Food trends: Positive eating and downturn diet

MANILA, Philippines - When the going gets tough, the tough goes eating healthy eating. This
is the latest trend reported by McCann Worldgroups !ar"et in#or!ation and research pro$ider
CMI %Center #or Mar"eting Intelligence&. Countries e'periencing econo!ic #lu', the Philippines
#or one, sho(s ne( consu!er thin"ing (hen it co!es to #ood shopping, preparing, and dining.
The CMI report sho(s that consu!ers are less dieting, and (hen they do, its not an atte!pt
#or (eightloss, rather, #or (ellness. There is a gro(ing desire #or si!plicity and bac"-to-basic
(holeso!e andnatural #oods. Consu!ers are also loo"ing #or !ore nutrition #or their !oney,
and are !ore conscious in che c"ing nutritional labels.
The report also sho(s ho( #rugality has beco!e the ne( )in* thing - no(, its not about sho(ing
o## ho( !uch is spent, but the ability to control and de!onstrate ho( !uch is sa$ed.
+espondents say that they are coo"ing !ore at ho!e and eating out less at restaurants.
Wellness not weight loss = positive eating
According to CMI, (hen consu!ers say they are on a diet, theyre dieting #or their health.
+ather than losing (eight or loo"ing better, ,- percent o# respondents say that )#eeling
healthier* is the reason #or dieting. Perhaps the di##iculty o# the process o# (eight loss dieting
has ta"en its toll, and instead o# depri$ation, adding health#ul #oods to !eals !ay be the better
option. Consu!ers no( (ant to be healthy and en.oy li#e.
Nearly t(o-thirds o# consu!ers are also !ore li"ely to chec" nutritional in#or!ation on labels.
Theyre loo"ing #or #our i!portant ite!s/ #at, calories, sugar and trans #at. Natural is also the
!ost #re0uently #eatured clai! on #ood and be$erages. This, along (ith )plus* clai!s or that
(hich includes $ita!ins and calciu!, are also gaining popularity a!ong consu!ers. It used to
be that )!inus* tags are bench!ar"s o# good nutrition. No(, instead o# loo"ing #or )!inus* or
lo(-#at1 lo(-calorie labels, consu!ers are no( searching #or )genuine* nutrition, #inding the
balance bet(een addition and subtraction.
Downturn diet
As recession hits, consu!ers not only loo" #or healthy alternati$es, they also are e!bracing a
do(nturn diet - eating s!aller proportions, cutting out .un" #ood, drin"ing be$erages instead o#
snac"s, and snac"s instead o# !eals.
CMI says that 23 percent o# consu!ers are coo"ing at ho!e and eating less out at restaurants.
4et, (hile at ho!e, they still loo" #or con$enience options and short cuts. This is capitali5ed by
increased sales o# pac"aged products (hich li!it preparation ti!e.
Al!ost 67 percent o# consu!ers (ho still get to dine out are cutting bac" on $isiting #ull ser$ice
restaurants and trade do(n to less e'pensi$e #ast #ood .oints during cheaper day parts, li"e
brea"#ast or snac"s. They are loo"ing #or $alue !enus, ta"ing ad$antage o# coupons and
pro!otions.
Challenge for marketers
Assess!ent o# these #ood trends suggests that consu!ers ha$e beco!e care#ul shoppers,
disregarding i!pulse buying, listing do(n (hat they need and #inding ti!e to gauge one
products bene#its #ro! another. 8or !ar"eters (ho are li"e(ise tightening belts, this should be
regarded as an opportune ti!e to learn ho( to do !ore (ith less.
According to McCann Worldgroup 9usiness :e$elop!ent :irector Tricia Ca!arillo, )Mar"eters
are no( #aced (ith the challenge o# building con#idence #or consu!ers to go out and shop.
Trying ti!es should push !ar"eters to re-e$aluate !essages as truth, trust and transparency
beco!e e$en !ore i!portant to consu!ers. These are the !ost i!portant the!es no( #or
brands, not only those in the #ood category, but all other sectors in consu!er goods.*
Phillipines
Market Development and Access Strategy 2011/2012
The Philippines is one of the youngest and the fastest groing populations in the
orld ith 101 million people! The Philippine economy gre "y #!$% in 2010& hich
several reports descri"ed as the fastest groth in $' years! The economy remains
relatively small in si(e and the )S* $&+00 ,DP/capita is lo even "y South -ast
Asian standards! .eteen 200$ and 200#& ,DP gre "y over +0% in terms of its
local currency making it one of the orld/s fastest groing economies! The agri0food
sector in the Philippines is e1tremely fragmented and modern retailing and food
service is very much in its infancy& "ut transforming 2uickly!
The Agri03ood Sector
Traditional food retail and service formats& particularly et and dry markets and
4Sari0sari/ stores are the most common route to market for locally produced and/or
manufactured products and lo0medium priced imported products! 5mported food
products are predominantly found in foreign oned supermarkets and + star hotel
restaurants in ma6or ur"an centres such as Manila! 7hile the Philippines is a very
price sensitive market& rising per capita incomes and a rapidly e1panding modern
food retailing sector spurred "y foreign investment ill provide signi8cant
opportunities for the 9ictorian agri0food sector!
Agriculture is a ma6or industry in the Philippines employing over one0third of the
population& and accounting over 1'% of ,ross :ational Product! The landscape is
dominated "y e1pansive estates that date "ack to colonisation& hoever a national
land redistri"ution program& hich "egan in 1;;<& is transferring land onership to
local residents! Ma6or agri0food industries are sugarcane& rice& corn& fruit =coconuts&
"ananas and pineapples>& poultry and pork! The Philippines remains a net importer
of agri0food products ith a trade de8cit of )S* 1!+' "illion in 200#! 7heat and rice
are the most imported commodities folloed "y dairy ingredients& hich are
primarily used in the large processing sector!
The general macroeconomic outlook has improved dramatically over recent years&
hoever the Philippines needs to continue its economic reform agenda to ensure its
long term 8scal sta"ility and to catch up to other South -ast Asian economies! The
Philippines has a volatile political history& hoever since 2001 the country has "een
relatively sta"le! The Philippines still has issues ith corruption& lack of economic
legislation& rapid population groth and ongoing insurgencies "y e1tremist groups
hich continue to undermine this sta"ility!
?ecent economic li"eralisation has resulted in a trading system that is more
transparent and has some of the loest applied tari@s in the region! Tari@ rates
=currently undergoing unilateral reduction> for most consumer0oriented products
range from $%01+%& e1cept for industries considered sensitive such as poultry&
pork& potatoes and co@ee hich have minimum access volumes and signi8cantly
higher tari@ rates applied to them! The Philippines is a mem"er of the 7TA and
AS-A: and as such is an important mem"er of the Australian B :C B AS-A: 3TA!
5mported agri0food products are regulated "y the Department of Agriculture =animal
and horticultural products> and the Department of Dealth =processed foods>!
9ictorian Agri03ood -1ports to Philippines
9alue of 9ictorian 3ood and 3i"re e1ports to the Philippines 200;/10 =A* million>
9ictorian food and 8"re e1ports to the Philippines ere valued at A*11; million
in200;010! Eey e1ports to the Philippines ere dairy =F'%> and meat =1+%>!
Market Segmentation
The gulf "eteen the rich and poor is ide ith $0% of 3ilipino/s living "elo the
poverty line! 5n ur"an areas poverty aGicts 20% of the population hile in rural
areas it is up to '#%! Hack of employment in local provinces and lo ages has led
to an estimated 10 million overseas 3ilipino orkers ho send "ack remittances to
support other family mem"ers signi8cantly "oosting consumer purchasing poer!
The middle class consumer is generally "ased ithin the :ational Iapital ?egion
hich includes Manila and surrounding cities and is the focus for 9ictorian agri0food
products due to increased demand for convenience and imported products !
3ood ?etailing
The 3ilipino food retailing sector is undergoing signi8cant transformation ith
modern retail formats including supermarkets& hypermarkets and convenience
stores rapidly developing! Modern retailing is relatively ne concept& highly
fragmented and located in ma6or ur"an centres! Despite this& the Philippines is
idely regarded as one of Asia/s most attractive retail groth markets!
3ood Service
3ilipino/s spend appro1imately 12% of total income eating out and the sector is
valued at *)S $ "illion& ith groth of 10%01+% in the last decade! Traditional food
service formats still en6oy a ma6ority market share in the Philippines& "ut the
modern food service market& driven "y convenience and price and dominated "y
fast food restaurants/chains such as Joli"ee& McDonalds and IhoEing& is increasing
its presence ith speed! Digh end restaurants and hotels are found in metropolitan
Manila and service ealthy local and e1patriate consumers! .oth of these segments
are heavily reliant upon imported foods and are appropriate markets for 9ictorian
agri0food e1porters! Access to the food service market is predominantly through a
local importer/distri"utor!
3ood Processing
The Philippines food processing sector is the dominant manufacturing industry in
the country! 5t accounts for '0% of total manufacturing output& contri"utes 20% of
,DP per annum& is groing at <%010% annually and provides current and groth
opportunities for 9ictorian agri0food companies! Manufacturing of local and
imported products occurs across all ma6or food categories and is dominated "y local
companies& over 11&000 in total! Ma6or companies include San Miguel and ?3M
Iorporation and there are fe foreign companies operating in this sector! Many of
these companies ill act as importing agents to reduce costs on large volumes of
product hilst smaller companies may use an intermediary to import product!
Agriusiness Services
Almost +0% of the Philippines land mass is classi8ed as agricultural land and the
ma6ority of agricultural production is undertaken "y small land holders ho either
lease or on their land! Due to rapid population groth and escalating commodity
prices& increasing food self suKciency is a ma6or concern for the 3ilipino
government! )nder the Agriculture and 3isheries Modernisation Plan& livestock
development& pre and post harvest facilities/infrastructure and "iotech research and
development have "een prioritised! Doever there is a lack of agricultural
production e1pertise& farming systems and technology that ill su"stantially
increase food output! This presents serious commercial opportunities for agricultural
service providers to develop the Philippines agricultural sector ith local partners&
particularly for the dairy& a2uaculture and goat industries! This ould enhance trade
and potentially ena"le to0ay 3oreign Direct 5nvestment
Eey Activities 3or 2011 0 2012
Io0ordinate a delegation of meat importers and distri"utors from the Philippines to
9ictoria to shocase capa"ility of production and 2uality of products availa"le for
e1port!
Iontinue to develop agri"usiness service opportunities for the 9ictorian meat& dairy&
horticulture& grains and a2uaculture industries in the Philippines!
Ionduct research ith key stakeholders in 9ictoria and the Philippines to gain a
"etter understanding of the value of reinstatement of in0transit cool treatment
protocols "y the 3ilipino ,overnment for Australian horticulture e1ports!
This section e1plores key trends that emerged from the research! These trends fall
into three distinct "ut related categories B health and ell"eing foods&
environmentally responsi"le foods& and ethically produced foods! These themes
8gured strongly in respondents/ comments as trends that have developed fairly
recently and ill continue to gro!
The results for this section come from "oth the Delphi study and the face0to0face
intervies conducted "efore and after the Delphi study as conducted!
1!1 Trends in Dealth and 7ellness 3ood
LMhealth has "ecome a key indicator for retailers in the ay they are perceived "y
consumers& not only in terms of o"esity and health "ut their overall Iorporate Social
?esponsi"ility performance! 5t is also top of the agenda in terms of pu"lic health and
policy makers!N B Delphi respondent
L7ell"eing is not a ell developed idea in consumers/ minds& although it seems to
"e part of a orldide trend!N0 Trade representative& Australia
7ellness is 8rst and foremost a choice to assume responsi"ility for the 2uality of
your life! 5t "egins ith a conscious decision to shape a healthy lifestyle! 0 Don
Ardell& Ph!D!& )niversity at .u@alo
Eey 8nding 0 The ma6ority of Delphi participants responded that 4health and ellness
foods/ ere likely to have a high to very high impact on their area of Eey 8nding
operation in the medium term! This "elief as reinforced "y comments from the in
depth intervies!
The ma6or trends identi8ed in this category ereO increasing healthiness in
convenience foods& healthier foods that are 4"etter for you/& =that is reduced fat&
salt& sugar or additives>& holesome foods& 4Superfoods/& foods ith added
functional elements and organic foods!
7hile this market trend has e1isted for some time& the trend has evolved to mean
more than the individual/s health and ell"eing! Ionsumers ho are interested in
their on health and ell"eing are also "ecoming interested in that of the planet!
LThe "roadening of the ell"eing concept e "elieve is the important point! 5n the
past ell"eing as "asically associated ith 4the self/ B my ell"eing! 7ell"eing
no and in the future ill em"race 4me/ and the environment!N B 3ood industry
analyst& Ianada
1!1!1 IA:9-:5-:I- P TAST-
LIonvenience B it ill gro "ut it ill get healthier! 3or one thing! 5t ill "e less
a"out microavea"le food and more a"out ready to cook! 5t feels healthier! Ihilled
ready to cook is hugeQ it/s fresher and has "etter ingredients!N B ?etailer& )E
Several respondents noted that if perceived preferences for credence attri"utes
ere to "e ranked& satisfaction in taste and convenience ould come "efore
credence attri"utes& that is& consumers perceive value in "oth good taste and ease
of use! At its heart& convenience in food products orks "ecause these products
em"ody a service for the consumer B time& ease of use& accessi"ility!
4Meal solutions/& as they are knon in food industry circles& encapsulate the drive
toards convenience in food o@erings! Traditionally& convenient food has "een
perceived as a less healthy alternative& hoever readily o"serva"le evidence
indicates that the to trends are converging! Precut salads& parcooked vegeta"les
and grains& and an e1plosion in convenient dairy products all signify this trend
=-uromonitor& 200F>!
According to a num"er of respondents& the research indicates that hile consumers
are interested in "uying food that has credence attri"utes& in the health and
ellness market food that tastes good and is convenient to use is a precondition!
This includes products that are healthy& easy to prepare and accessi"le to "usy
consumers!
3igure 1O Maslo/s Dierarchy of :eeds&after Maslo =1;'$>
The research suggests that as markets mature& functional foods gro in line ith
Maslo/s Dierarchy of :eeds =1;'$>! Maslo descri"es ho people/s needs move
from "asic hunger satiety through several stages to selfactualisation as their ealth
increases! This model is highly relevant to food preferences! As consumers age and
"ecome ealthier& their desire to e1press themselves through their food choices can
"e seen as a process of self0development! Ionsumers may move from satisfying
"asic hunger to making ethical food purchases to release some higher personal
ideal!
3igure 1O Maslo/s Dierarchy of :eeds& after Maslo =1;'$>
1!1!2 7DAH-SAM- 3AADS& 4.-TT-? 3A? RA)/ 3AADS& S)P-?3AADS
7ithin the health and ell"eing trend there are a num"er of product categories that
appeal to the market in di@erent ays!
The most 4"asic/ of these is the trend to holesome or hole foods a direct reaction
to science "ased modi8cations to food and more "roadly to the industrialisation of
the food chain! These are the foods that sit at the "ottom of the dietician/s food
pyramid! Trust in these foods is also perceived to "e higher as the food remains in
its original state B there is no need to check the la"el!
LPrepared foods ill have to contain stu@ that you/d have in your cup"oardN B 3ood
supplier& )E
?espondents in the )S and Australia mentioned the groth of retailers ho
specialise in 4hole foods/ as evidence of the groing interest in this category!
5ndeed& 47hole 3oods Market/ in the )S has used this phrase ithin their title to try
and capture this market& and aligned it ith environmental and social good
messages! This phenomenon is discussed in greater depth in the 4Drivers/ section of
this report!
4.etter for you/ foods are those that have had fat& sugar or other elements removed
from them in order to make them healthier! ?espondents from several countries
commented that the trend to removing fat and sugar =creating 4diet/ products> had
"een in evidence for a num"er of years!
LAmericans don/t eat food! 5t/s all lo fat& lo sugar and the taste is terri"le!N
Dietician& )S
L7e see that lo calori8c foods ill "e one of the most important consumer trends
due to the large market segment for an ageing population as ell as an increased
num"er of consumers ho are concerned a"out their healthN B 3ood distri"utor&
Japan
4Superfoods/ are foods that have valua"le properties hich science identi8es such
as antio1idants& as distinct from many 4functional/ foods hich may have attri"utes
added to them! They are often hole and natural foods such as "roccoli& "lue"erries
or atercress!
The interest in 4Superfoods/ as distinct from functional foods is enhanced "y media
interest in novel products! A"servation shos that industries have "ecome adept at
2uickly turning a recently discovered 4super/ functional attri"ute into a point of
di@erence B one )E supermarket has distinctive 4Superfood/ la"els for products!
.o1 1O TraKc lights B an easy ay for consumers to assess health attri"utesS
The )E 3ood Standards Agency advocates a voluntary code of food la"elling that
displays levels of fat& salt and sugar as "eing either red& am"er or green B the
thinking "eing that consumers should eat more 4green/ foods and feer4red/ foods!
This approach to health la"elling has sparked considera"le de"ate among )E
retailers& consumer groups and the food industry generally! Some retailers prefer
a4percentage daily intake/ la"elling systemQ others are supportive of the traKc lights
system!
The most signi8cant point of this de"ate has "een the amount of interest and
response it has dran from "oth consumers and the industry! 5t highlights the
increasing interest in healthy food products in this market!
LThe important thing a"out the de"ate on the traKc light system is not hich
scheme is the "est& "ut that it has created interest! People are talking a"out it! 5t/s
part of the pu"lic de"ate on nutritionN B :,A& )E
1!1!$ 3):IT5A:AH5TR A:D 3AAD T-ID:AHA,R 0SI5-:I- D?59-: ,AAD:-SS
5n 1;;$& the then Australia :ational 3ood Authority de8ned functional foods asO TM
similar in appearance to conventional foods and intended to "e consumed as part of
a normal diet& "ut modi8ed to serve physiological roles "eyond the provision of
simple nutrient re2uirementsT
LThere ill "e fads M "ut the underlying trend is still there& people are going to "e
looking for health in foods no 2uestion!N 0Dealthcare professional& Japan!
3oods ith functional attri"utes have e1perienced signi8cant groth in developed
countries over the past decade! As good health rides high on the consumer agenda&
foods that o@er speci8c "ene8ts are ell placed to take advantage of the market!
According to -uromonitor& per capita spending on functional foods is led "y Japan&
folloed "y several estern -uropean countries and the )SA! Total spending is also
led "y Japan& ith the )SA a close second! Ihina and the )E are also signi8cant
markets for functional foods =-uromonitor& 200F>!
LPeople are no using functional food to maintain a healthy lifestyle& they see a
connection there!N B :,A& )E
The rapidly ageing Japanese population has stimulated groth of a strong market
for such dedicated ellness products as :utraceuticals& functional foods& and
speci8c health claims for e1isting foods =Superfoods> hich is further developed
than in many 7estern countries!
Ionversely& in some estern markets& some respondents considered there to "e the
"eginnings of a "acklash to functional foods in preference for holefoods!
L$0' years ago functionality as "ig& "ut no consumer feed"ack indicates they
don/t really like 4playing around ith food!N Supermarket e1ecutive& )E
LIonsumers ant holistic health B emotional& social as ell as physical! 3unctional
foods don/t really 8t this paradigm!N B ?etailer& Australia
3unctionality in foods ill continue to "e of interest for health conscious consumersQ
hoever there is a cautionary note that ith the continued rise in 4hole/ foods&
some consumers in estern markets may re6ect foods perceived to "e engineered
for functionality!
As ith all high pro8le trends& there is a certain 4faddish/ nature to some products
related to health claims! A"ility to su"stantiate "ene8ts and appeal to consumers/
on instincts for healthiness is key! The underlying
ArganicO produced "y speci8c management practices hich take care of the
environment and soil! Synthetic chemicals such as pesticides and her"icides are not
permitted =Hea& 200+>!
and ongoing trend for foods associated ith good health and preventative
healthcare is e1pected to continue!
1!1!' The Arganic Market
ArganicO produced "y speci8c management practices hich take care of the
environment and soil! Synthetic chemicals such as pesticides and her"icides are not
permitted =Hea& 200+>!
?espondents from the )E food industry "elieve that there are several distinct
drivers for consumers to purchase organic food products! 7hilst the organic
movement is idely "elieved to have started from a desire for environmentally
responsi"le food& many consumers are no purchasing "ecause they perceive
organics are "etter for them as ell! This& along ith the perception that organic
products are good 2uality& has propelled organics into the mainstream market
supported "y large retailers seeking ne and di@erentiated products!
Several empirical studies into consumer preferences for organics support the shift
from environmental to health motivators =see& for e1ample& Mc-achern and
McIlean& Hea and 7orsley>!
L?esearch in this area UorganicsV is neededM the organic movement is doing it for
the environment& "ut consumers are "uying for health reasons!N B :,A& )E
Ane respondent voiced the opinion that consumers also "uy organic products as
lu1ury items& most nota"ly at Ihristmas hen sales increase considera"ly!
LSome shoppers are 4sho "oaters/! 7hat/s the point of "uying everything organic if
you can/t "rag a"out itS They ish to appear as though they/re "uying into these
things!N B 3ood e1ecutive& )E
5ntervies ith industry participants indicated that the organic sector is still groing
and is e1pected to continue to do so! 3or e1ample& 7almart in the )S and a ma6or
retailer in the )E have "oth committed resources to developing the market for
organics ithin their supply chains and sourcing larger 2uantities of organic
products!
The organic market forms a signi8cant component of the health P ellness market!
According to -uromonitor& in the )E alone& the groth in retail sales for organic
products as over $1% "eteen 2002 and 200+ =-uromonitor& 200+>! The average
)E consumer is increasingly aare of the "ene8ts ascri"ed to organic produce!
A similar trend is evident in Australia here retail sales of organic products have
e1panded from around A*2<m in 1;;0 to around A*2+0m in 200$ =Hea& 200+>!
Australian supermarket chains have also "ecome involved ith organics! 3or
e1ample& Ioles has over 1+0 organic lines& an increase from 12 6ust to years ago
=Hea& 200+>!
5n Japan the organics market has a slightly di@erent emphasis& here groing
consumer concern over food safety continues to fuel the groth of Japan/s organic
food market! Dighly pu"licised out"reaks of .ovine Spongiform -ncephalopathy
=.S->& Avian 3lu and 3oot and Mouth Disease have contri"uted to increasing
consumer demand for product tracea"ility and a shift toards organics! This shift
has seen sustained groth of 1+!#% over the 2001200+ period =Datamonitor& 200+>!
According to Datamonitor& Japan/s market for organic products is e1pected to
continue to gro and is likely to reach A*F!+"n "y end of 2010& maintaining its
position as the largest organics market in the AsiaPaci8c region =Datamonitor&
200+>!
1!2 Trends in Sustaina"ly Produced 3ood
4-nvironmentally sustaina"le/ as rated "y respondents to the Delphi survey as
having a 4medium to high impact/ on the future of their area of ork!
Eey 8nding 0 Iomments from the Delphi study suggested that environmentally
sustaina"le supply chains are "ecoming increasingly important& and that the
concept is driven "y to factors! These ere consumers/ on increasing
environmental aareness and the 4authorising environment/ here the operations
of the food industry ould come under increased scrutiny!
3ood products that are 4green/ B that is produced in an environmentally responsi"le
ay B have "een availa"le for some time in specialty stores& and more recently& on
the shelves of supermarkets that have responded to the increase in consumer
interest in environmental issues! The research done "y .eyond Price and Wuality
into this area found that the ma6ority of food industry participants surveyed felt that
4green/ food ould gro in importance for consumers into the future =DP5& 200'>!
5n the current research& overall 4green/ issues mentioned either prompted or
unprompted "y respondents included 4food miles/& 4car"on neutrality/& 4local
sourcing/& 4packaging =overpackaging or composta"ility>/& 4organic/ and 4sustaina"le
sourcing/! These are e1plored "elo!
1!2!1 S)STA5:A.H- P?AD)IT SA)?I5:,
Sustaina"le product sourcing =particularly of 8sheries products> as noted as an
issue for retailers& noticea"ly in Japan& the )E and the )SA! The Marine Steardship
Iouncil/s accreditation is idely accepted as the standard for sustaina"le sourcing
of 8sheries products!
LAne of the key drivers of consumer "ehaviour is environmental issues! The decline
of natural resources& especially marine resources due to over 8shing is an issue of
concernN B ?etailer& Japan
At least one ma6or supermarket chain in Japan has instituted a marine steardship
la"el! Aeon is Japan/s largest food retail company& and markets seafood under the
4)mino-co/ =ecology of the ocean> la"el& hich is certi8ed "y the international
Marine Steardship council =)SDA& 200F>!
.o1 2O Sustaina"le ood products B a non food item under the sustaina"le spotlight
Sustaina"le sourcing of ood and paper products is also on the agenda for food
companies& particularly in Japan& a signi8cant consumer of paper productsO
L7e use a speci8c type of paper hich is produced from ood chips aste in order to
protect green environment!N B Distri"utor& Japan
LPeople are starting to ask 2uestions B oodchip "uyers have started to ask that
suppliers source their chips from 4renea"le sources/N B 3ood industry analyst& Japan
Ane )E supermarket respondent con8rmed they also procure ood products from
sustaina"le sources& as do many of their competitors! As ith 8sheries products&
most ood products sourced "y this retailer conform to e1ternally audited programs
such as the 3orest Steardship Iouncil!

?etailers in these mature markets =Japan& )E& )SA> have "egun to a"sor" messages
a"out sustaina"le sourcing and have altered their sourcing strategies accordingly!
1!2!2 4IA?.A: :-)T?AH5TR/ A:D ?-SPA:S- TA IH5MAT- IDA:,-
LSuppliers need to "e on top of the 4car"on issue/ to meet supermarket
re2uirements along the hole chain!N B 3resh food supplier& )E
?esponse to climate change as cited as an emerging trend for the food industry&
particularly in the )E!
The recent rise in pu"lic interest in climate change and its potential impact on the
planet has prompted a focus on car"on emissions created "y all manner of human
activities& including food production!
This interest as e1pressed "y respondents using a range of phrases including
socalled 4food miles/& local sourcing of products and car"on footprint accounting!
LProduct sourcing is de8nitely under the spotlight B suppliers need to provide a
4footprint/!N B Supplier& )E
LTen years ago retailers ere promoting food as 4Xon for freshness/! :ot no
M Despite its pro8le& most food isn/t air freighted!N B Supplier& )E
.o1 $O 3ood miles B an appropriate measureS
3ood miles& a phrase coined "y )E Professor Tim Hang in the early 1;;0s& is used to
illustrate the emissions created "y shipping food products around the glo"e! The
term is easy to understand and has received ide press coverage in the )E!
Doever& it is important to note that the concept of 4food miles/ is not necessarily
the most e@ective message a"out responding to climate change in many markets& as
the distance and mode of transport makes up only part of the total car"on emissions
that are generated in food production! 5n isolation& food miles are not a relia"le
measure of environmental impact =D-3?A& 200F>!

7hile there is an apprecia"le impact on retail/customer re2uirements due to climate
change in the )E& there is less clarity a"out the actual impact of climate change on
consumer attitudes and "ehaviour!
L5 think to date the pu"lic de"ate has "een e1tremely super8cial and it ill "e
interesting to assess consumer opinion if there is a more informed de"ate& for
e1ample a move aay from a simplistic discussion on food miles!N B Delphi
participant& )E
5n Japan& climate change as cited "y several food industry respondents as an issue
that ill "e important in the future! As ith the )E and )S markets& good Iorporate
Social ?esponsi"ility =IS?> as cited as the primary driver for companies to address
the issue! Most respondents indicated that it as not an issue that directly
inXuences consumer "ehaviour in that market yet!
L7e need to pay more attention to emission gas generated from vehicles used for
product distri"utionM to look into improvements to reduce impact on the
environment ould "e our challenge in the future!N B 3ood distri"utor& Japan
L,lo"al arming and su"se2uent a"normal eather patterns are creating
tremendous an1ieties for the future of agriculture and dairy farmingN B 3ood service
company& Japan =from promotional literature supplied "y respondent>
That products must travel long distances to get to Japan is a given for most
consumers in Japan& hich& along ith the )E is a net importer of food! Doever&
the Japanese are aare of climate change issues& not least "ecause the Eyoto
Protocol as signed in their country!
43ood miles/ is not a concept ith much traction among the Japanese respondents!
All Japanese respondents felt 4food miles/ as either not an issue for consumers or
their "usiness& or that it as related to freshness and logistical concerns rather than
environmental concerns!
L7e "elieve that this Ufood milesV on/t "e a factor that inXuences consumers
manner U"ehaviourV "ut this might cause either little or large concern ith
consumers in regard to freshness& cost of food materials or glo"al environmental
issuesN Manufacturer& Japan
This 8nding does not mean that Japanese "usinesses are unresponsive to climate
changeQ rather it reXects cultural di@erences in the ay climate change issues are
discussed!
?espondents from the )S and other markets ere generally more circumspect on
climate change as an immediate issue in food markets& commenting that it ill
increase in importance in the future!
L,lo"al arming concerns are high on the political and social agenda in :oray!N B
?etailer& :oray
L,lo"al arming& concern a"out greenhouse gases& and the "urning of fossil fuels
and use of YpetrochemicalsY people/"usinesses Yho get itY are looking for
alternativesO a Ylo car"on futureN B Supplier& )SA
These 8ndings suggest that climate change is on the agenda in developed countries
"ut that pu"lic reaction has not yet spilled over into consumption "ehaviour!
Despite this& retailer response to climate change is a@ecting the supply chain in
some markets "y o"liging suppliers to e1amine their car"on emissions and in some
cases& reduce them!
)E retailers& hile not necessarily any more sophisticated in terms of understanding
of issues& are further advanced along the path of implementing proactive plans to
o@set possi"le future regulatory or consumer reactions to climate change! 5t is an
issue that re2uires monitoring!
1!2!$ PAIEA,5:,
The relationship "eteen food packaging and the marketing of environmentally
responsi"le food is complicated "y the associated rise in demand for convenience in
food products! -1cess packaging is "eing targeted as an issue in several markets in
response to concerns a"out the environment! Although packaging is a tangi"le&
functional attri"ute& it has "een included here to demonstrate the appeal of
environmentally friendly products!
LArganic food needs to "e prepackaged for "randing purposes B there/s an
opportunity for novel packaging such as "iodegrada"le packagingN B ?etailer&
Australia
LHeast amount& feest materials is our goalN B ?etailer& )E
5n the )E& much fresh fruit and vegeta"le products are prepackaged and sold on the
"asis of pack volume& rather than eight! Signs are shoing that the trend toards
prepackaging of fresh produce in )E supermarkets may "e under revie ith at
least one ma6or retailer 4trialling/ unpackaged fruit and vegeta"les in store in
3e"ruary& 200# =The 5ndependent& 3e" 1& 200#>!
5n the Japanese market& presentation is very important! Packaging forms an
important part of this presentation& particularly in the si(ea"le gift market!
Therefore& some respondents in Japan felt that packaging issues related to
innovation in form and function& rather than reduction!
LUPackagingV is important! Doever& if e use too much packaging& the product can
lose its natural imageN B ?etailer& Japan
Despite this& the Japanese have long had a strong interest in recycling and aste
reduction& driven in part "y the high population density in Japan!
5n the )S& the orld/s largest retailer& 7almart& has made a commitment to reducing
packaging "y +% "y 201$! A 4packing scorecard/ has "een devised to help suppliers
meet the target "ased on indicators such as car"on dio1ide emissions& packaging to
product ratios& recycled content and transportation costs =Packaging 7orld& 200#>!
Hess packaging or innovative packaging such as using "iodegrada"le materials
looks to "e the ay of the future for 4green/ products! -ven products that do not
em"ody environmental credence characteristics are likely to "e a@ected if customer
re2uirements for packaging reduction are implemented!
1!2!' HAIAH SA)?I5:,
Ionsumer desire for food that is produced locally is cited "y respondents as "eing a
ne trend& related to the perceived car"on emissions associated ith food transport
=see section on climate change>& as ell as a desire to support local communities
and for reasons of perceived food freshness and 2uality!
LTrue 4local/ consumers act out of concern for local industries and communitiesN B
3ood industry analyst& )E
L5n Japan& it is common sense to value artisan ingredientsM e carry them not only
"ecause the products are popular and e can make large pro8ts& "ut also to
contri"ute to the community and protect their traditions! 7e notice that the
community responds to this type of corporate citi(enshipN B ?etailer& Japan
Demand for locally sourced product has seen several retailers in the )E adopt
regional sourcing strategies here they actively solicit 4local/ food companies to
supply them ith products! Despite the inherent tensions that local sourcing poses
for companies geared toards glo"al supply chains and consolidated distri"ution&
this trend has shon traction& as long as it is economically sustaina"le for
companies and consumers!
At its heart& desire for locally sourced food is not a simple attri"ute like car"on
neutrality or animal elfare! 5nstead& it em"odies a ish to preserve a ay of life
that is perceived to "e disappearing in the face of the competitive glo"al supply
chains& a desire for fresh& 2uality products& and for the reduction of car"on
emissions from transportation! Ionsumers may "e attracted to one or all of these
attri"utes!
1!$ Trends in -thically Produced 3ood
5n this analysis& animal elfare is assumed to "e a su"set of 4ethical/ food& partly
"ecause that ho it as perceived "y respondents& and partly "ecause of the
terminology generally used to descri"e good animal elfare treatment B namely
4ethical treatment of animals/!
Similarly to 4green/ food& products that carry credence attri"utes that mark them as
"eing produced or sold 4ethically/ ill appeal to a segment of the consumer market!
Such 4ethical/ foods may "e sold under a fair trading scheme& or may have animal
elfare implications!
The Delphi study did not reveal a strong perception for or against 4ethically/
produced food in participants/ estimation of the impact the issue ould have on
their area of ork! ?espondents ere generally polarised in their preferences
"eteen 4high future impact/ and 4lo future impact/! This may reXect the highly
segmented nature of the ethical food market as some products lend themselves
more readily to 4ethical/ status than others do B =usually those that are produced
under circumstances that consumers perceive as less ethical B for e1ample& prone
to orker e1ploitation>!
Iomments from the respondents to the Delphi study illustrated this polarisation
somehat B ethical foods appeal to consumers/ altruistic tendencies B the
selfactualisation found at the top of Maslo/s hierarchy of needs =Maslo& 1;'$>!
Eey 8nding 0 ?espondents/ perception of consumer concern around ethical food
production as that consumers need to see a pro"lem "efore they ill "uy a
solution! This relates strongly to 4fair trade/ and animal elfare issues!
1!$!1 -TD5IAHHR T?AD-D A:D 43A5?T?AD-/ 3AAD
L3airtradeN is a trademark of the 3airtrade Ha"elling Arganisations 5nternational
=53A>& hich ensures products have "een sourced 4for a fair price/! 5t is used
internationally!
L3airtradeN is a 43airtrade/ is a trademark& hoever many companies& particularly
retailers& also promote their fair "uying policies& ithout e1plicit reference to the
"rand! This report treats "oth trademarked 43airtrade/ products and products that
are traded for a fair price "ut that do not carry the "rand under the category of
4ethically traded/!
The rise of ethically traded products has "een o"served in several markets over the
past fe years! Despite this& ethically traded products are still con8ned to a
relatively small range of horticulture products in most retail outlets B the most
visi"le "eing chocolate& tea and co@ee!
L3airtrade is another ma6or credence attri"ute B particularly in the co@ee and tea
categoriesN B ?etailer& )SA
The sector is noteorthy for its recent groth as 43airtrade/ la"elled goods have
gron at around +0% per year "eteen 2001 and 200+ =Heis& 200F>! 5t is still a
small segment& "ut like organic& its rapid groth has prompted interest throughout
the industry!
L3airtrade is a groing areaQ it/s smaller than organic& though! De8nitely still a 4high
end/ trendN B Supplier& )E
-thically traded goods are "eing marketed "y retailers to communicate their
Iorporate Social ?esponsi"ility =IS? is the integration of environmental& social and
economic considerations into "usiness strategies and practices> either through
e1clusively stocking a 43airtrade/ product& or "y o@ering a 3airtrade option ithin
product categories!
LMa6or companies have started to use fair trade products! The reason for this is not
"ecause of increased aareness "y consumers& "ut through a sense of corporate
social responsi"ility/o"ligation!N B 3ood media& Japan
-ither ay& consumers of ethically traded products are also looking for value B the
products tend to have a price premium so 2uality must "e maintained! This is
particularly important in Japan& here consumers have a very strong interest in
product 2uality!
L7hen e enter into a contract that allos a company to produce our private "rand
products& e make sure the factory doesn/t employ any children! 7e are trying to
implement the SA <000 U5nternational social accounta"ility standardV for our private
"rand products!N B ?etailer& Japan
As ethically trade products are& "y de8nition& aimed at increasing the income of
farmers in less developed countries& there is little scope for producers in developed
countries to directly access this market! Doever the rise of fair trade signals a
ider shift in consumer consciousness a"out the ethical implications of "uying
cheap products from sources that may "e treating their producers poorly!
1!$!2 A:5MAH 7-H3A?-
,ood animal elfare practices are generally desira"le to consumers "ut not top of
mind for many hen they are making their purchase decisions& according to
respondents! 9ery fe participants in the Delphi study commented on animal
elfare as a key trend in their industry!
5t is diKcult to add value to a product through good animal elfare credentials&
particularly if that product is competing ith products that do not make claims
a"out good animal elfare practices! At least one )E supermarket is eliminating this
pro"lem "y e1clusively sourcing eggs from certi8ed free range sources!
?espondents in the )E "elieved that legislation is driving good animal elfare
practices more than consumers at present B partly "ecause respondents felt )E
consumers "elieve that animal products ere produced to a high standard of animal
elfare already!
LThe )E is a nation of animal lovers& "ut also a nation that doesn/t really understand
farming!N Supplier& )E
5n Japan& respondents "elieved animal elfare attitudes ere related to product
2uality& safety and .iosecurity& as ell as ethical concerns!
L7e think e should "e aare of animal elfare! 3or e1ample for .S-& hen e
value health of livestock as a 8rst priority& pro"lems should not occurN B 3ood
service company& Japan
Some Japanese respondents also noted over8shing in the conte1t of animal elfare!
Aver8shing is seen as a signi8cant threat to the Japanese diet!
Special interest groups can inXuence the importance of animal elfare on the
media/s and therefore the pu"lic agenda! Poor animal elfare practices may
"ecome a pu"lic relations issue for companies if consumers are convinced their
practices are unsatisfactory! As ith general ethical "usiness principles& having
ro"ust animal elfare systems is practical assurance against adverse consumer
reaction!
2! Driver of the Trends
Trends toards credence products are driven "y a set of social& economic and
cultural changes that inXuence consumer attitudes and decisions! Delphi study
participants and indepth intervieees ere asked to identify the factors driving the
trends discussed! The results are as follos!
2!1 Iorporate Social ?esponsi"ility =IS?>
Iorporate Social ?esponsi"ility =IS?>O the integration of environmental& social and
economic considerations into "usiness strategies and practices!
L7ith magnitude comes responsi"ilityN B ?etailer& Australia
A strong message arising from this research is the role of the retailer or other
consumer pro1imal supply chain participants close to the consumer in inXuencing
the attri"utes of products that are sold! This is particularly evident in developed
markets such as the )E& )SA and Japan& "ut not con8ned to them!
The rise of IS? in the food industry as "oth an industry standard and a point of
di@erentiation for particular 8rms have seen credence attri"utes "ecoming more
important!
Almost all supermarkets operating in these markets not only pu"lish their IS?
reports alongside their annual reports& "ut also pu"licise their 4good deeds/
regularly through media releases and instore information!
The increasingly active role that retailers play as 4gatekeepers/ for products ith
credence& health or convenience attri"utes is e1tremely important hen considering
demand for these products in glo"al markets! 5f retailers are not interested in a
product& consumers have very little opportunity to access that product ithin
traditional markets!
7hy is IS? important to suppliersS 7hen customers =particularly retailers> "ase
their activities& in particular their sourcing strategies& on IS? principles& suppliers
are often re2uired to prove that they meet the particular IS? standards of their
customers! 3or e1ample B a decision "y a ma6or retailer to stock product ith
"iodegrada"le packaging ill re2uire the store/s suppliers to change their packaging
inputs and processes!
LUAur customerV anted "iodegrada"le packaging so e trialled card"oard and
"ioplastic on our productsN B Supplier& )E
IS? is also driven "y the ishes of investors! Several retailers in the )E and )SA
have a professed 4ethical/ investment strategy and it is suggested that companies
that are privately oned can more easily implement IS? activities than pu"licly
listed 8rms& as they are not ansera"le to shareholders! Doever& the groth in
interest in IS? has led some companies to adopt it as a strategy to appeal to
investors!
L7e have an -nvironment Steering ,roup& chaired "y our Ihief 3inancial AKcer&
that looks at food miles& sustaina"ility& energy usage of the company& etcN B
?etailer& )E
Eey 8nding 0 A"servation suggests that ne 4credence/ players have emerged that
have Eey 8nding led the trend ith IS? "uilt into their very foundations& and this
trend has "een folloed "y larger& less agile companies in pursuit of market share!
2!1!1 TD- 5MPA?TA:I- A3 IS? TA I?-D-:I- P?AD)ITS
Artisan foodsO products that are produced in a traditional ay& often "y small
operators! There is no clear de8nition regulating the use of the term "ut it is used
idely to descri"e foods that are not mass produced!
Artisan foodsO products that are produced in a traditional ay& often "y small
operators! There is no clear de8nition regulating the use of the term "ut it is used
idely to descri"e foods that are not mass produced!
Ane of the reasons that food companies choose to undertake IS? activities and
promote them to consumers is to position themselves as responsi"le and ethical&
thus encouraging consumers to feel comforta"le a"out shopping in their stores!
Some retailers have credence related IS? "uilt into their o@er& and others have
adopted these strategies in order to "olster their credi"ility in the face of increasing
competition!
The )S is home to several retail chains that use credence claims as their main point
of di@erence to achieve competitive advantage& at least in the short to medium
term! These companies stock products ith various credence attri"utes& mainly
organic& "ut also 4natural/ =a term that is almost uni2ue to the )S market and that is
considered to "e e@ective in communicating natural "ut not organically accredited
process attri"utes>& fair trade& localsourced& provenance "ased and artisan! Many
products represent more than one of these attri"utes to "olster their appeal to the
segment!
These stores also em"ody a kind of social responsi"ility that appeals to their target
market segment& thus giving them a strongly di@erentiated position! 5t gives them
an edge in appeal to the segment of consumers ho regularly "uy fresh& organic or
natural foods and ho are illing to pay for premium 2uality and ethically produced
goods!
L?ather than speci8c claims B such as organics B the real claim is more that e have
a total production system that is sustaina"le and cares for the environmentN B
?etailer& )S
7hen consumers choose to enter one of these 4credence/ stores& they have already
decided to "uy credence products& and are aare they ill pro"a"ly pay more for
them! As one respondent put itO
LThe consumer needs to have made up their mind Uto purchase credence productsV
"efore they even enter the storeN B 5ndustry analyst& )E
The largest of these )S 4credence retailers/ is 7hole 3oods Market& hich has
e1perienced a groth rate in sales of 20% per annum from 2000 to 200+ =Planet
?etail 200F>! This groth rate has "een reXected among similar retailers in this
market segment! This high groth has attracted the attention of the rest of the food
retail industry!
7hole 3oods Market and its ilk are niche operators& ith the former holding around
1% of the total )S retail market =Planet ?etail& 200F>! .ut the impact they have had
on the sector in the )S is apprecia"le! A respondent from Ianada noted ho retail
giant 7almart has responded to the trend B it no not only stocks organic as
mainstream products& "ut is orking closely ith suppliers to reduce car"on
emissions and their environmental footprint& a move consistent ith large retailers
in the )E and& in a smaller ay& Australia!
5n the )E& similar movements are evident among leading food retailers! The IS?
credentials of retailers are increasingly in the pu"lic spotlight through "oth their
on promotional activities and through the scrutiny of the media& and there are
signs that consumers are "ecoming more discriminating in this regard!
LIonsumers are "eginning to 2uestion 4price/ as a measure of value B 4ho can they
sell to chickens for + poundsSN B 3ood industry analyst& )E
The )E retail environment is considered to "e an e1tremely competitive and
sophisticated one =)SDA& 2000>! 3ood retail chains =or 4multiples/> continually
compete for market share and employ a range of strategies to entice loyalty from
consumers!
.o1 'O Marks P Spencer launches 4Plan A/0 Z200m 4eco0plan/
-1cept from media release& 1Fth 3e"ruary 200#
LMPS announces 4Plan A/& a "usiness ide 0 T200m 4eco0plan/ hich ill have an
impact on every part of MPS operations over the ne1t 8ve years! The 1000point plan
means that "y 2012 MPS illO
.ecome car"on neutral
-1tend sustaina"le sourcing
Set ne standards in ethical trading
Delp customers and employees live a healthier lifestyle
Send no aste to land8ll
Aur customers& employees and shareholders no e1pect us to take "old steps and
do "usiness di@erently and responsi"ly! 7e "elieve a responsi"le "usiness can "e a
pro8ta"le "usiness! 7e are calling this plan A "ecause there is no plan .!N

Some retailers in the )E have targeted the higher end of the spectrum ith
4premium/ products for decades and have marketed themselves on the "asis of their
IS? credentials for that time! 3or these retailers& credence o@erings such as
environmental sustaina"ility and ethical sourcing can "e seen as a natural
progression!
More recently& retailers are tending to focus less on competitive priceleadership and
more on valueadded propositions in order to escape the deXationary pressure that
has eventuated from ongoing lo price competition!
Eey 8nding 0 7hilst there ill alays "e a place for lo price food retail in almost all
markets& value can "e readily created "y di@erentiated products& and credence is
increasingly "eing recognised as a source of di@erentiation!
LThis Uadding value through credenceV is a "oon for retailers and manufacturers ho
ant to get out of price ars B they can develop products to meet this demand ith
higher margins! 5t/s reXected in "oth environmental and ethical food productsN B
5ndustry Analyst& )E
5n the Japanese market& DP5/s .eyond Price and Wuality research identi8ed that
ethical "usiness practices are of paramount importance! This re2uirement e1tends
to IS?& here environmental and ethical practices are increasingly used as pu"lic
relations tools!
LUSome Japanese retailersV use IS? for di@erentiation& raising favoura"le pu"lic
image! -ither ay& this issue is of "ene8t for Australian e1porters "ecause of the
clean and green image! Some corporations ork in IS? to avoid the corporate
image of pro8t8rst principalN 3ood media& Japan
2!2 An Ageing Population
L3ood and health is also a"out longevity! Those ith the most discretionary income
are those ho are a "it older and are concerned a"out the 2uality of their life in the
4senior/ years!N B Delphi Participant
L#0% of the total costs of your health care for your hole life come after you turn
F0!NDealthcare professional& Japan
Several indepth intervieees commented on the impact an ageing population is
having in demand for ne products in a range of food markets! This is nohere
more o"vious than in the health and ellness market!
As the 4.a"y .oomer/ generation approaches retirement age& its mem"ers are
"ecoming increasingly aare of their health and mortality! This has created a large
market ith strong demand for products that satisfy the desire for a long& healthy
life and that 8t into ageing people/s lifestyles!
2!$ A"esity
Trans fatty acids B also knon as trans fats B are formed hen li2uid vegeta"le oils
are partially hydrogenated or4hardened/ for use as spreads such as margarine&
cooking fats for deep0frying and shortening for "aking!
LA"esity is a huge pu"lic health issue! Today/s teenagers are slated to "e the 8rst
generation not to outlive their parents!N 3ood Scientist& Australia
3ood industry pundits in the )E consider o"esity =particularly in children> to "e a
ma6or driver for the health and ellness trend! Manufacturers have taken the
initiative "y "eing proactive in the call to remove trans fats from their ingredients
list! )E retailers are using the 4+ a day/ message& initially driven "y government& to
promote fresh and processed fruit and vegeta"le consumption! According to the
7orld Dealth Arganisation& o"esity is also a concern in the )SA& Australia and Japan&
although it as not raised as an issue "y respondents =7DA& 200#>!
LJamie Aliver/s school dinners had an immense impact on the landscape here! Pu"lic
opinion as shifted and policy changes folloed! ,overnment =advisers& scientists>
had "een trying to do this kind of thing for years "ut it needed pu"lic ill!N :,A& )E
LA"esity and health& linking the to is an opportunity for the fresh produce category
as people should eat more fresh fruit and veg!N B ?etailer& Australia
LThe true cost of o"esity and its "urden on the nation may start to get more pu"lic
and government attention!NDelphi participant
2!' Ionsumers/ -nvironmental Attitudes
LAne of the key drivers of consumer "ehaviour is environmental issuesN B ?etailer&
Japan
The de8nitions of 4green/ are varia"le "ut generally appear to focus on process
attri"utes B concerned ith the process of production 0 and thus re2uire the
consumer to give credence to the attri"ute!
5ntervie respondents felt that 4green/ food as a groing area in all the markets
considered! This is in line ith the 8ndings from .eyond Price and Wuality in 200'!
LMthe environment is a "ig issue Uin the )EV "ut there is little hard data on
purchase "ehaviourN/ B 3resh food producer& )E
Ionsumer interest in green food is driven "y perceived pro"lems ith
environmental management! 5n developed markets especially& media scrutiny of
environmental issues has gron intense!
L-nvironmental sustaina"ility has reached a 4tipping point/ here it is everyhere!
,uilt is driving a lot of the UconsumerV interest and retailers are responding as they
ould ith any other trendN B 3ood industry analyst& )E
This research suggests that much of the move toards environmental sustaina"ility
and ethical sourcing is driven "y social and political events and agendas! ?etailers
are responding to this changed situation "y implementing environmentally
responsi"le IS? plans!
LU-nvironmental sustaina"ilityV is increasingly important& particularly over the last
year and increasingly going forard! 5t is currently the key element in competition
"eteen the ma6or food retailers!N B Delphi participant& )E
2!+ Technological 5nnovation
L5nnovation comes through process attri"utes& not through sensory attri"utes!N 3ood
retailer& )E
Technological innovation in the food industry is also responsi"le for a rise in foods
ith functional attri"utes! 3or e1ample& microave technology stimulated a hole
ne cooking style and revolutionised the market for fro(en precooked meals that
are simply defrosted and eaten!
A signi8cant proportion of contemporary food retail Xoor space is devoted to chilled&
ready to eat meal 4solutions/! The segment has gron "y '% per year in the )SA
and Japan and F% per year in the )E over the past + years =-uromonitor& 200#>! The
increased a"ility to purchase convenient& healthy& tasty products is a direct result of
technological advances in food preparation& food safety management and logistics!
LPrepared fruit is huge! Aur customer sells more prepared melon than unprepared
=at a mark up[>!N B 3ood supplier& )E
2!F Media and the Pu"lic Agenda
L5t/s on the nes every night!N B Supplier& )E
,lo"ally& the media has an enormous inXuence on consumer purchase decisions on
a daily "asis& either through direct advertising& or indirectly through nes reporting
and lifestyle media! Australian& )E and Japanese intervieees noted the impact of
the media on their consumer markets& particularly ith regard to health attri"utes
of food!
LThe role of the media is particularly clear in Japan! 5n one e1ample a recent
program on T9 gave some false information a"out the health "ene8ts of natto
paste! Ionsumption e1ploded and the product sold out in supermarkets in one night
folloing the program/s airing!N B 3ood supplier& Japan
An intervie conducted ith a media representative highlighted the positive role
that the media can have in promoting the healthy food message to consumers! 5t
as suggested that an education process as necessary and that this should start
ith school age children!
L7e need to educate consumers around food "asics in freshness and usage!N B 3ood
6ournalist& Australia
,overnment policy also drives interest in health attri"utes to an e1tent! :ohere is
this more overt than in the )E! The )E ,overnment is driven "y large scale social
policy& particularly in pu"lic procurement and the recent& ell pu"licised drive
toards healthier school meals!
The media also plays a role in pu"lic aareness of environmental attri"utes!
LStudies like 4eight of packaging/ =pu"lished "y a )E nespaper> B supermarkets
don/t like that kind of negative pu"licityN BSupplier& )E
LU7hat/s driving the 4green trend/SV ,overnment legislation& much of hich is
inXuenced "y :,As& media and nespaper columnists! .ut& people are "ecoming
ary of claimsN B :,A& )E
7hat this demonstrates is not that the media doesn/t have an inXuence on
consumer attitudesQ "ut that the inXuence is comple1 and environmental
preferences are often "ound up ith other demands& such as 2uality or
healthfulness!
,overnment agenda& legislation and regulation may also inXuence consumer
concerns ith regard to the environment! 7hilst compara"le data from other
countries as not found& several )E respondents made mention of ne or even
anticipated legislation from the national government or the -uropean )nion
designed to protect the environment or consumers! Pu"lic 8gures& keen to stamp
their environmental credentials& have also inXuenced the de"ate!
L-nvironmental responsi"ility is driven primarily "y legislation! 7ithout it&
companies ouldn/t do it unless there/s a competitive advantage! They can/t a@ord
it!N B Supplier& )E
$! Ionditions
The folloing section outlines ma6or factors that are impacting on credence trends B
not as the drivers of trends& "ut rather as pree1isting conditions that are re2uired
for trends to continue to gro!
$!1 3ood Safety
.eyond Price and Wuality found that food companies generally placed more
importance on food safety than they felt their consumers did& and furthermore& took
their commitment to food safety very seriously =DP5 200'>! Thus& this research
assumed that consumer demand for food safety is an area that is ell understood
"y the food industry as a condition for doing "usiness!
.eyond Price and Wuality also found that the terms 4safe food/ and 4clean food/ ere
perceived to "e commensurate or interchangea"le in many markets! Therefore this
research has not attempted to distinguish "eteen the to in data collection =DP5&
200'>!
L3ood safety messages have gotten through to the consumer and they/re no
interested in more 4e1citing/ things! The Avian 5nXuen(a out"reak here at present is
a case in point B people aren/t all that concerned =although they/re not "uying
turkey>!N B 3resh food supplier& )E
Eey 8nding 0 3ood safety as therefore not top of mind for respondents hen
discussing credence trends! Doever& several did mention food safety as an
important area to maintain control over and that "reaches or perceived "reaches of
food safety could have disastrous e@ects for companies!
5n Japan& An(en and Anshin or 4safety and peace of mind/& are very important to
consumers and respondents felt that food companies must remain vigilant!
A Ihinese respondent commented that food safety& along ith 2uality and
healthfulness& as a key determinant of consumer "ehaviour& and that media
e1posure of food safety "reaches has contri"uted to consumer aareness of food
safety issues!
LThe pu"lic didn/t realise ho dangerous their food consumption as until several
incidents ere e1posed "y the media! This includes pro"lems such as pesticide
residues in vegeta"les and fruitM People are pickier noN B 3ood industry
association& Ihina
$!2 7here did it come from and ho did it get hereS Tracea"ility in Action
LTrack and trace is still a huge area that needs ork across all industries! 5t ill
underpin all the credence and other claims made a"out products!N B Delphi
participant
The e1panded 4credence/ o@ering made "y many products& particularly in mature
markets& has only increased the importance for tracea"ility in the supply chain!
Tracea"ility systems and tools are necessary for successful 4credence/ product
o@erings!
Ance seen as a di@erentiator "eteen premium products in informationhungry
markets such as Japan& product tracea"ility has no "ecome essential in any
market here products that make claims such as provenance& organic& fairtrade or
other credence attri"utes are availa"le!
LTrace"ack systems are critical to su"stantiating provenance and keeping markets
openN B 3ood industry analyst& Australia
LThere has "een a true revisiting of food safety! Tracea"ility is no seen as a "ene8t
to producers& rather than 6ust another "usiness costN B ?etailer& Australia
Tracea"ility systems do not only relate to food safety& "ut are also a means of
su"stantiating 2uality and credence attri"utes!
Tracea"ility systems are not homogeneous and can look very di@erent to one
another =DP5& 200#>! 3rom highly mechanised& "ar coded and electronically
integrated systems to more simple systems "ased on good supply chain
relationships and communication& the primary reason for tracea"ility systems is to
ensure that product 2uality and integrity is maintained! This purpose 8ts neatly into
the premise of credence attri"utes& hich rely on the consumer trusting that the
supply chain can assure the credentials of the products they "uy!
Despite the high priority placed on tracea"ility systems& some respondents felt that
the systems in place do not currently live up to e1pectations!
LActual implementation does not happen so often =$+%> even though it attracts
consumers/ attention! Ma6or companies have started to use tracea"ility "ut medium
and small companiesM do not implement often!N B 3ood industry media& Japan
$!$ Trust
LIonsumers ant details& they ant assurance!N B 3ood industry analyst& )E
At the heart of marketing credence attri"utes is the importance of trust B "oth
"eteen the consumer and the supply chain& and ithin the supply chain itself!
7hilst the latter is an issue that individual supply chains must manage ithin their
on frameorks& the issue of consumer trust can "e e1plored as a condition for
consumption of products ith credence attri"utes more generally!
Ilosely aligned ith IS? B consumer trust can "e engendered "oth through the
promotion of socially responsi"le activities and through the implementation of
accreditation and trace"ack schemes for products!
LTrust has alays "een a ma6or factor in food "rands =Dein( "a"y food& for
e1ample>& "ut retailers such as 7hole 3oods have e1panded the notion of trust!
Trust no em"races la"our utilisation& fair trade& for e1ample& and fairnessN B 3ood
industry analyst& Ianada
L7e alays try to act ethically M"ut need to rely heavily on manufacturers in terms
of product information and declaration for compliance! Therefore& strong
cooperation and "uilding trust relationship ith manufacturers ould "e important
to our "usiness!N Distri"utor& Japan
The e1pansion of trust from the product to the company& as noted a"ove& does not
remove the rest of the supply chain from the e2uation! Doever& companies that
are e1panding their 4on product/ line B most large retailers in the )E& )SA&
Australia and Japan& not to mention their su"sidiaries across Asia and other regions
B are assuming a greater role in product integrity than they have previously!
$!' Accreditation
Similar to tracea"ility& the a"ility to place an accredited la"el or logo on a product
allos producers to make claims a"out the attri"utes of their products! Although not
directly addressed in the research& some respondents mentioned accreditation as a
useful ay for producers to capture value and increase market share!
4Iompetitive advantage "ased on our 4image/ is on shaky ground! There needs to "e
an internationally recognised standard for environmental attri"utes/ B 5ndustry
analyst& Australia
.o1 +O The Hion Mar2ue B here accreditation gets results
The .ritish egg industry/s Hion Mar2ue is an e1ample of here an assurance scheme&
designed primarily to reassure customers of food safety& has led to increased sales!
?e0launched in 1;;< in response to pu"lic concern a"out salmonella contamination
in eggs& only eggs from chickens vaccinated against Salmonella enteritidis could
carry the "rand! The "rand as launched after market research indicated that health
issues ere high on consumers/ agenda =particularly parents/> =Parker& 2002>! The
industry also invested signi8cantly in marketing the "rand& to hich the industry
association attri"utes a large measure of its success!
L5t Uthe Hion mar2ueV is the "est recognised food assurance logo in the )E!N B 3resh
food supplier& )E
$!+ Planning Dori(ons in the Supply Ihain and 5nnovation
LSimply getting relia"le product on the shelf every day& and managing the ma6or
e1ecution issues such as discounting and astage& is our main preoccupation!N B
?etailer& South Eorea
?etailers encounter a num"er of competing pressures in their daily operations! An
the one hand& strategy is developed over a long planning hori(on =8ve years> and
implemented over time! An the other hand& supply limitations and other unforseen
events may create short term responses that impact on strategic thinking at a
managerial level!
Despite this& some respondents said that important decisions made "y retailers and
suppliers ere sometimes in direct response to consumer interest in particular
attri"utes or "rands& rather than as part of a long term strategy! This is important as
it highlights the diKculty some retailers/ face in driving innovation ithin their
"usiness!
Some respondents felt that supply chain partners encouraged them to innovate and
that this relationship as an important part of these innovations!
L7e tend to rely on supplier innovation for speci8c product innovation! Suppliers
kno that they ill have a receptive audience for such ne product ideas!N B
?etailer& )SA
,ood relationships ith donstream partners ere mentioned "y several suppliers
as "eing conducive to process and product innovation& here supply chain partners
trusted one another to gro value for the hole chain!
L7e have gron rapidly as our ma6or customer has e1panded B e have a very
good relationship ith them M 5nnovation is a huge part of our "usiness! 7e try and
stay ahead of the consumer Uthrough research and partnering ith customersV!N B
3ood supplier& )E
$!F Ha"elling and .randing
LHa"elling is a key issue! Res& consumers desire 4healthier living/ products& hoever
fat free etc! la"elling is misleading and they think they are making healthier choices
hen in fact they may not "e[N Delphi participant
Eey 8nding 0 Truth in la"elling and the e1tent to hich producers can make claims
a"out the attri"utes of their products is a key condition for the groth of the
credence market!
The readiness of consumers to trust producers is critical to the success of credence
products& and the information made availa"le to them& "oth in its content and
trustorthiness& plays a large part in that communication!
LTruth in la"elling is key!N3ood riter& Australia
According to the Dartman ,roup =a )S "ased consulting company specialising in
health and ellness& the role of "randing has not yet played a signi8cant role in the
evolution of the consumer of health and ellness products! This is "ecause the
ellness category is a nely emerging category and "rands have yet to esta"lish
signi8cant traction =Dartman& 200#>!
Iurrently 4the "rand/ has the "iggest inXuence hen consumers 8rst look to
purchase a product and their preference ill "e for familiar "rands!
.randed products that carry credence attri"utes often have to im"ue their product
ith the credence message! An alternative to this is to carry a la"el or "rand that
represents the pu"lic interest!

Iompanies/ using the logos of accreditation "odies can market their products "ased
on the credentials of the la"el! 3reedom 3oods& a la"elling scheme set up "y
.ritain/s ?SPIA in 1;;' has e1perienced high levels of groth as consumers have
taken the trusted organisation/s assurances of high animal elfare standards! The
scheme undertakes marketing and product promotion on "ehalf of the products it
certi8es to increase e1posure and ma1imise value for the producers =?SPIA& 200#>!
There as some divergence in opinion from respondents regarding la"elling that
displays 2uality assurance! 7hilst some felt that more la"elling as "etter others
felt that here consumers are con8dent in an attri"ute such as food safety& spelling
it out on the la"el does not add value!
LWA B the consumer 6ust ants it to "e simple[N B ,overnment representative&
Australia
Eey 8nding 0 This highlights one of the most important issues for credence
attri"utes B the consumer must "elieve that the product is addressing some need or
gap that e1ists! .randing for "randing/s sake ill not increase the value of the
product!
LAur capacity to communicate the claim to 8t the "elief of the consumer is critical!N
B ,overnment representative& Australia
;+<<N- it too" decade #or this !ar"et to co!e up. It has rooted #ro! al!ost e$erything #ro! (ater to energy and to
#ood. Li"e in the case o# (ater (hich has #i'ed a!ount in our planet but other people thin" that it is abundant and
doesn=>?t ha$e to be protected. 9ut in reality, (ith the continuous gro(th o# population, (ater is beco!ing scarce.
@o!e o# the things that you can gi$e attention to are #uel=>?s alternati$es, reusing o# (ater, ser$ices in recla!ation,
organics, and clean energy.
<CANAM4- the trend no( (hen it co!es to the consu!ers purchasing is trading do(n, not trading up any!ore. This
is the result o# the do(n#all o# the econo!y globally. @o!e o# the trade opportunities during this ti!e are #uel
alternati$es, business coaching and credit and debt !anage!ent.
B<ALTB- (ith the help o# the aging boo!ers and the (eb, the younger generation "no(s !ore about health.
No(adays, health !aintenance doesn=>?t stop (ith the daily inta"e o# $ita!ins ratherC people (ant a round the
cloc" a$ailable and con$enient access to the in#or!ation about their health.
MILL<NIAL@- bridging the generation gap is one o# its concerns. This !illennial are still a!ong the hottest potential
!ar"et #or this year. 8or !illennial, authenticity is the !ost i!portant part o# ad$ertising.
9AAM<+@- the biggest trans#er o# (ealth in history are represented by the boo!ers (ho also started the green
!o$e!ent. <ntrepreneurs shouldn=>?t thin" that boo!ers age (ill indicate their place in li#e because #or the!
age is only a nu!ber.
:I;ITAL- (ith the po(er o# the technology no(adays, endless opportunities in business can be #ound in the (eb.
Also, !obile applications (ill continue to gro(.
A::@ and <N:@- so!e products, despite ha$ing so!e o# disad$antage (ill continue to be popular. Thin" about
bacon that a!idst so!e cities creating la( against trans #ats are able to surpass the challenges and continue to be in
popular in the !ar"et. There is also the so called con$erting trash into treasure such as recycling plastic soda bottles.
Food Forecast: 10 Trends for 2010
Jenny Orillos | Published: Jan 4, 2010 - 7:42am
While I'm still mulling over what will dislodge cupcakes as an enduring trend in 2010, I've come up
with a list of food and foodrelated trends to watch out for in the coming months! In creating this
forecast, I went with m" gut and what I've spied recentl" in local supermarket shelves, restaurants,
and maga#ines as well as recent reports in the international food scene!
In no particular order, here's what could $e on our ta$les this "ear:
1. Gourmet for the masses. The signs are on the supermarket shelves%from gourmet penne pasta
made with real semolina flour &$" a local $rand' and pasta sauces, chefinspired premium ice creams
to potato chips in sea salt and other gourmet flavors! (ocal $rands are taking note that we, the
masses, are trading up our palates! We're read" to taste newer and more sophisticated flavors, so
e)pect more gourmet stuff in the market!
2. Chicken inasal is the new lechon manok.With its achuetetinged, tender meat grilled to
perfection dipped in sinamak, so" sauce and chilies, we *ust can't have enough of
chicken inasal. Though I have not come across a chicken inasal stand a lalechon manok "et, this
Ilonggo$orn grilled chicken continue to create more restaurants%all $earing the term +inasal+%in
*ust a$out ever" district in the ,etro!
3. Artisanal, handmade and home-made.-ome $akers, ice cream makers, and smallscale
food producers create products the" themselves will not hesitate eating! The" know the pulse of their
market &foodies like themselves', and churn out these products on a $igger scale so ever"one gets to
share the good stuff! We know the" put a little more care, passion and love so it translates into their
products and to the consumers! International restaurant consultants .aum and Whiteman call it +the
campfire e)perience%$uilding emotional ties and connecting to communities!+
4. More "combo meals" in hih end restaurants. With the econom" still reeling from the
recession, restaurants will not hesitate to offer recessionfriendl" menus so people will continue to
dine out! That means, full course meals, chef specials and the like will $e ours for the taking!
!. More lu"ur# brand restaurants and caf$s./n the flip side, Filipinos love the good life and
will not hesitate to plunk down their hardearned pesos for a taste of it! With the presence of .acchus
0picerie in 1ockwell since late 2002 and the opening of a new -a34 5gen6a#s caf7 &at 1o$insons
8lace 0rmita' and the ,aitre 9hocolatier .outi:ue 9af7 in ;upiter <treet &which serves Ferrero
1ocher and (indtinspired desserts' in 200=, more are sure to follow!
%. Celebrities as chefs. 0ver since ;uda" earned her diploma in cooking school, more and more
actors, actresses and cele$rities are em$racing their inner foodies! The latest actress to graduate
from >ene >on#ales' 9enter for 9ulinar" ?rts is actress &anice de 'elen who's $een earning her
chops as a cooking show host and product endorser!
(. )u*ermarket delis. <upermarkets have made deli products like sandwiches, cold cuts, cheeses,
sausages, gourmet groceries, and hot dishes more accessi$le $" $ringing the e)perience onsite! ?fter
customers are done shopping for the $asic stuff, supermarkets now provide :uick gourmet meals in
their ver" own corner delis and dining areas!
+. ,ealth# an#thin. ?ntio)idants, pro$iotics, vitaminenriched, organic, fatfree, light, sugar
free and #ero transfat continue to $e the $u##words of our local consumer food products! Whether in
teas, fro#en "ogurts, ice creams, allpurpose creams, light fruit cocktails, fastfood meals, even
corned tuna and vegetarian chicharon, it's good to know we have healthier alternatives! 1eal health"
food &without enhancements or su$tractions in their makeup' also continue to, er, sprout%I'm eager
to tr" a glass of wheatgrass and kefir!
-. Culinar# school-connected restaurants. What $etter wa" for schools to train students for
the real world &i!e! restaurants with pa"ing customers' than to run a restaurant ne)t door@ From
I<-9?,'s 9elsius >astrolounge and ?u$ergine 1estaurant and 8atisserie to 0nderun's 1estaurant
101 and ,I-9?'s Illumine 1estaurant, it's a delicious learning e)perience not onl" for the students
$ut also for us diners!
1.. /ower of the collecti0e1food blos and bloers. This trend, which I $orrowed from 8hil
(empert &a +<upermarket >uru+' and his own forecasting for 2010, has also $een happening in the
8hilippines! -e sa"s, +It's a new world of +wordofmouth+ recommendatio ns using the latest
technologies:mo$ile devices, momm" $loggers, Twitter and house parties! In 2010, shoppers will
depend less on advertising and more on social networking and killer apps to help them make their
decisions on where to eat and what foods to $u"!+
<o true! I'd $u" what ,arket ,anila or 6essertcomesfirst!com is currentl" raving a$out without
$atting an e"elash, have what Franco at Ta$le for Three 8lease is having, or go to a restaurant that
?nton 6ia# of /ur ?wesome 8lanet and his famil" recommends! The" are authorities to a $log
reader like me as much as an" of the local pu$lications! ?nton even created his own taste testing
event to feature foods that we would onl" stum$le upon via wordofmouth! 81 companies are also
taking notice of the +new media+%$loggers continue to receive invites to food events, sometimes
e)clusive onl" to them! ?midst all these, we *ust have to separate the wheat from the chaff!