Another month and another FMCG trade show to visit – a great opportunity to understand the most recent trends and launches in the UK food and drink industry for 2017. It was also a chance to catch up with my network and understand what their thoughts are about the opportunities that lie ahead.
Two Commercial Directors that I met with, who are both less than six months into new roles, spoke strongly about the cultures of the businesses that they had joined and how their teams are all adapting to change and driving new opportunities.
Both spoke about how their businesses are growing and how they have also seen good growth within their retail multiple partners. However, this success seems to be driven by their NPD and thinking outside of the box. Typically these were not high volume lines but innovative products which provided incremental sales to their business and their retail partners, particularly during seasonal sales peaks.
One of them also spoke about how his business is backing Amazon Fresh this year and how in a short space of time they are already seeing a good return. With Amazon looking to roll this out further across the UK this is only going to grow, and as he remarked, when have Amazon ever made a wrong call? I would be interested to hear if any other food businesses are starting to see some success with Amazon.
The other Commercial Director talked about how his European owned business is on the acquisition trail as they seek to grow their UK market share - this was a refreshing comment, especially from a European business. They certainly don’t seem to be phased by Brexit and are taking the short term view and are sticking with their strategy to continue to grow their business.
As with all exhibitions, I also took some time out to listen to the seminars. There was one panel discussion in particular around the current picture of the UK food and drink industry, discussing trends, opportunities, and threats.
All discussed the continuing strong trend of healthier food and snack options that businesses are looking to produce. However, they also talked about how consumer buying habits are now being driven by marketing with a focus on storytelling, the background of the brand/product and the ingredients being used. They also believe consumers are moving back to more traditional, heritage and comfort brands, as we head towards 'uncertain times'.
This has also been reflected in the retail multiples, moving away from their 'price wars' of recent years and are now back to building their brand story and reminding us of their values. Retailers are therefore keen to stock and sell products with values and stories that align to their business.
Other areas highlighted included the continued improvement in frozen foods along with how the market is moving towards high end and lower discounted produce, resulting in the demise of middle market brands and products. Unless you are a heritage brand in the middle market you are going to struggle to succeed, according to the panel.
Finally, as I roamed the halls I was on the lookout for the future trends in the market. Walking around IFE two years ago it was evident that innovation was being driven in the healthy snacking market, with popcorn being seen as the healthy alternative. This is still evident, however, the snacking market now includes interesting products based on lentil and chip pea ingredients. Certainly, the one gaining the most attention from attendees was the Hippea brand, a snack which is based on puffed chip peas. Watch this space, but could this be the new Propercorn success of 2017 and beyond?