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SIAL 2016 : first conclusions from a busy week

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Like every 2 years I spent a few days attending the world’s biggest food fair : SIAL 2016. Each and every year this fait gets bigger and 2016 was no exception.
SIAL 2016 remains a primary source of information for market research on the food sector and trends detection. Here are my high-level conclusions that I’ll complement in the coming days with special in-depth articles on specific products.

Let’s get organic

5 years ago, organic food was already a strong trend but consumption remains marginal in regards to standard ingredients. This year a whole hall was dedicated to organic products (and many more were scattered in the other halls) testifying that this trend has never been so strong. I haven’t met a single firm who hadn’t already organic variants in its product range or was about to introduce one.
Organic products will pave the way for a more respectful agriculture.
Today 800 millions people are starving. With population expected to grow by 2 billions in the next 30 years and production stalling (production has been inferior to consumption since 2000), FAO estimates that production has to increase 60% to cover needs. Industrial agricultural has obviously reached its limits and new advances must be made to meet the challenges ahead of us. Some experts think the next frontier is to be found in the 260 millions organisms that live in each square meter of soil.

Innovative products : where’s the value?

Some 500 innovative products had been selected this year by the jury (2500 had been submitted which represented about 10-15% of the yearly food innovation worldwide). I selected ca. 50 products which I found the most interesting and held meetings with each exhibitor to better understand the genesis of the product, its positioning, its value proposition, …
One thing struck me. Most innovations add little if any value for the consumer. They are marginal innovations that shouldn’t command higher prices. Yet, their creators think that consumers will buy in and pay a premium.

Does innovation rime with premium ?

In line with the above statement, I got the impression that many companies were thinking of innovation as a way to go premium and attract top-tier consumers. Most products that were perceived as being innovative were also priced higher than their equivalents. In my opinion this isn’t the best marketing strategy, because it addresses only a tiny part of the market and, most importantly, because the recurrence of the purchase will be negatively impacted by the price premium.
A food company launching an innovative product may be better off if it keeps its costs down and addresses the needs of a bigger part of the market.

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Author: Pierre-Nicolas Schwab

Pierre-Nicolas est Docteur en Marketing et dirige l'agence d'études de marché IntoTheMinds. Ses domaines de prédilection sont le BigData l'e-commerce, le commerce de proximité, l'HoReCa et la logistique. Il est également chercheur en marketing à l'Université Libre de Bruxelles et sert de coach et formateur à plusieurs organisations et institutions publiques. Il peut être contacté par email, Linkedin ou par téléphone (+32 486 42 79 42)

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