Meeting finicky consumers’ demands
Meeting the needs of a finicky consumer is hard – but essential for success in the evolving global marketplace. And it’s something farmers need to start committing to, according to a popular agricultural economist from Kansas State University.
“We need to understand consumer needs and how ungrateful they are,” said Dr. Vincent Amanour-Boadu as he addressed livestock farmers at the recent Making tough decisions in tough times conference in London ON. “And we’ve talked about this long enough – now we need to start committing to success.”
Consumers’ psychological needs influence their behaviours, which means consumption patterns change when income and consciousness increase. Simply put, people become more demanding as they get wealthier, and as their basic needs for food and shelter are satisfied, they start focusing more intensely on other things.
To illustrate this point, Amanour-Boadu pointed to the example of Heritage Foods, a project he’s been involved with in Kansas. Heritage Foods is a turkey farm that used to sell conventional birds – about 1,500 per year for $4/lb. Now they raise traditional, purebred turkeys and market them as a heritage breed. In 2007, they sold 27,000 birds – mostly for Thanksgiving – for $10/lb, and according to Amanour-Boadu, it’s all in the marketing and in understanding consumer needs.
“People weren’t buying a turkey,” he said. “They were buying a piece of American history to go with their traditional American holiday.”
Consumers increasingly care about stewardship and social justice, a trend that is evident in the growing popularity of niche market products, such as Berkshire hogs or heritage cattle breeds. Of course, the downside of that growing popularity is that every successful niche is a commodity in the making and once demand reaches a certain point, more people will enter the market and drive the price down.
Since the 1950s, beef, pork and chicken have been the leading protein meats in North America, with consumption increasing as societal wealth grew. Red meat is the leader in the animal protein market – 99% of all Americans eat meat and 94% of them are red meat eaters. More than 65% of all meat consumption is red meat, which also means beef and pork still dominate shelf space at the grocery store. But it’s time to think about the future and not take those numbers for granted, Amanour-Boadu warned.
“Defense doesn’t work well in this emerging market,” he said. “We have to start being proactive and not be complacent.”
So how can the livestock industry be proactive? Amanour-Boadu suggests doing innovative work to get headlines by asking different, interesting questions. Consumers are seeking easy solutions to their problems, and will gravitate towards those products that provide them.
“Consumers want easy solutions to their problems – to them, plastic surgery is easier than working out,” he said. “So we have the challenge to provide innovative solutions and answers.”
The supply chain as a whole benefits if livestock farmers grow their share of the plate – but they need to work as a group with common benefits. This means working together to drive out unnecessary costs – most of which are transaction costs stemming from lack of co-ordination along the supply chain. And most importantly, share the benefits of the value created. All supply chain partners have to benefit for this to be successful.
The Making Tough Decisions in Tough Times conference was initiated by the Ontario Pork Industry Council (OPIC) and supported by Farms.com, Ontario Pork, Ontario Veal Association, Ontario Agri-Business Association, and the Ontario Ministry of Agriculture, Food and Rural Affairs. Funding was also provided in part by Agriculture and Agri-Food Canada’s CanAdvance program, administered by the Agricultural Adaptation Council. Visit www.toughdecisions.ca for more information about the event.