There is a terrific piece in the June 1 edition of Fortune that looks at how "the top 25 U.S. food and beverage companies have lost an equivalent of $18 billion in market share since 2009," at least in part because these "big food" companies are also losing relevance with consumers who are interested in authentic companies that make real food rather than behemoths that manufacture products loaded with ingredients that few people can pronounce.
These companies are losing sales because they are losing the hearts and minds of their customers, but also because there are new companies emerging - especially because of a new interest in investing in the food industry - that are offering alternatives.
"In some ways it’s a strange turn of events," the story says. "The idea of 'processing' - from ancient techniques of salting and curing to the modern arsenal of artificial preservatives - arose to make sure the food we ate didn’t make us sick. Today many fear that it’s the processed food itself that’s making us unhealthy."
The story goes on: "It’s pretty simple what people want now: simplicity. Which translates, most of the time, to less: less of the ingredients they can’t actually picture in their head.
"While consumers have long associated the stuff on the labels they can’t pronounce with Big Food’s products—the endless strip of cans and boxes that primarily populate the center aisles of the grocery store—they now have somewhere else to turn (more on that in a bit). And that has brought the entire colossal, $1-trillion-a-year food retail business to a tipping point.
"Steve Hughes, a former ConAgra executive who co-founded and now runs natural food company Boulder Brands, believes so much change is afoot that we won’t recognize the typical grocery store in five years. 'I’ve been doing this for 37 years,' he says, 'and this is the most dynamic, disruptive, and transformational time that I’ve seen in my career'."
What takes the story most interesting is not just how it frames the issues, but illustrates how "big food" companies are trying to solve the problem. One example: Campbell Soup Co., where CEO Denise Morrison has been trying to "shift the center or gravity" with the acquisition of companies such as Bolthouse Farms and Plum Organics. While these acquisitions have been important, equally critical has been Morrison's decision not to impose Campbell's DNA on them, but rather learn from them and their leaders - while at the same time not losing focus on the engine that drives the business (also known as its core soup business).
Fascinating piece, and you can read the entire story here.
These companies are losing sales because they are losing the hearts and minds of their customers, but also because there are new companies emerging - especially because of a new interest in investing in the food industry - that are offering alternatives.
"In some ways it’s a strange turn of events," the story says. "The idea of 'processing' - from ancient techniques of salting and curing to the modern arsenal of artificial preservatives - arose to make sure the food we ate didn’t make us sick. Today many fear that it’s the processed food itself that’s making us unhealthy."
The story goes on: "It’s pretty simple what people want now: simplicity. Which translates, most of the time, to less: less of the ingredients they can’t actually picture in their head.
"While consumers have long associated the stuff on the labels they can’t pronounce with Big Food’s products—the endless strip of cans and boxes that primarily populate the center aisles of the grocery store—they now have somewhere else to turn (more on that in a bit). And that has brought the entire colossal, $1-trillion-a-year food retail business to a tipping point.
"Steve Hughes, a former ConAgra executive who co-founded and now runs natural food company Boulder Brands, believes so much change is afoot that we won’t recognize the typical grocery store in five years. 'I’ve been doing this for 37 years,' he says, 'and this is the most dynamic, disruptive, and transformational time that I’ve seen in my career'."
What takes the story most interesting is not just how it frames the issues, but illustrates how "big food" companies are trying to solve the problem. One example: Campbell Soup Co., where CEO Denise Morrison has been trying to "shift the center or gravity" with the acquisition of companies such as Bolthouse Farms and Plum Organics. While these acquisitions have been important, equally critical has been Morrison's decision not to impose Campbell's DNA on them, but rather learn from them and their leaders - while at the same time not losing focus on the engine that drives the business (also known as its core soup business).
Fascinating piece, and you can read the entire story here.
- KC's View:
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One of the things the story doesn't really talk about is whether the notion of "big food" as being inauthentic and artificial will ever extend to big food retailers. I don't think so, since a lot of them have dealt with it by doing abetter job of niche marketing around the margins, trying to eliminate any sense that they are monolithic and disconnected from the community.
But that said, it is something about which I think major retailers need to be careful. If they don't nurture their product selections and community connections, they could run afoul of the same consumers who are pushing "big food" in unexpected directions.
