There are a variety of opportunities for growing food and beverage businesses in 2017, but staying on top of changing customer needs, understanding millennial preferences, leveraging key technology strategies and being mindful of strategic acquisitions will all be essential in this competitive marketplace. From spicy foods to smartphones, what should businesses focus on for 2017?
Changing customer preferences
Spicy and exotic flavors, snacking and health and wellness are all at the forefront for consumer food preferences in 2017, and the millennial generation is frequently driving those choice options with their adventurous palates. Likewise, subscription food home delivery will continue to evolve, keeping in mind consumers’ wishes to be part of the meal-making process with easy-to-follow recipes and healthy, fresh and bold-tasting ingredients. Staying on top of these shifting lifestyles and preferences will be essential for relevant and successful food and beverage companies.
Mergers and acquisitions
Many companies in 2017 will add new product lines or introduce healthier products and ingredients to their existing foods and drinks. Yet, rather than developing these newer products within the business’ existing operations, more and more, we’re seeing companies acquire businesses that are producing the type of foods or ingredients they’re looking for. These acquisitions are frequently done at a lower cost than spending the time and resources in internal research and development (R&D) to create these newer products. In a sense, acquisition is the new R&D for many food and beverage companies wanting to enhance their product offerings and brand. Watch this brief video to learn more about industry mergers and acquisitions trends this year.
In recent years, consumer confidence in the safety of the U.S. food supply has declined. According to a recent International Food Information Council Foundation's Food & Health Survey, more than 70 percent of Americans have expressed concerns about the safe production of their food and beverages, and approximately 40 percent of consumers changed their diet because of perceived food-safety issues. The Centers for Disease Control and Prevention estimates that produce is the leading cause of food-related illnesses, attributable to 46 percent of contamination incidents in the United States, and beef and poultry are the leading causes of food-related deaths, attributable to 29 percent of contamination incidents. Clearly, there is much for food manufacturers to be concerned about regarding the safety of their food products. For many businesses, food safety and preventive efforts will continue to be top of mind in 2017.
The demand for online grocery delivery and subscription food services will continue to grow in 2017 as busy consumers show their preference for doorstep delivery. Fresh product delivery will grow in demand as well, like Amazon Fresh’s service providing on-demand fresh vegetables, fruits and more. Customers order their choices from their devices, and delivery is provided within hours or available for pickup at neighboring locations. Look for this service to continue to grow regionally, too, as local grocery outlets, dairies and farmers develop operations to meet their customers’ needs.
More and more consumers, particularly millennials, want to know their food producers are green, charitable with their excess product, control their water consumption, use alternative energies like solar-power, reduce wasteful packaging and more. While these important sustainable measures can be costly to operations, companies must leverage efficient green systems and be aware of cost-saving tax credits, like food donation deductions, to help offset these important efforts.
In 2017, consumers will research before they buy more than ever, and that includes food and beverages. With a quick search on their smartphones, consumers can make informed and speedy choices about the products they consume. What foods provide the protein and energy boost needed for a workout? Which drinks promote healthier skin? Where is this food grown? What are the core values and history of the company manufacturing the product? Successful food and beverage businesses will use digital and social platforms to connect with consumers, providing robust product research avenues, tips, stories, forums and more for the information hungry.