HEALTHY eating is a growing focus among consumers, and that is good news for animal proteins, Deborah Perkins, marketing director for Rabobank International, said during a presentation at the International Production & Processing Expo last week.
Creating future market opportunities for meat and dairy products, especially as retail prices rise, will require a focus on adjusting to changes in consumer trends while establishing trust with food buyers.
In the U.S., eating trends are shifting with the changing demographics.
Baby Boomers, as the largest age group, have been the primary driving force behind food decisions, but in the next few years, the Millennial generation will surpass the Baby Boomers as the most important consumer group.
"Millennials are growing. The decisions they are making today are going to impact their buying decisions for the next 30 or 40 years," Perkins said.
Therefore, capturing Millennials' interest in meat and dairy products now will be the key to new opportunities in the future.
In the short term, though, Baby Boomers are still an important consumer. This generation is interested in health and nutrition while also embracing flavors. Marketing to this age group needs to focus on providing nutritional information and enhancing a healthy lifestyle.
Compared to Baby Boomers, Millennials share a concern for health, but in general, they do not know how to cook and are not interested in learning. Therefore, convenience and variety are priorities for the Millennial generation.
They are interested in whether the product is good for them and where it is produced. As a generation affected by the recession, Millennials also want value.
Still, overall food purchasing decisions are influenced by income, and the average income in the U.S. is slowly returning to 1995 levels. The disposable income level will determine if consumers will purchase just the basics or splurge on specialty products.
Currently, the U.S. is experiencing a change in its ethic population, with the largest growth in the Latino and Asian demographics.
"Asians and Hispanics have long been among our nation's fastest-growing race or ethnic groups," noted Thomas Mesenbourg, the Census Bureau's acting director.
The Census Bureau projects that by 2060, the Hispanic and Asian populations in the U.S. will both double to 128.8 million and 34.4 million people, respectively.
Perkins said, "We are seeing a real growth in (populations of) Latinos and Asians, and that really does impact what people are buying and what they are eating."
Asians and Hispanics shop more frequently and look for fresh produce and specific specialty meat products. In addition, they tend to shop at smaller grocery stores or ethnic markets, which creates niche markets.
Perkins said the demand for ethnic products will continue to grow in the U.S.
Social media will also contribute to the growth in ethnic food product market share. With Brazil hosting the Olympics and World Cup, consumers will be researching the country and Brazilian flavors. According to Perkins, poultry can easily adapt to those flavors.
One interesting trend is a rise in consumer aspiration. In addition to wanting transparency in food production, consumers also want to know that their food has been produced in a sustainable way.
It will be essential to communicate to the consumer how food products are being produced in a more sustainable way. Consequently, results from current research conducted by the livestock and poultry sector will be valuable tools for the industry in communicating their sustainability with consumers.
However, Perkins explained that it will be important to continue to produce meat and dairy products sustainably going forward.
At the end of the day, building trust with consumers will remain at the top of the list for animal agriculture, especially as consumers become increasingly skeptical of how food is produced.
"When I first joined Rabobank, statistics suggested that American consumers were more trusting of their food and what the government said about their food than anywhere else in the world," Perkins noted.
Results from Oklahoma State University's January "Food Demand Survey" affirmed that consumers perceive the U.S. Department of Agriculture and the Food & Drug Administration as the most trustworthy out of a list of 15 sources for meat and livestock information (Figure).
A university professor, especially from Harvard, was viewed as less trustworthy than the American Farm Bureau Federation or special-interest groups such as The Humane Society of the United States. Surveyed participants viewed food companies as the least-credible sources, with Chipotle rating the lowest.
As consumers continue to ask more questions about food, it is vital for all parties along the chain, from farm to fork, to focus on building trust.
Perkins said customers appreciate being informed and involved in the food production process whenever possible. It is essential to disclose accurate and relevant information.
Also, consumers want food companies to take responsibility if things do go wrong, making an appropriate apology and explaining steps for corrective action.
Social media plays a large part in consumer trends. In a world with information available instantly, consumers are checking online for information about food.
According to Perkins, food companies invested $350 million in social media messaging in 2013. Consumers, especially Millennials, are reading headlines and 140-character messages and listening to 60-second sound bites to make decisions about food.
For example, Perkins said a group of food vigilantes generated 1.7 billion messages about food worldwide last year, and even if this group did not continue discussing food online, the billions on social media are talking about food every second of the day. Therefore, educating consumers needs to include a social media platform.