Mary Ellen Kuhn

Mary Ellen Kuhn

One on One - Fereday

Nicholas Fereday

One on One - Fereday

Nicholas Fereday

It may sometimes seem as if everything changed in 2020, but that’s not quite true, says Rabobank Senior Analyst for Consumer Foods Nicholas Fereday. Food and beverage consumers, for example, remain perpetually focused on the same top purchase drivers, notes Fereday, citing recent International Food Information Council research.

What has begun to change, however, is what consumers expect from food companies in terms of mission and purpose, a change triggered by the COVID-19 pandemic along with heightened awareness of racial injustice issues following the police killing of George Floyd last spring.

In a conversation with Food Technology, Fereday reflected on the pivots and constants that will characterize the food system in 2021. Here’s an edited version of that discussion.

Q: What are the constants that companies should focus on this year?

Fereday: In the food industry, we get obsessed with all the change, and we talk about changes and give them more headlines than they really deserve. For example, if you looked at the amount of stuff that’s been written about plant-based foods, you would have thought it was taking over the world when in fact it isn’t.

So it comes back to the things that we all know to be true—that taste is the most important thing when it comes to purchasing decisions. . . . Taste, price, the healthiness of the products, [and] the convenience of the products are all the top drivers. And none of that has really changed at all over the years.

Brands and companies that were always portrayed as being out of touch and irrelevant now have an opportunity to show their value again. —Nicholas Fereday

 

Q: Many household staple brands enjoyed market share growth during the pandemic. How can those brands retain the ground they’ve gained?

Fereday: I think a lot of it will depend on just how much we return to our old way of living. If it is true that we only go to the office two or three times a week, then all those meals that would have been eaten out of the home will be eaten at home. It’s kind of an exciting time for these food companies. Brands and companies that were always portrayed as being out of touch and irrelevant now have an opportunity to show their value again.

Q: The events of 2020 haven’t affected everyone equally. Some have seen their 401(k)s grow as the stock market surged while millions of others are struggling to feed their families. How should companies respond to these divergent market drivers?

Fereday: We should always be wary about generalizing about the American consumers when there’s 330 million of them. There’s always going to be a certain percentage that will carry on regardless. We saw that in the last recession in 2008–2009.

Obviously, a number of people have lost their jobs and [there is] rising food insecurity and the greater use of food stamps. So that’s the value side. . . . And so the question is how do they get back to [delivering value]? Because for a lot of food companies more recently, it’s all been about how to “premiumize” their portfolios . . . adding benefits to justify the higher pricing.

On the other hand, it may be that even though people’s incomes are lower, they will continue to prioritize their health through their diet because it’s the only insurance until they get vaccinated.

Q. In an analysis titled “Pivoting on Purpose” you observed that corporate priorities have shifted from environmental concerns to social ones. What drives the process of setting priorities?

Fereday: If we went back to the start of the year [2020] as companies were trying to establish their sustainability credentials, that was partly a story about trying to do the right thing for the environment, but also trying to get closer to where they thought the consumer was going.

Q. Now we’re seeing companies focus more on social justice and commit to retiring brands that are based on racial stereotypes. How important is that to consumers?

Fereday: With the consumer you can’t sit on the fence on some of these issues. You have to stand up and be counted and recognize your failings. You have companies like Mars with that great line, “We’ve listened, we’ve learned, and we’re changing.” It takes a certain amount of confidence to be able to say that.

If you’re a consumer-facing company, you have to remember that your one job is to be really close to your customer. That’s the thing you have to get right.

About the Author

Mary Ellen Kuhn is executive editor of Food Technology magazine
([email protected]).
Mary Ellen Kuhn