Is Food and Drink Innovation Dead?
Eddie Stableford explores how a shift has taken place in food and drink innovation, away from the global conglomerates to entrepreneurial start-ups.
Times are changing within the world of food and beverage. It is clear that food and drink innovation from major brands is at an all-time low.
With this in mind, are larger brands becoming complacent, leaving the hard graft of innovation to smaller emerging brands? If so, why has this happened and what can we do to get out of this rut?
The Leisure F&B Expo is on its way; the place where the latest consumer trends are laid bear for you to snap up! Get your FREE tickets to the show to stay in-the-know, and harness the trends to boost customer experience and profits. For now, learn more about the standstill of food and drink innovation, here...
The Cost Cutting Trend
The trend of cost cutting that started in 2008 has gathered pace as the retail landscape has continued to change through the disruption of the discounters. The price pressure that their growth has placed on the established top five retailers has, in turn, seen all major brands put under margin pressure by their customers, as the trading environment has hardened. Inevitably, this has led to a focus on value engineering rather than true innovation, as brands have explored a myriad of cost reduction initiatives. This is often accompanied by price promotion marketing, which can only ever deliver a knee-jerk sales uplift before they slide towards their pre-promotion sales level.
Against this backdrop, consumers are more savvy than ever – constantly looking for not only the best value for money but critically, best value for time. One only has to look towards the demise of once-loved retail stores and restaurant chains to evidence consumers voting with their feet, as they seek better value for time elsewhere.
Achieving relevance and consumer engagement against this harsh backdrop is a challenge that major international conglomerates have turned their back on – choosing to leave innovation to new market entrants, and to ultimately purchase shining stars once they have undertaken the pioneering adventure and achieved success – Graze being the latest example following their acquisition by Unilever.
But of course, the opportunities for entrepreneurial brands are better than ever before. Technology can both fast track and reduce the cost of bringing new products to market.
Online is a fabulous, direct to consumer sales channel, often with reduced costs and higher margins. The likes of Amazon offer very effective third-party sales, logistics and provide funding support as a launch pad for new brands.
Is Food and Drink Innovation on the Horizon?
Whilst the price war continues amongst the established food retailers, the independent sector is experiencing new found growth, providing numerous opportunities for new market entrants with fabulous products that deliver on all levels. The growth in farmers markets, and the popularity of eclectic eateries that sell the ingredients used in dishes on their menu, are further opportunities for new and exciting products.
There are also growing signs that the major retailers are starting to turn their attention to differentiation, seeking out and supporting new brands with the potential to make them destination stores for consumers and specific demographics within them. The increase in vegan brands, and the size of their ranging within chilled in particular, is an example of this – as is the growth in gluten free products now on sale.
Non-dairy is another growth opportunity, not just attracting vegans, but also a broader demographic who are becoming more health focused with a realisation of we are what we eat. Nowhere is this more evident than in the explosion of interest in gut health products off the back of large research studies which have linked poor gut flora to depression, anxiety, Parkinsons, diabetes, obesity and even dementia.
Want to Innovate?
It is clear that the opportunities for pioneering brands are significant, and with increasing interest from investors in supporting new food brand concepts, the future looks bright indeed. With your FREE tickets to the Leisure F&B Expo, on 6th & 7th November at the NEC, Birmingham, you’ll have the opportunity to see where the most recent food and drink trends are heading. Stay one step ahead of the game, so you can keep customers coming through your door, whether you’re a holiday park, zoo, museum, cinema, or anything else in between!
For more information, get in touch with our partner, Brand Clock, using the details below:
COMPANY NAME: Brand Clock
PHONE: 0207 205 2998