breed (Silkie) slow-growing vegetarian diet organic.. Omega-3 rich... happy environmentally-friendly

16 College-Educated Pigs Exclusively Used for Waitrose! The Margin is in the Adjectives not the Noun

17 That s 72 for a 200 grm. steak before you add the fries!

18 Single diners 42 2 diners 36 3 diners 11 4 or more diners mins mins mins mins 5% more For healthy 22% more For better taste Considerably more For ready made meal solution! Source: Kantar Worldpanel UK

19 Albert Heijn s One-a-Day Egg Pack. Remember, 30+% of Northern European urban households are 1 person!* * 30+% of Big City Aussie Households are 1 Person, Too

20 Not Designed for 1 or 2 Person Households!

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23 Of All the Attributes of the Millennial Consumer, Patience is NOT One! How Long is Their Web Attention Span? 3 sec. 52% loss Ms. Veruca Salt (Courtesy of Charlie & the Chocolate Factory) Source: Roald Dahl, 1964

24 Younger Consumers Eat Out Most Frequently in the UK

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26 Pardon My Blasphemy!

27 Specially Blended Tea for Use with Non-Dairy Dairy!

28 Bailey s Irish Almond Cream!

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31 Powerful Global Consumer Trends

32 OECD Obesity League Table 2016 Australia Just Out of The Medal Positions!

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34 Two Cheers for Kellogg s UK: So, Why Didn t You Do This Before? Anticipating the UK Sugar Tax Introduced April 6 th, 2018 November 30 th, 2017

35 Food Retailers Respond to Customer Concerns About Health

36 Men are Interested in Healthier Eating and in Flexitarian Meal Options

37 The Number 1 Global Mega Consumer Trend is the Increasing Concern About The Health of the Family and The Health of the Planet. When Food Shopping, Drives Shoppers Towards Mindful Choices * And a Widespread View that Big Food, Big Business, Big Government are Part of the Problem NOT Part of the Solution Mindful Choices top food trend for 2018, Innova Market Insights, Nov. 2017

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39 Expect Accelerated Regulation on Recycling of Packaging in the Food & Beverage Industry

40 UK and Other Markets: We ve Reached The Tipping Point on Recycling Issues Huge Implications for F&B

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42 February 17 th, 2018

43 Source: Bob Langert, Big Dutchman Industry Networking Forum, Malaysia, March 2017

44 Source: Bob Langert, Big Dutchman Industry Networking Forum, Malaysia, March 2017

45 Don t Mess with The Panda. She s Got a Big Stick and She ll Beat You Up!

46 They Seek Reassurance on the Safety and Integrity of Their Food

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48 Powerful Global Consumer Trends

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50 Three Meal Solutions For 2 People for 10. That s Tues-Thursday sorted for 1.67 per person per meal VERY good value

51 Lunch for 3 How Low Can You Go?!: sandwich bag of fruit slices drink But where s the fresh produce? Often, metres away in the Fresh Produce Dept. HOPELESS!

52 Food Products Presented By Meal or Snack Type NOT by Product Category

53 Astonishing Value 10 Meal Deal For 2 Prawn Cocktail (Heston Blumenthal) Chicken Breast with Prosciutto + Asparagus Parmentier Potatoes 4 x Peroni Beers

54 Anthropomorphism Rules in the UK! Fresh Pet Food Sales to Sky Rocket The Market for Chilled Ready Meals for Pets is Set to Sky Rocket!

55 UK Ready Meal Market, 2017 Type Million 2017/2016 % English 1, Italian Indian Chinese American French Spanish Thai Japan/VN/MY Greek Total 3,182 million* * 2.25/week/household spend on ready meals Source: Kantar Worldpanel, 52 w/e Nov 6, 2017

56 The Global Grocery World Has Entered a Disruptive Period

57 Changes* in Grocery Market Share by Channel UK % Change Hypermarkets Supermarkets Convenience Discount Online Other % Shopping in Big Barns Less Often and Buying Less per visit. Hard Discount, On-Line and Convenience Winning the Day * IGD Forecast, 2017 Source: IGD, 2017 * forecasts

58 Food Industry Analysts Predict Tough Times for Supermarkets Supervalu Stock Price Dismal Performance

59 How Much Market Share Can Aldi (and Lidl?) Take in the Australian Grocery Market?

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61 Hard Discounter Super 6 Has A Significant Impact On Fresh Produce Buying Behaviour and on Retailer Price Competition

62 Both Aldi and Lidl have a Formidable Premium Range for Meats

63 Who s Leading the Way in On-Line Grocery? Why? (and don t go to the USA for on-line leadership!)

64 Kantar Worldpanel and Mintel, 2017

65 Grocery Delivery Options Proliferate in the UK

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67 August, 2017

68 Market Capitalization of Some Major Grocery Retailers (US$ bn)* $664 bn. $455 bn. $252 bn. $80 bn. ** $27 bn. $28 bn. $16 bn. * as of April 4 th, 2018 ** Woolies Australia

69 Market Cap Amazon $629 bn. and Sainsbury s $9 bn. January 12 th,

70 Oct/Nov 2017

71 For Major Supermarket Companies around the World: The Future is Omni-Channel. One Product Does Not Fit All Channels!

72 Supermarket Store Configuration is Changing

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75 For Theatre in Grocery Retail and Food-to-Go Concepts Take a Look in Asia: Here s Ben s in KL

76 UK Food-to-Go Value to Soar in Next Five Years Change CAGR* billion billion +% +% Food-to-Go Specialists Quick Service Restaurants Coffee Specialists Convenience & Forecourts Super/Hypermarkets Total * CAGR: Compound Annual Growth Rate After Decades of Major Supermarkets Dominating Fresh Produce Companies Customer Bases, Food Service Customers Becoming Increasingly Influential Source: IGD, UK. 2017

77 Food-to-Go Accelerates the Convergence of Food Retail & Food Service

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79 Increasing Competition for Share of Stomach from Non-Grocery Outlets. Boots have a Health Halo.

80 This Newsagent Chain is a Major Vendor of Snacks and Mini-Meals in the UK

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82 Amazon Opens Its 1 st Check Out-Free Food Store, Seattle, USA (12/17)

83 Where Am I? Huge Hot & Cold Beverage + Snack Offering

84 Healthy Food Offer

85 Asian and Western Food & Beverages

86 Noodle Bar

87 Hong Kong

88 Meal Kit Companies: New Customers for Fresh Food But Do They Have Long-Term Commercial Legs?

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92 The Guardian Oct. 28 th 2017

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94 UberEats Delivery Partnership with McDonalds in USA, Western Europe, Australia

95 Evolution of Starbucks Logo 30+% of all US sales made using Starbucks app Virtually US ALL same store sales growth digital Globally planning to double food business by 2021 Particular expansion of premium food and drink lines Expanding Bistro Boxes and Reserve Cafés (20% y-o-y growth 2016/18) Focus on cold drinks (50% of drink sales 2017/18) Market leader in cold brewed coffee in USA China expansion: 800 cafés in 2013 to 3200 end of st Reserve Roastery opened in Shanghai Dec Opening a new café in China every 15 hours! Currently, 600 in Shanghai Keeping shareholders sweet returning $15 bn. cash over next 3 years Source: Starbucks, March 20 th, 2018

96 Danone VC Arm Buys into Farmer s Fridge Franchise Vending Business in USA

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99 Here s Some Concluding Comments to Mull Over! give or take, we re 65% self-sufficient in food products which can be produced in the UK and this % is declining our food and drink export-import picture is dominated by trade to and from the other EU countries (volume/value of both increasing over time) our best market is right here at home consumers know us and largely trust us. Our EU neighbours are a terrific second best market on wider international markets, we re not the lowest cost producer of any food product. We must: target premium sectors; with products that are in harmony with global consumer trends; have compelling stories that translate/are relevant to our target markets; fully traceable & transparent it s a great time for start-up smart, agile smaller food & drink companies Carpe Diem and don t dismiss support from VC arms of Big Food cos.

100 CONTACT POINTS: Telephone contact: mobile: +44(0)7798 Retail Blog: