Last updated on May 11th, 2015 at 08:56 am
Today’s major retail food and food service brands, along with their suppliers, face increasing challenges in recognizing and responding to ever-more-diverse consumers and their rapidly changing expectations. At the same time, companies must remake their businesses to leverage emerging channels and technology platforms. According to “Food Industry Transformation: The Next Decade,” a report from Technomic, the developing upheaval in the food industry will affect every aspect of the business from farm to fork, including sourcing, processing, distribution, operations and marketing.
Technomic, a leading food research and consulting firm, has analyzed these challenges in order to visualize the coming decade in the food industry, which is projected to grow by more than $700 billion to reach more than $2 trillion in annual sales by 2025. In the “Food Industry Transformation” report, Technomic experts forecast the myriad ways the industry will shift over the next decade and offer a detailed roadmap for industry players to navigate the future. Technomic breaks out new “FIT Models” to help brands reinvent themselves in response to the challenges of labor, food production and distribution, consumer psychographics and demographics and the economy in the years to 2025.
“To grow their share of industry sales, food providers need to continually reimagine, reinvent and reallocate resources to align their offerings with the evolving technology-enabled supply chain and the changing needs of consumers,” said Technomic EVP Bob Goldin. “Technomic’s detailed projections pinpoint food industry opportunities and imperatives for the upcoming decade.”
Findings of the “Food Industry Transformation” report include:
• Traditional retailers, such as supermarkets and supercenters, will lose 10 points of market share to nontraditional retail channels by 2025.
• Consumer trends over the next decade will be less favorable to the largest restaurant chains. Technomic projects a compound annual growth rate of 5 percent for independent restaurants and small chains, compared with 3.5 percent for large chains. Significant expansion also will be seen for fresh prepared foods at supermarkets, a segment expected to grow at 7.5 percent annually.
• The entire supply chain must be re-tooled to respond to or pre-empt consumer and regulatory demands for foods that are good for people and the planet. The winning products of 2025 will include not only those that can legitimately be labeled as “natural” or “local,” but also those with “clean” labels, fewer ingredients, less processing and a favorable carbon footprint.
Technomic’s report includes 10-year projections for every food and food service industry segment, offering executives in each area of the business the best game plan for capturing their share of expanding sales.
