Consumer budgeting here to stay, expert tells conference
Consumer affluence has not rebounded to pre-crisis levels and a recessionary mindset is likely to persist for some time, delegates to the Agriculture & Horticulture Development Board’s Outlook Conference were told.
Richard Nicholls, from the Future Foundation, said that while the price of food had started to come back down in the last 12 months, “it will take many years to undo the several years of high food inflation. The cost of food is still going to be high and it’s going to impact upon consumer behaviour.”
He said food prices would still continue to be much higher than they were eight to 10 years ago: “The consumer’s focus on price and budgeting is here to stay.”
In global terms, and in good news for exporting companies, he said emerging markets were leading the way when it came to consumers increasing their spend. India and China were the high-growth markets, and the increased consumer wealth was reflected in the huge rise in eating out, with the Indian market up 70% on last year, while China also saw a jump of 62%. He added that, while there had been a slowdown in the growth of some emerging markets, they were still forecast to grow over the next five years.
Nicholls said those growth trends offered increasing opportunities for companies with premium products, as provenance and brands were proving very important to consumers in those markets. “There’s a strong belief that paying more does increase quality when it comes to meat,” he said.
He added that the growing global demand for technology within the food sector, and also in health monitoring and tracking were opportunities for the trade, and he highlighted the development of a smart knife that could monitor the nutritional content of food, as well as detecting things like bacteria, although he said such technology was not mainstream as yet.
When it came to the environment and ethical consumer behaviour, green products and paying a green premium “took a hit” when food prices started to climb, he told the audience. “Is it something that will make a comeback? Perhaps,” he concluded.
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