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Q&A with David Jago: How the Food Industry is Striving to Win Consumer Trust

Posted By The Marketing Institute, 27 June 2017

David Jago, Mintel, how the food industry is striving to win consumer trust

At our recent Breakfast Briefing with MINTELDavid Jago, world-class food and drink analyst, explored the issue of consumer trust in the food industry.

It is not just politics and big business which people have trust issues with: the level of consumer trust in the food industry has been shaken, according to new Mintel data. David's presentation explored the role of trust in the relationship between consumers and food and drink, and what brands can do to win it. Here are the presentation slides and our follow-up Q&A with David.

 

Click here to view presentation

 

The Marketing Institute: You mentioned Financial Transparency as a means of building consumer trust; How can brands do this effectively?

David Jago: In food and drink markets real financial transparency is still very rare! One notable example is the US wine company Alit, which lists the costs of raw materials, staff, packaging etc., as well as the declared gross profit per bottle. Alit sells direct (online) to consumers, “cutting out the middle man”, so part of the strategy is simply to demonstrate that wine pricing is not arbitrary. But it has discovered that this degree of financial transparency really appeals to Millennial consumers as part of the “story” behind the brand, as well as helping to justify the relatively premium prices it charges. It might not work for major players with multinational sourcing, production and marketing, but financial transparency is an element of the marketing mix that could work for smaller, independent producers.

 

MII: 40% of consumers value family and friends’ opinions over the expert. How is this impacting the experts and what should they be doing to tackle this?

D.J: When it comes to food and drink products, in particular, the “risk” of trying something new based on a friend’s opinion is relatively low – we’re generally talking about relatively low cost items, so that encourages a degree of experimentation. A potentially more dangerous area is that of healthy-eating and nutrition, where the views of qualified experts may be lost in the noise of bloggers and vloggers. Big brands and major retailers need to better position themselves as experts, working collectively and with consumers via social media, to ensure that the right information gets the high profile it needs, and to encouraging positive dialogue.

 

MII: How do you think Brexit will impact consumer trust in the food industry?

D.J: The immediate result of Brexit is uncertainty, whether we’re talking about consumers or industry, in the UK or Ireland, or indeed anywhere else. Younger consumers in any country are significantly more likely to trust EU regulations for food and drink safety standards, and fear rising food prices and poorer quality. Generally speaking, though, consumers have greater trust in food and drink produced in their own country, and we’re likely to see a lot more of that in the future. Companies will need to create more transparency around sourcing, making a virtue of sourcing from within their own country to support local or national interests, even though the key driver may in fact be cost.

 

MII: Ultra-Provenance is heavily influencing consumer choice and certainly trust in brands. But with consumer cynicism surrounding big brands, do you think consumers could become more cynical and see through this trend?

D.J: Consumers today have more information at their fingertips than ever before, while they’re in store or shopping online, and while they’re consuming the product, and social media means that “fake” stories will quickly be exposed. Ultra-provenance can only work when it is real and honest, and may be challenging for big brands, but anything that helps to “tell the story” can reassure consumers – bear in mind that ultra-provenance is often only an indicator of premium quality, and there are many other ways to communicate that.

 

MII: How has the rise in veganism and plant-based proteins affected the food industry?

D.J: As with any trend, there are winners and losers! We have seen a huge amount of product development in vegan and plant-based foods, often from small, entrepreneurial players who have grown fast based on Millennials’ adoption of the trend. We have also seen meat and dairy companies going vegan, notably in Germany. Traditional meat supplier Rügenwalder recognised an opportunity rather than a threat and has had success with a wide range of meat-free products; dairy companies Molkerei Söbbeke and Emmi have launched plant-based alternatives to yogurt. And of course Danone acquired plant-based foods specialist Whitewave.

It’s important to look at the number of consumers who are cutting back on meat or dairy consumption (a third or more of adults in some European markets), rather than the number of (dedicated) vegans and vegetarians. And consider the high impact among Millennials and the fact that their consumption behaviours may not change as they age, and may be reflected equally as strongly in their children. Then we’re talking about a long term shift in consumer behaviour, not just a fad.

 

MII: You mentioned accepting faults as an effective way to regain consumer trust, do you have any advice on how to go about admitting wrongs that may seem unforgivable?

D.J: Admit mistakes quickly, communicate openly, and create a positive story! An excellent example is Marks & Spencer, who in March this year apologised after a dairy supplier was found to be breaking animal welfare laws. Rather than dump the supplier M&S pledged to work with them “to help rectify issues and make them a more robust business.”

Tags:  consumer trust  food industry 

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