• Nick

Horsemeat lasagne – it’s really not “a labelling issue”

Many Brits don’t know what they are eating. And now it turns out that the supermarkets don’t know what they are selling. Yikes.

To relegate this to a “labelling issue” seems to be missing the point. The food chain, the system, is broken. Because the end players can’t see it all. So they don’t know what they’re selling. And we don’t know what we’re eating.

We’re all going to have to get a lot more interested in food – because the equation doesn’t stack up any more. Everyday low prices, incessant demand and supply constraints just don’t mix. Something has to give.

The horsemeat episode raises huge questions about the role and responsibility of the big food brands and retailers as well as how we consumers should behave. But for the moment here are three observations.

1 – “everyday low pricing” just isn’t sustainable any longer

something has to give on both the supply and the demand side. Any cursory examination of food inflation shows we’re all going to have to get used to paying a lot more for food in the future (and consequently a lot less on other things). This will require a big shift especially on the consumption side – we’ll be much more likely to want to exert a bit more control over what we eat and how it gets to our plate. Brands that engage with us and help us to become home producers  – rather than treat us as “consumers” at the very end of the supply chain – will win. Watch this space.

2 – it’s not just food

the pressures that have led to horseburgers apply across all those industries that are critical to the stuff of life. Energy, finance, health, food. In each case there’s insatiable demand, an expectation of low prices, a growing demand for more sustainable and ethical production and the need to maintain supply at all costs. Yet bizarrely – and this needs addressing – the brands that provide all these services are the ones we consumers care least about. There’s a paradox here – what the energy companies do, what the banks do, what the pharmas do (and what the farmers do), is so important to the way we live – yet the way in which the brands engage us is through price. Why do we care so little about these brands when we should care so much about what they do?

There’s a huge opportunity here again – for the leading brands to shift fundamentally the way they engage us consumers, to treat us as intelligent folks who understand that in the future we’ll have to consume differently – not just treat us as price switchers.

3 – this is a once in a generation opportunity for the brand leaders to act as challengers

The system needs changing. Unfettered demand, rock bottom pricing and continued supply constraints will mean inexorable change. Whether we’re talking about food, energy, finance or health. One way or another it’s going to change.  In the same way that M&S seized the intiative with Plan A, this is a rare opportunity for the incumbent brands to challenge and change the prevailing rules of the system. A rare chance to be a challenger brand – to shift the dynamics of the market.

In the case of food this means that one of the leading brands should do at the very least the following:

– get rid of any everyday low price products that cause corner cutting in the food chain. Wafer thin or non-existent supplier margins are a (sorry) recipe for disaster.

– introduce voluntarily a transparent sourcing and tracing regime for processed food – and to use it as a kitemark on all processed product, (put a bit of meaning into “selected by Tesco”)

– actively help consumers change their consumption habits, help us learn how to prepare and cook food from scratch. The price of food is going to continue to rise; after this episode we’re not going to want to compromise quality; we’re going to have to learn a bit more self sufficiency. This will involve a heap more engagement.

The horse scandal isn’t about labelling. It isn’t about a couple of rogue criminal elements. It is about a system that’s fundamentally broken.

This is the moment for category defining leadership. Come on retailers – be bold, get creative, change the rules.

#MampS #foodchain #horsemeat #newbusinessmodels #nickkeppelpalmer #PlanA

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