Mulling over megatrends
Euromonitor report outlines overarching consumer trends.
Want to know what’s coming around the corner? Take the time to digest these long-term shifts affecting consumers, retailers and manufacturers.
In its most recent report, “Megatrend Analysis: Putting the Consumer at the Heart of Business,” Euromonitor International doesn’t mince words regarding its topic.“Successfully identifying, analyzing and acting on megatrends is essential for success in consumer markets. The world is changing faster than ever, and it is becoming increasingly difficult to keep up with competitors as technology spurs both the rate of and access to innovation.”
Can’t really argue with that premise. But to be clear, what really is a “megatrend?” Obviously, in hindsight, the internet and smart phones certainly contributed to such megatrends such as tweeting, social media, viral popularity, even fake news.
According to Euromonitor, “A megatrend is a long-term shift in behavior or attitude with global impact across multiple industries.” So what can we expect down the road that can help candy manufacturers and retailers cope with these speed-demon changes affecting our lives?
In browsing through the report, the authors pointed out specific drivers for the megatrends we can expect: shifting economic power, i.e. from developed countries to emerging markets; technology, as in enhancing consumer choice and power; population change as evidenced by China’s middle class; environmental shifts and pressures (Harvey and Irma come to mind); and changing values, such as the growth of populism.
Given these drivers, Euromonitor pinpointed eight megatrends: Middle Class Retreat; Experience More; Shifting Market Frontiers; Premiumization; Ethical Living; Shopping Reinvented; Healthy Living; and Connected Consumers.
Although I believe all these apply to the confectionery industry, I’m just going to touch on a few that found me nodding my head in agreement.
In the Middle Class Retreat, the authors point to the growth of discount stores at the expense of hypermarkets, suggesting that the middle class consumer has embraced the idea of “Gloried Frugality.” The notion of a good deal combined with a good global citizen (less waste) has struck a chord with the middle class.
“To win these frugal consumers, businesses must design for longevity, emphasizing good quality, re-use and ease of maintenance and look for “revolutionary” takes on value,” the authors say.
I can only look at myself and say, yeah, I’m always hunting for that good deal. Even though I’ve strayed occasionally from my local fruit and produce store (it’s actually much more than that) for matters of convenience or specialty items, I keep coming back for the basics to this value-minded retailer. One-stop shopping versus low-cost shopping.
Then there’s Shifting Market Frontiers. As the authors explain, “As some areas of the globe become over-farmed, over-populated, or otherwise reach their maximum potential, others gain prominence for their unexploited potential.” They cite China as a perfect example, where opportunity lies in midsized urban centers, away from the megalopolises that already have witnessed market saturation and tooth-and-nail competition.
In this instance, Euromonitor’s case history focuses on Nestle, and its acquisition of Hsu-Fu-chi, a Hong Kong-based confectionery manufacturer. The move was designed to take advantage of Hsu-Fu-Chi’s distribution and reach consumers in what Euromonitor called “lower-tier” cities. In December 2015, Nestlé re-introduced Kit Kat, targeting consumers in these urban areas. The move helped Nestlé achieve a 6.3 percent share of China’s confectionery market in 2016.
Finally, I’d like to tackle one more trend: premiumization. As the Euromonitor report says, “many will see this as nothing new.” However, in this case, the motivation is slightly different.
As the authors explain, “At its core, premiumization is about priorities. With more products available at more price points than ever before, consumers can spend more on the things that matter to them, while cutting back — often significantly — on those that do not.”
So candy makers intent on delivering a premium product must make their offering special and customized to make it the shopper’s priority. It’s all about consumers making a “calculated” choice.
I believe our readers will find these and the other megatrends fascinating reading. But now comes the hard part: capitalizing on them in a strategic and meaningful way for your company.
