Consumers in Northwest Europe are increasingly prepared to pay for food with a good story about origin or production method. In this way, this consumer has more and more influence on the food chain. ABN Amro establishes this in the Edition Short Chains.
The attention for the way in which food is produced has grown enormously in recent decades. This led to pressure on farmers and market gardeners to invest in more expensive production systems. That didn't feel right to them because price often remained the guiding principle for consumers and the processing industry. But this is changing, and this trend is increasingly translating into different consumer behaviour. More and more consumers in Western Europe are paying attention to the origin and production method of the food they buy. And pay extra for products with a good story. This consumer has more and more influence on the food chain.
Changing sales channels
Consumers are buying their food through an increasing number of different channels. Think of sales via gas stations, via websites, food boxes, delivery services such as Foodora, forms of catering such as La Place, etc. Combinations of retail, services and catering, the so-called blurring, are also becoming more common. More than 60% of food in the Netherlands is sold through channels other than the supermarket. Supermarkets are also looking for distinctive character and are responding to the trend of food with a story. This offers opportunities for producers who want to distinguish themselves.
Food with a story
A story is easiest to tell if you sell products directly to the consumer. But that is often not possible. The bank has noticed that sales are increasingly taking place via short chains. A chain becomes shorter as there are fewer links between producer and consumer. Intermediaries often play an important role. For example in processing, distribution, packaging, directing, marketing, etc. But each link can also have a negative impact. For example on transparency, on freshness, on authenticity, storytelling or on costs or. margin.
Priceless
A short chain is not the holy grail, says ABN Amro. It is primarily a means of reducing the distance between producer and consumer. Sometimes this is a physical matter, but often also mainly a matter of mental distance, whereby the consumer has the feeling that he is close to the producer. Every link in the chain that adds value has an important role. It is important to remain critical of the added value of each link.
The bank points out that the market is changing and offers opportunities to recover or stabilize margins that have been lost in recent decades. The secondary yield is; more feeling for your own product and more appreciation by consumers and citizens of inestimable value.
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