Organic Food Movement Threatens Big Brands

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The food industry is inexorably tied to the marketing industry. Whether or not they believe it, consumers are influenced by advertisements and the ways in which companies portray their products. Food is likely one of the most demonstrable examples of the power of suggestion. 

Especially as health foods gain traction, a company can highlight or hide various aspects of its product through packaging.

For small businesses, startup food providers and farmers, these techniques can go a long way in promoting success. Likewise, the wrong methods might undermine a company – even one with an established identity and large market.

Health foods challenge brands' dominance
As Americans move toward locally-grown, organic and generally healthier foods, big-name brands are feeling left out. According to the Washington Post, major brands Kellogg, Kraft and ConAgra – which owns Chef Boyardee and Swiss Miss – have cut their growth forecastsand/or registered disappointing profits for 2014. There are many factors at play, including global economics and resource availability. But as the Washington Post pointed out, those are yearly obstacles. What is more troubling for these companies is the changing landscape of consumer preferences.

It turns out that consumers know these brands – and many have decided they want to avoid the big names. As a result, ConAgra and Kraft announced some executive changes in an attempt to change course. It remains to be seen if these moves will have the desired effect.

While this is not what the food giants want to see, it does mean now is a good time to be a new, local and healthy food provider. Consumers are turning to other options these days, so small food industry players will get a chance to stake their claim in the market.

It's hip to be healthy
Not every big name is suffering. Some brands have figured out how to redefine themselves in order to align with the current consumer mindset. For example, frozen fruit sales have doubled since 2011 and topped a billion dollars in sales last year – eclipsing previous records, NPR reported. The reason? At least in some part, better marketing.

Dole made a conscious decision to market their frozen fruit as healthy ingredients in recipes for smoothies rather than as dessert toppings. The results have been encouraging.

"In 2014, they estimate that 60 percent of frozen fruit purchased went into smoothies," Sarah Nassauer, reporter for the food industry, told NPR. "And that number was 21 percent in 2006."

The smoothie trend is popular among health-conscious, on-the-go Americans. Dole capitalized on the shift and now even offers bags of frozen fruit combinations that are ready to go straight to the blender.

In organic stores like Whole Foods, NPR host Arun Rath noticed how frozen fruits are attractively packaged and presented.

"Some of these bags, the organic ones, look nice and wholesome … beautiful pictures all over them," Rath pointed out.

The move toward healthier options is something that startups and entrepreneurs should take to heart. Big name brands are at a disadvantage in this arena, and it's possible that consumers now distrust those corporations. For now, it is a blessing to be a small, local food provider.

Read more at Marlin Finance.


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