Remaining competitive in the global food industry

January 25, 2010 
James Ferre AFN, Food For Thought, www.ausfoodnews.com

In the past, processors' success was based around a simpler business model that
focused on manufacturing, logistics, customer service and low prices. However,
future success will be based on consumer insights, brand management, product
development and innovation, according to a new report from American-based Deloitte.

"To achieve alignment with the future requirements, companies need to drive change
throughout the organization and reduce the focus on things that were historically
important but are less important in today's market," according to Stephen Brown,
National Leader, Consumer Products, Deloitte.

Concerns about food safety are still high
In recent years, North America has experienced several high-profile food-safety
incidents that have spanned a range of processing sectors and have originated from
within Canada, the United States and abroad. It is not surprising that today food
safety is top of mind with consumers. The report also reveals that 83 per cent of
consumers can name a product that was recalled due to safety concerns in the last
two years; 76 per cent of consumers report they are more concerned today than they
were five years ago about the food they eat; 57 per cent of consumers have stopped
eating a particular product because it was permanently or temporarily recalled.

How to remain competitive in a global industry
Today's supply chain is becoming increasingly global in nature and it is imperative
that processing organizations look beyond their regional and national borders in
measuring performance and developing competitive strategy, the report authors noted.

They pointed to three key success factors that will help food and beverage
processors remain competitive:

* Aggressively manage costs. Volatile input costs and currency exchange rates, an
increasingly cost-conscious consumer and competition with low-cost regions make cost
containment pivotal. The ability to offer competitively priced products is now more
important than ever given the increasing competitiveness of the industry.
* Take safety seriously. Consider obtaining the endorsement of a recognized food
safety certification. Although food safety has historically been viewed as a cost of
doing business, companies with trusted delivery capabilities will increasingly be
able to leverage this advantage to create growth opportunities. In future years,
these endorsements may become a requirement to serve the biggest customers.
* Look for growth opportunities abroad. Organizations that pursue growth beyond U.S.
borders may well end up in a better competitive position than those that do not,
with emerging economies presenting great opportunities.