Published on June 13, 2016
1. Animal Agriculture Alliance Stakeholders Summit David Fikes Food Marketing Institute VP, Communications & Consumer/Community Affairs Supply Channel Insights: How Can Animal Agriculture Provide Solutions to Retail Challenges?
2. FMI PROUDLY ADVOCATES ON BEHALF OF THE FOOD RETAIL INDUSTRY. FMI conducts programs in public affairs, food safety, research, education and industry relations on behalf of its more than 1,225 food retail and wholesale member companies in the U.S. and around the world. FMI membership covers the spectrum of diverse venues where food is sold. More than 40,000 retail food stores Regional firms $770 billion combined annual sales volume Nearly 25,000 pharmacies 260 companies outside the US in more than 70 countries Multi-store chains Independent operations 330 associate members that include retail supplier partners
3. 3 Food Retail’s Unique Role in the Food Chain Processor Farmer Distributor Retailer Consumer
4. 4 The Retail Food Industry Data from FMI’s U.S. Grocery Shopper Trends 2015 and The Food Retail Industry Speaks 2015 Consumers visit supermarkets 1.5 times each week Average Supermarket carries more than 42,000 items Average Profit Margin of 1-2%
5. 5 Shifting Consumer Food Value Equation Deloitte/FMI/GMA Study Source: Deloitte Food Value Equation Survey 2015, Deloitte Analysis
6. 6 Shifting Consumer Food Value Equation Deloitte/FMI/GMA Study Source: Deloitte Food Value Equation Survey 2015, Deloitte Analysis Half of consumers surveyed indicated they weigh evolving drivers (health & wellness, safety, social impact, experience) more heavily than traditional ones (price, taste, convenience).
7. 7 ©2015TheHartmanGroup,Inc.FMIU.S.GroceryShopperTrends,2015 63% 47% 47% 44% 42% 38% 37% 37% 34% 34% 31% 28% Provides QUALITY Products Avoids INHUMANE Treatment of ANIMALS Provides Safe WORKING CONDITITION for Employees Supports US Economy Sells Products/Services at LOW PRICES Provides Products that directly BENEFIT ME Provides Good WAGES/Benefits to its Workers Tries to Reduce WASTE & POLLUTION Truly Cares about COMMUNITIES where it does Business Supports LOCAL Economy Tries to Reduce ENVIRONMENTAL IMPACT of Production Avoids Unnecessary PACKAGING Total Shoppers want to support companies that prioritize treatment of both workers and animals, even above low prices Source: The Hartman Group, Transparency 2015. “When deciding which product/service to purchase, how important is it that THE COMPANY that produces the product/service?” (5 pt. scale: Top Box – Very Important). n=1779. Company attributes that are ‘VERY IMPORTANT’ when considering which product to purchase Shoppers are increasingly concerned about animal welfare. Humane treatment of animals and Worker Safety tied for the second most important attribute that shoppers expect from the companies providing the products they purchase
8. 8 ©2015TheHartmanGroup,Inc.FMIU.S.GroceryShopperTrends,2015 2015: ANIMAL WELFARE Shoppers want to know about animals used in the products they buy Animal Welfare is more than just humane treatment of animals. • Some shoppers focus on the personal impact to themselves, with the possible health risks of hormones, antibiotics, etc. • Others focus on the animals and worry about the quality of life while they are being raised. • And yet, there remain many shoppers who want to be assured that no animals were used at all. 68% 65% 65% 63% 51% 45% 33% Knowing that other animals were not harmed in the capture/raising (i.e. dolphin-… Knowing the animals were raised in as natural environment as possible (i.e.… Knowing that animals were not used for product safety testing Knowing the animals were not given hormones or antibiotics Knowing the company who produced the product supported animal welfare… Knowing no animals at all were used in the product Knowing the animals were fed only organic food Total Specific animal welfare practices that effect product purchase, among shoppers concerned about animal welfare Source: The Hartman Group, Transparency 2015. “Which of the following aspects of animal welfare practices would make you more likely to buy a product? (select all that apply)”. Shoppers concerned with animal welfare, n=1,280.
9. 9 ©2015TheHartmanGroup,Inc.FMIU.S.GroceryShopperTrends,2015 2015: ANIMAL WELFARE Shoppers want food retailers to prioritize animal welfare, even above environmentally sustainable practices 72% 55% 45% 42% 29% 25% 25% 21% 19% 17% 16% 15% 15% 13% 13% 12% 10% 6% 6% Good Value Convenience Hygiene & Cleanliness Large Selection of Products Supporting Local Economy Supporting US Economy Employment Practices Animal Welfare Local Community Involvement Fair Trade Store Sensory Appeal Natural Agricultural… Maintain Natural Resources Environmental Impact of… Minimal/Ecofriendly… Air and Water Pollution Wider Community… Small Company Adaptability Large Company Impact Importance of Grocery store attributes Source: The Hartman Group, Transparency 2015. “Which of the following attributes of a GROCERY STORE make it more likely that you’ll shop there? (select all that apply)” Shoppers n=1,701. Personal Benefit Zone: product ingredients, health, wellness, safety -- anything that directly affects someone personally Social Zone: social responsibility, humane treatment, community involvement and fairness Economic Zone: financial stability and welfare Environmental Zone: impact on environment, stewardship of natural resources and minimizing waste
10. 10 ©2015TheHartmanGroup,Inc.FMIU.S.GroceryShopperTrends,2015 Consumer wellness allies Source: FMI U.S. Grocery Shopper Trends, 2015. “The food I eat at home is much healthier than the food I eat away from home”, Shoppers n=1,186. “When it comes to helping you stay healthy, which of these groups tend to be on your side, and which tend to be working against you?”, Shoppers n=1,164. When it comes to helping you stay healthy, which of these groups tend to be on your side and which tend to be working against you? 4% 6% 3% 4% 6% 6% 11% 11% 26% 13% 34% 26% 16% 41% 33% 57% 79% 72% 70% 61% 52% 45% 40% 32% 30% 30% 19% 17% 16% 13% 7% 6% Working against me Working for me My family Doctors My friends Farmers Fitness/health clubs My ''primary'' food store Drug stores Local restaurants Health insurance companies Food stores in general Government institutions The news media Celebrity chefs Food manufacturers The entertainment industry Fast food restaurants
11. 11 Recent Animal Welfare Actions on the Retailer Front • Concerted NGO effort urging retailers to sell only cage-free eggs. – pressures exerted (HSUS, Mercy for Animals, Humane League and others) – actions taken – unresolved concerns: WIC acceptability
12. 12 Background to “What can you do.” recommendations Remember, in today’s world, • Most are 2-3 generations removed from “farm/ranch awareness.” • Ignorance (lack of awareness) does not equal apathy or silence. • Consumers strongly feel that the dollars they spend (in a store/ on a product) entitles them to answers and information.
13. 13 What Can You Do? • Recognize the hot button animal welfare items for consumers: • Pain management during procedures • Housing conditions • Means of euthanasia/harvesting • Feed additives, antibiotics, animal meds • Borrow 10 urban middle schoolers and conduct the operational audit from hell. • Disrupt your business before others disrupt it for you.
14. 14 What Can You Do? • Remember you are a trusted authority, so deepen your social media presence - where most get their values information. • Share your experience and listen to the reasonable responses. • Recognize the varieties of ignorance; the naïve can be educated, the zealous are itching for a fight, engage carefully.
15. 15 Thank you; for your work – everyday, and for your time and attention – today. I look forward to your questions.