How well do you know your market?

A recent trip to Cape Town saw me attending two events with vastly different outlooks.The first was a panel discussion on food security held as part of a conference organised by Food Hospitality World (FHW).

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Talk centred around the nutritional value of food versus quantity in addressing malnutrition. The second was a conference held by the Red Meat Abattoir Association. This was a gathering of profit-driven members of the red meat value chain.

At the latter, research presented by the Bureau for Food and Agricultural Policy’s (BFAP) Hester Vermeulen, confirmed the validity of panelists’ concerns at the first conference – consumers do not pay enough attention to the nutritional value of food. According to BFAP research, the big spenders on meat, the middle and higher income consumers, are primarily concerned with affordability. Appearance and taste are also high on their priority list.

Organisations lobbying for more environmentally and animal-friendly farming claim that animal rights, traceability, hormone- and GMO-free food are a consumer’s primary concerns. But in South Africa, these factors are at the bottom of the list. Of course, very few consumers will readily confess that these issues are not that important to them; they want to appear concerned. But when it comes to buying decisions, affordability overrides all.

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And, while the red meat industry is holding discussions on issues such as the meat classification system, it seems that consumers could not care less. In fact, few even understand or know about the classification system. This ignorance illustrates how easy it is for producers to be out of touch with consumers.

Too often, producers leave it to retailers to stay up-to-date on the latest consumer preferences. And in the process, they lower their competitive advantage. In business, finding a market for a product or service is the most important step on the way to profit. A producer can have the most innovative, exciting product in the world, but if he or she does not have enough people who want to buy it – and that means getting that product to its target market – the producer is doomed to fail. Understanding the market is of utmost importance, as is keeping watch for future trends.

Agriculture is a major user of natural resources – that’s a fact. And it also contributes to CO2 emissions. As the demand for these resources rises alongside a growing population, increasing production efficiency makes sense. Apart from decreasing agriculture’s carbon footprint, it also makes economic sense when taking into account the rising costs of electricity, fertiliser, and other inputs.

Producers can scoff all they like at the often emotional rhetoric of ‘greenies’, but the underlying sentiment – sustainable use of resources – is going to become more important in the future.