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Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.

 

The food ingredient revolution

Friday, May 01, 2015 > 10:02:29
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(Canadian Grocer)

Innovation is a staple of the food industry—food businesses have always changed recipes and formulas. But recent decisions by major players show the industry is being shaken by external powers, resulting in an ingredient revolution of sorts.

PepsiCo is removing aspartame from Diet Pepsi, and Kraft is revising its famous Mac and Cheese powder recipe to include natural ingredients.

It’s everywhere. Food businesses are revisiting their procurement strategies and ingredient lists of late as more and more consumers want to know where there foods come from, how it was made and under what conditions.

The good news is that the industry is showing signs of its will to adapt. The not so good news for food corporations is that the revolution has only begun—it will get more complicated.

Food ingredients are increasingly being scrutinized by consumers. Since food is so much in the public eye these days, the curiosity of consumers has now moved up the food chain of the industry, probing into the practices of processing plants and farms.

The adage suggesting that consumers believe food just showed up on store shelves is passé. This collective awakening of the foodie within us is compelling industry to address consumers’ concerns.

What is interesting to understand is why companies like PepsiCo, Kraft and McDonalds would change something so significant to their product when for years, nothing seemed to have bothered them.

Some may think that this ingredient-centric concern is all about product labels. They may believe that consumers are starting to look at labels more closely, trying to understand what is in their products. After all, labels are the only instrument consumers can use to access to nutritional information in stores, in real time.

Yet, according to a study from NPD Group, consumers are actually reading food labels less frequently than 10 or 15 years ago. Time-pressured consumers may be visiting food stores more than twice a week, but they spend just a little over 20 minutes per visit. Time to read labels is scarce. Moreover, it is unlikely that consumers review the labels of products they have been buying for years. So labels and packaging have little to do with this revolution.

Rather, it is the growing influence of corporation-consumer interaction, plus the increasing number of influencing sources, that makes the organizational role of consumer relations so influential. Product innovation is not so much about reassuring the public anymore. It is more about responding to public opinions on food issues and changing the DNA of the product itself, no matter on which side science is.

The “Farm to Fork” paradigm is slowly shifting towards a market-based “Fork to Farm” emphasis. Social media, not labels, has changed the power relations among the corporation, stakeholders, and consumers when it comes to ingredients.

Online consumers have the ability to criticize and damage corporations, even if some claims are not always scientifically defensible. Social media has essentially led to a more democratic food system, and this is only the beginning.

Simply put, consumers’ influence is significantly facilitated and amplified by social media, and food companies have noticed. So it shouldn’t come to any surprise that companies are changing recipes. They just don’t have much choice. As food issues continue to emerge, so too will the number of targeted companies.

But we can argue all we want about the health of consumers—changes in the food industry will always be about the mighty dollar in the end. Companies will move if it makes economic sense. In most cases, changes to products are precipitated by sluggish sales.

Regardless of whether or not such changes will actually rejuvenate struggling brands which were once powerhouses, at least companies are showing that they are listening to ever more engaged consumers.


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