The food and beverage industry is at a critical crossroads. Society is undergoing a paradigm shift in the way we think about food. We can no longer define health based on the nutrients we can get from food and now must also focus on the quality of ingredients found in our food. We are looking at food in a more holistic way, contemplating its impact on human welfare as well as the broader effects food production has on society as a whole and on the environment. Consumers and all other stakeholders can no longer be considered distinct groups, in part because everyone must eat and drink. Instead, they now constitute a large and increasingly influential group of “stakebrokers,” each of which can impact a company’s public perception and performance. The digital age has given every individual a voice in the dialogue surrounding food and nutrition.
Today our New York office hosted its inaugural APCO Forum salon event, “What’s Next in Food,” which coincided with World Food Day, a commemorative day created by the UN more than 30 years ago to generate awareness of and inspire political action around food instability and global hunger.
Through “What’s Next in Food,” APCO brought together thought leaders and industry players from a wide range of backgrounds to discuss questions about what the future of food looks like for the food and beverage industry and how the issues on which World Food Day focuses are being incorporated into business planning. The panelists at the event were Nancy Schnell, former deputy general counsel of Unilever; Dr. Karen Hulebak, former chair and vice-chair, Codex Alimentarius Commission; and Kaumil Gajrawala, consumer analyst, UBS Investment Bank. Melissa Musiker, APCO’s vice president of food and nutrition policy, acted as the moderator.
The panelists were in unanimous agreement that the prominent challenge for the food and beverage industry in the United States is presented by its operating environment. In the United States, food and beverage companies are criticized by a range of activists and influencers for their policies and practices surrounding issues like obesity and food safety. This perception contrasts starkly with how food companies envision themselves. Food and beverage companies see themselves as nurturers of their consumers. After all, they provide nourishment for billions of people daily and seek to build emotional attachment to their brands and products amongst those who have been lifelong customers. Their efforts to create healthier, more sustainable products and to anticipate the unarticulated needs of their consumers have not fully mitigated the demonization of the industry.
To ensure continued success in this difficult operating environment, food companies must find innovative approaches to R&D and marketing. Faced with public pressure and intense competition, large food and beverage companies are being challenged to advance their R&D initiatives at increasingly rapid rates to keep up with evolving consumer demands. Large food companies can no longer ensure customer loyalty simply by continuing to produce the same time-tested goods at affordable prices; they must be continuously developing ways to make more sustainable, healthier and exciting products. Gajrawala underscored the importance of large food companies succeeding in this R&D race, stating “the big guys are the only ones who can produce food at scale and minimize costs. There are seven billion people on this planet who have to eat.”
If the food and beverage industry must find new ways to communicate healthy behaviors to consumers, social marketing strategies may hold the answer. Dr. Hulebak highlighted the impact subtle messages received through what we watch on TV or in movies can have on changing the public’s behavior and introduced the idea of “concept placement.” This strategy works similarly to product placement, except rather than promote products, background images depicting healthy behaviors such as a family eating dinner together or playing in the park together would subtly demonstrate the value of these activities to consumers and begin to shift behavioral norms.
It is increasingly evident that no government organization, company or group of any kind will be able to succeed in making substantial improvements in issues related to food, particularly food safety and obesity, by working unilaterally. Rather, regulatory agency and industry players must work together to create collaborative, creative approaches to addressing the sector’s biggest challenges. With particular regard to food safety, an area in which there is widespread agreement that government should take a leadership role, input from industry leaders, who bring different insights and different pools of information to the table, is critical.
Another key takeaway from the discussion was the need for companies to shift their messaging from a focus on the “bad” components of food that should be avoided to the “good” components - nutrients that offer important health benefits to consumers. By concentrating on selling the “goods” rather than limiting the “bads,” companies can change the food dialogue from a negative blame game to a positive discussion of the important role food plays in our lives.
Schnell emphasized the history of successful experiences that marketing efforts focused on improving public health through creative promotion of alternative behavioral norms have had in other sectors. For example the personal care industry has had significant success in improving personal hygiene and reducing incidence of communicable diseases by marketing tooth brushing or hand washing. Through innovative R&D and marketing initiatives around behavioral norms of eating and physical activity, companies can prove themselves to be socially responsible and positive forces in their communities and society as a whole. This is especially important given consumers constant demands on companies’ to prove their shared value, or the beneficial roles they play in society.
At the end of the day, the story that food and beverage companies must tell their stakebrokers is that they are focused on delivering to consumers products that they need and value while at the same time recognizing and proactively addressing broader social challenges such as hunger, food insecurity or obesity. The companies that will be most successful in shaping a profitable business will demonstrate their commitment to working with consumers, regulators and thought leaders to meet the food challenges that we face today and in the future.