Connecting with the Consumer

“Connecting with the consumer is not just for direct sellers”

Unless targeting products to industrial markets, such as high erucic acid rape for plastics, the marketing decision of what to produce should take account of what consumers look for in the products they are buying. This applies not only when selling direct to the public, but when selling to a processor/packer/grain merchant - and even when selling stores to be finished by another farmer.

The consumer may seem a long way from the farm gate, but to dismiss the consumer from farm thinking is to dismiss the opportunity for added value and therefore increased profit.

The amount the consumer spends on an item dictates how much money is available in total through the supply chain. The more money spent on an item, the more cash there is available to be divided among the players in the chain, and the more chance there is of farmers getting a higher price for their production. Secondly, consumers dictate the demand for a product which is why some markets are growing, and some shrinking. Selling into a market segment which is growing, and where demand outstrips supply, generally means higher prices.

So what are the key consumer trends, and how are they translating into real life market place examples?

The key trends which have a direct impact on production decisions are:

The number of older people in the population is growing rapidly.With ageing comes a search for products which keep us fit, healthy and young looking.
Income levels are rising, and the majority now have spare cash to spend on luxuries, including premium quality foods. In fact, recent research indicates, contrary possibly to popular belief, that just 12% of UK consumers purchase food on price alone.
Education levels are rising, as is social awareness. This brings with it concern about issues such as the environment, animal welfare, traceability, use of food additives, and interest in local foods which are seen to provide an answer to many of these issues. Better education has also led to better understanding of the link between diet and health. Of course increased affluence plays a part in that consumers have the money to pay a premium for things that matter to them, or to avoid products they feel have an adverse effect.
Society is becoming increasingly multi cultural, and demand for ethnic foods is growing.
People are working longer and longer hours. This has resulted in an explosion of demand for convenience foods, not just pre packed ready meals, but for quickly cooked food such as chops and steaks.
Obesity, and the role of diet as a contributor to it, is being cited as the biggest health challenge of the 21st century.

A direct connection can be made between these trends and decisions about what to produce on farm. The table below illustrates a range of products which are in tune with consumer trends. Many of them result in a premium price being paid to the farmer. The examples are drawn from articles in Farmers Guardian, and examination of products available in the shops.

Trend	Farm Enterprise	Product	Comment
Health	Arable	Borage Linseed Naked oats Quinoa	High gamma linolenic acid content (omega 6 oil). Said to aid skin conditions, reduce joint inflammation. Linseed used for premium breads. Higher protein, energy and oil content than traditional oats. Used for premium cereals/bread. Alternative cereal for consumers avoiding wheat.
	Milk	Organic milk Spreadable butter	Claimed to contain higher levels of omega 3 oils. Thought to prevent heart disease. From cows fed only on grass, bought by consumers wishing to avoid additives.
	Eggs	Omega 3 enriched	Omega three oils said to help prevent heart disease.
	Beef/Lamb		Higher prices paid for lower fat class as most consumers will not buy fatty meat.
Appearance	Arable	Echium	Said to fight wrinkles/ sooth sunburn damage.
Premium	Beef	Hereford Angus	Consumer pays extra for specific breed.
Premium	Eggs	Coloured eggs	Consumer pays extra for novelty product.
Animal Welfare	Livestock	Freedom Foods	Consumer pays extra for animal welfare
Animal Welfare	Eggs	Free range eggs	Free range now accounts for over 25% of egg sales.
Traceability	Arable	Malting barley	Japanese brewer seeking fully traceable product.
	Chickens	Free range	Name of farmer shown on pack, reassures that product is fully traceable.
	Strawberries		Name of farmer shown on pack.
	Milk		Supermarket contract awarded on basis of traceability.
Local	Livestock/fruit/veg		High consumer interest, but not widely available.

Farmers grappling with the question of what to produce might consider the following actions.

· Think about what you can produce which fits with a consumer trend, and offers a benefit over and above a basic commodity. This may mean a small change to an existing enterprise, such as a focus on traceability or animal welfare, or a more substantial change such as working with a new breed or planting a new crop.

· Aim to sell at least some production into a growing and premium price market segment. Monitor the supply/ demand picture closely.

· Take a view on the costs of changing an enterprise as well as the income benefits.

· Have a preliminary talk to the immediate customer about the market research information gathered. If this is a business customer assess how aware they are of the trends. Also check out their views of the opportunity and profitability of the products in question. It is important to work closely with the immediate customer to ensure that a profitable market exists for the proposed product.

Tailoring production to connect with consumer trends is the first step towards adding value.The next is to understand what else will persuade the customer to write a bigger cheque for the farmer’s product. Detailed methods of working with business customers to add value will be explored in future columns as will selling direct to the public.