Change is the most critical factor facing U.S. agriculture today. The changes we will experience in the next five years will be greater than the changes we witnessed during the past 25 years. The key catalysts driving these changes include the continuing information explosion driven primarily by computers, biotechnology, the environment, the economy, government policy, globalization, ethics and consumer preferences.
While all of these catalysts play a critical role in shaping agriculture's future, the most challenging will be consumer preferences. Production agriculture must strive to understand what drives consumers to purchase certain food products. Simply stated, to know what the consumer will buy, we must be able to "see" through their eyes. Those in the food chain who don't "see" these consumer changes will not be successful.
Respond to trends
Tracking and accessing consumer trends is key to delivering new food products that meet consumer needs. Examples of changing demographics include:
- A dramatic increase of women in the workforce - in 2000, women received half of all college degrees awarded in business and management, and owned more than one-third of all U.S. businesses.
- Changes in family composition.
- Baby boomers moving into an aging generation - 81 million people with 40 percent of U.S. disposable income.
- Growth of the ethnic population.
Growth in the ethnic population has triggered significant change in consumer preferences. Ethnic foods are no longer changed to fit American tastes. Consumers demand and expect authentic ethnic foods. Many foods now carry bilingual labeling and that trend will continue to grow. In addition, growth in the aging population is driving major changes in food products and packaging. In the aging process, people experience a decline in their senses of taste and smell, grip strength, and sight, which leads to a special market to address these issues for the aging and disabled.
Increased consumer concerns about health, nutrition and for convenient items that taste good will drive changes in production agriculture. However, as we have learned in the past, consumers will only buy products with health and nutrition benefits if they taste good, too.
Time, rather than money, is the currency of today's consumers. To address the issues of more work time, more family time, and fitting more activities into lives that are already constantly on the go, the U.S. has become a culture of convenience. Consumers don't have time to cook meals. Changing meal patterns will continue with even more grazing, snacking and eating away from the home. America's newest dining rooms are desktops and dashboards. These factors create demand for portable, simple, but nutritious and tasty foods.
Consumers look for variety, value, freshness, and convenience. They want simplified meal planning that removes the guesswork. Consumers want heat-and-eat meals, and they want meals that please their families. Home-meal replacements and case-ready meat and food products in consumer serving portions are critical for success with today's consumer. All of these needs must be met, while continuously satisfying consumers and building and maintaining consumer trust.
In order to meet consumer needs, communication within the food chain must be improved. This is especially true for the dairy industry.
The majority of dairy producers recognize their role in producing high-quality milk. But those quality and freshness bars will continue to rise. It is important for the members of the food value chain - producers, processors, retailers - to pay attention to consumer trends and work together so that they can anticipate the direction they must move to ensure success in a consumer-driven market. The industry must focus more on strategic marketing, new products, and risk-management tools.
Dairy producers must become more interdependent with their peers and within the dairy food chain to remain independent. Value-added alliances require that the parties involved must be more efficient than their competition, and that they must establish brand identity and brand loyalty.
The future success of the dairy industry lies with meeting the needs of consumers. And, those consumers cast their votes everyday through their purchases. These purchases determine which dairy food products will be the winners.
Monte Hemenover is a dairy industry consultant and president of Avenues For Change, St. Louis, Mo.