The Year Ahead

sparkling_2014_lightsAll members of the food industry are engaged in tough pursuits. What’s more, it’s never been easier for customers to walk away from established business relationships.

This usually has little to do with the products by which suppliers define themselves. Even after development and launch, competitive replication of equal or greater quality and value takes competitive advantage through product differentiation off the table very quickly.

New business behaviors and objectives—not necessarily products—are and will continue to grab headlines and generate buzz in the year(s) to come.

While everyone is speculating about the Sysco / US Foods merger, making predictions and expressing opinions on where they see things shaking out in the end, industry issues in total are more profound than this announcement.

We recommend revising how to think about growth, building sharper big-picture perspectives and new knowledge-muscle across your organization. We caution against taking one headline out of context from the rest or confining implications to one or two areas of your organization.

Consider just a few transformative behaviors and what they could mean for your business in 2014/2015:

  • Customers, trading partners and competition will get busier executing new alliances as power shifts in an accelerated and sometimes erratic rate. Many will seek to accumulate brand and product clout through deal making.
  • Included is the new math of “addition by subtraction”: shedding people, brands and businesses to concentrate value, compete more effectively and deliver financial results more assuredly.
  • Decisions will be persuaded by sophisticated use of data and technology to anticipate strategic moves that conform to the industry’s future state.
  • Supply chain streamlining and cost reduction will continue. Category management may slow down a bit in foodservice but will be a relevant aspect of M&A integration and value generation.
  • Growing emphasis and resources on private label will pose challenges for branded suppliers. For those packing both, private label must be balanced with a powerful manufacturer brand plan.
  • Don’t underestimate operator (not just consumer) interest in e-commerce sites such as Amazon Pantry to gain access to de-listed distributor products and to better manage cash flow.
  • Channel blurring will attract attention to various  supplier pricing and programs.  Trade spending with accounts in LA compared to those in Boston will come under scrutiny , as will pricing and programs between overlapping supply sources servicing new segments.
  • Attracting and keeping business in retail or foodservice will require insulation against new entrants with insights that teach customers something new about their business and shape the way they make supplier choices.

Have you identified the top issues that will have profound impact on your business this year? What new thinking will enable your organization to address them? Who is objectively helping remove blinders to see what you may be missing in today’s era of turbulence?


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