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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsFortune magazine Special Report: The War on Big Food
Major packaged-food companies lost $4 billion in market share alone last year, as shoppers swerved to fresh and organic alternatives. Can the supermarket giants win you back?
...
We look at our business and say, How can we remake ourselves? said Richard Smucker, CEO of his familys namesake jelly giant SJM 0.57% . A second execthis one at ConAgra CAG 0.50% , which owns 29 food brands that bring in $100 million in annual retail sales apiecebemoaned to Credit Suisse analyst Robert Moskow that big had become bad. A third conveyed what her industry feared would be the largest casualty of the publics mounting distrust of Big Foodthat shoppers would turn away from them for good. We understand that increasing numbers of consumers are seeking authentic, genuine food experiences, said Campbell Soup Co. CPB 0.83% CEO Denise Morrison, and we know that they are skeptical of the ability of large, long-established food companies to deliver them.
...
Their existence is being challenged, says Edward Jones analyst Jack Russo of the major packaged-food companies. In some ways its a strange turn of events. The idea of processingfrom ancient techniques of salting and curing to the modern arsenal of artificial preservativesarose to make sure the food we ate didnt make us sick. Today many fear that its the processed food itself thats making us unhealthy. Indeed, nearly half of the respondents in a recent Bernstein survey say they distrust the food system. Shoppers still value the convenience that food processing offers, says Moskow, but the pendulum has definitely shifted in their minds. They have more and more questions about why this bread lasts 25 days without going stale.
...
While consumers have long associated the stuff on the labels they cant pronounce with Big Foods productsthe endless strip of cans and boxes that primarily populate the center aisles of the grocery storethey 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 wont recognize the typical grocery store in five years. Ive been doing this for 37 years, he says, and this is the most dynamic, disruptive, and transformational time that Ive seen in my career.
...
We look at our business and say, How can we remake ourselves? said Richard Smucker, CEO of his familys namesake jelly giant SJM 0.57% . A second execthis one at ConAgra CAG 0.50% , which owns 29 food brands that bring in $100 million in annual retail sales apiecebemoaned to Credit Suisse analyst Robert Moskow that big had become bad. A third conveyed what her industry feared would be the largest casualty of the publics mounting distrust of Big Foodthat shoppers would turn away from them for good. We understand that increasing numbers of consumers are seeking authentic, genuine food experiences, said Campbell Soup Co. CPB 0.83% CEO Denise Morrison, and we know that they are skeptical of the ability of large, long-established food companies to deliver them.
...
Their existence is being challenged, says Edward Jones analyst Jack Russo of the major packaged-food companies. In some ways its a strange turn of events. The idea of processingfrom ancient techniques of salting and curing to the modern arsenal of artificial preservativesarose to make sure the food we ate didnt make us sick. Today many fear that its the processed food itself thats making us unhealthy. Indeed, nearly half of the respondents in a recent Bernstein survey say they distrust the food system. Shoppers still value the convenience that food processing offers, says Moskow, but the pendulum has definitely shifted in their minds. They have more and more questions about why this bread lasts 25 days without going stale.
...
While consumers have long associated the stuff on the labels they cant pronounce with Big Foods productsthe endless strip of cans and boxes that primarily populate the center aisles of the grocery storethey 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 wont recognize the typical grocery store in five years. Ive been doing this for 37 years, he says, and this is the most dynamic, disruptive, and transformational time that Ive seen in my career.
http://fortune.com/2015/05/21/the-war-on-big-food/?src=longreads
Every consumer transaction is ultimately about trust -- the buyer must trust the seller or there is no transaction. Big, long standing brands leverage all the trust accuumulated over the decades to get a premium over generics or other brands. The Fortune article is long and thorough but misses I thin a key change in the last 10 years -- transparency has replaced blind trust. If "Big" has become "bad" in the minds of consumers it is because they refuse transparency at every turn. Fighting 'truth in labeling' laws will not help the big brands at all.
Some of the old brands are starting to get it They are starting to give the customer what they are asking for and not just write trending words from focus groups on their packages. McDonalds recently rejected a GMO potato that was designed with them as the target customer -- less browning after slicing, longer shelf life, less carcinogens when fried. McDonalds likely just doesn't want to have THAT conversation with their customer who is asking for fresher, healthier and more local.
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