Year of Change
Anybody who likes things “neat and tidy” is going to cringe at this year’s state-of-the-industry report. That’s because snack and bakery food companies are messin’ with the definition of categories. Of course, sometimes getting messy can be a good thing, especially when it comes to new products.
A couple of years ago, cookie, candy and snack bar producers rolled out dozens of products that blurred the categories. This year, it’s the salted snack and cracker guys. Frito-Lay, for instance, has come out with cracker versions of its Cheetos and other wholesome baked snacks.
Not to be outdone, cracker producers like Kellogg have come out with items like Keebler Town House Flipsides, which is actually an innovative product that has cracker on one side and pretzel on the other.
As companies target the broader $90 billion macro-snack category with products of all shapes and sizes, defining what a cookie or cracker is today is not as neat and tidy as it was in the days of old.
To survive in today’s fast-paced, innovative marketplace, bakers and snack producers have to embrace change and adapt to shifting consumer and new product trends even as they struggle with skyrocketing ingredient and fuel prices that are dramatically impacting our industry. Those who don’t “Vote for Change,” which is the theme of this year’s report, simply risk becoming irrelevant or driven out of business because their products have become outdated, in a sense have become stale, or they can’t afford to produce them at yesterday’s prices.
At the same time, industry groups must continually redefine their goals and objectives to remain relevant to their members. The American Bakers Association, for instance, raised its public profile this spring with its “Band of Bakers” march on Washington, D.C.
Initially, some people poo-pooed the idea. In the end, however, raising a stink over flour prices heightened consumer and customer awareness about the ingredient costs and that has helped make it easier for bakers and snack producers to hike prices over the last few months.
In June, the ABA met again in the national capital where it was holding its 2008 policy conference to again bang the drum on its critical issues, specifically high ingredient prices. Bakers know that consistent pressure is the key to success.
Later this year, notes Robb MacKie, ABA’s president and CEO, the association staff and its executive committee will hold its second strategic planning process to make sure it is addressing those issues that impact the bottom line of bakers.
“We have to get back to our core as being the advocate for the industry and look at resources we have available,” he says. “It’s all about getting things done effectively in Washington.”
That means becoming more visible on the Hill, especially on such “bread and butter” issues as commodities, says Lee Sanders, ABA’s senior vice president government relations & public affairs. It also means taking the industry’s message to the media and, consequently, to consumers to explain why food prices are rising and why food for fuel is a really bad idea. In the past quarter, ABA’s messages have been cited in more than 600 publications globally. The debate has already begun to turn in favor of the industry.
To be effective in today’s political climate, ABA even has had to change how it approaches legislative issues and reach out to both members of both parties for support.
“The baking industry is not a partisan industry,” notes Kenneth “Chip” Klosterman, ABA chairman and president of Cincinnati-based Klosterman Baking Co. “Our products are as American as apple pie, and the government needs wholesome, healthy, low-cost food. That’s the case on either side of the aisle - whether you’re a Democrat or Republican.”
During the past few years, the industry has had to deal with the carb craze, the obesity crisis and spiraling operating costs, but it also has been able to take advantage of the good news about whole grains and wholesome snacks.
Yes, it’s all about change. It’s all about adapting. So forget being neat and tidy. It’s time to mess things up in a good way.