Do you ever walk through the supermarket and look at what people have in their trolleys? I must admit I do. Not because I am looking for those particular products myself, but rather I am interested in what might motivate them to purchase those items. Did they go for the free-range eggs, the private-label milk, or more recently the meat-free (plant-based) mince sold next to the regular mince at one of our major retailers?
Over the past month we have had our global animal protein strategist, Justin Sherrard, in Australia and some of the conversations we have been having are around what consumer trends are out there in the market and how they may influence the animal protein space.
Justin is fortunate in that his position gives him the ability to see across developments in some of the key consumer markets of the world and the changes that are going on within them. From the slow-grow chickens in Europe to the “fresh beef” non-frozen quarter pounder recently released by McDonalds in the US.
Justin notes that consumer preferences are rapidly evolving, led by the millennial generation – those roughly between 18 and 38 years of age. In general terms, these customers are willing to spend more, are experience driven, use ecommerce and social media, are health conscious, values driven and experimental. They make up just under 30 per cent of the Australian population and are the new consumers. Those with growing disposable incomes, increasing their independence and setting up families. They seek out labels that announce attributes like grass-fed, sustainable, organic, antibiotic free, gluten free, natural, hormone free, no artificial flavours or colours and welfare friendly. These labels have become common terms in the supermarket aisles as brands and products compete for the millennial attention. You only have to look at the meat cabinet and compare it to 20 years ago – you now have HGP free, organic, welfare friendly, heart smart, and more.
With so many product characteristics being promoted, it becomes somewhat overwhelming and it is near on impossible for the supply chain to meet all of these desires, let alone the producer.
So can the producer, or the supply chain, do anything to meet this changing appetite?
Millennials are expert at generating noise, but cutting through this, we believe three things matter most to them. Convenience, authenticity and trust. It’s not a matter of targeting one of these as a preference over the other – they are all required – but rather it is a question of which one to emphasise. Convenience and authenticity may be the easier of the three to achieve. For the livestock industry, however, trust – particularly given animal welfare concerns – will require extra work.
Finally, it is important to consider these themes as not only challenges but also as opportunities. The Australian livestock sector has a number of wonderful characteristics and attributes. Sometimes it may just be a matter of knowing the customer better and understanding what they are looking for.
- Angus Gidley-Baird is a Rabobank senior analyst.