Processed Food Losing Market Share to Fresh and Organic Alternatives
June 24th, 2015With regard to “organic,” watch out: Who Owns Organic Brands And Why You Should Care.
Via: Fortune:
Major packaged-food companies lost $4 billion in market share alone last year, as shoppers swerved to fresh and organic alternatives. Can the supermarket giants win you back?
Try this simple test. Say the following out loud: Artificial colors and flavors. Pesticides. Preservatives. High-fructose corn syrup. Growth hormones. Antibiotics. Gluten. Genetically modified organisms.
If any one of these terms raised a hair on the back of your neck, left a sour taste in your mouth, or made your lips purse with disdain, you are part of Big Food’s multibillion-dollar problem. In fact, you may even belong to a growing consumer class that has some of the world’s biggest and best-known companies scrambling to change their businesses.
Lest you think this is hyperbole, consider the commentary in February at the Consumer Analyst Group of New York conference, the packaged-goods industry’s premier annual gathering.
“We look at our business and say, ‘How can we remake ourselves?’ ” said Richard Smucker, CEO of his family’s namesake jelly giant. A second exec—this one at ConAgra, which owns 29 food brands that bring in $100 million in annual retail sales apiece—bemoaned to Credit Suisse analyst Robert Moskow that “big” had become “bad.” A third conveyed what her industry feared would be the largest casualty of the public’s “mounting distrust of Big Food”—that shoppers would turn away from them for good. “We understand that increasing numbers of consumers are seeking authentic, genuine food experiences,” said Campbell Soup Co. CEO Denise Morrison, “and we know that they are skeptical of the ability of large, long-established food companies to deliver them.”
And here’s one number to capture that skepticism: An analysis by Moskow found that the top 25 U.S. food and beverage companies have lost an equivalent of $18 billion in market share since 2009. “I would think of them like melting icebergs,” he says. “Every year they become a little less relevant.”
