Food groups are hostage to consumer fads
However, the dip in milk output in New Mexico, down 7.4% in the year to end February 2007, may begin to exercise minds in Glanbia where it has a major joint venture that processes 700,000 gallons of milk a day.
Meanwhile, NCB which was gloomy enough about Kerry just a few months back, has given the major food ingredients player a buy recommendation.
The good news is that in Britain Finsbury Foods, an own label group that makes cakes and bread products for the likes of Sainsbury and Tesco, reported good news for that segment of the market.
In a recent statement it noted that while British consumers are becoming more health conscious, they still like to indulge now and again and as a result sales are looking pretty solid.
That is good news for Greencore, which is also very active in that end of the market and the positive indicators from Finsbury will assure the group that it is not going to be derailed by new eating habits anytime soon.
But perhaps the most interesting line in the remarks from the British group was that however health conscious British consumers are becoming they still like the occasional treat.
That comment could have an air of desperation about it bearing in mind the thousands of books and millions of websites that deal with diet and weight loss.
So the positive soundings from Finsbury, while welcome, are no guarantee of future trends.
For most companies, who are hostage to consumer taste, unless totally locked into the health and wellness end of the market, they cannot be impervious to the growing shift towards healthier eating.
Long term that means a continuing shift away from fatty foods and a continuing reduction in carbohydrate intake.
Just a few years ago the Atkins craze raised very serious concerns about the possibility of a huge change in eating habits as people became obsessed with weight issues.The Atkins formula put a huge emphasis on eating protein and vegetables at the expense of carbohydrates.
Atkins threatened to become a tipping point, to quote Malcolm Gladwell’s book of that title, and firms like IAWS who produce a massive amount of white flour based breads and cakes were suddenly starting to look over their shoulders, as questions were asked about what impact Atkins would have on global eating patterns.
As it so happened the diet fad faded, but the point is well made.
Food trends have certainly moved towards healthier eating patterns and those producing products that are not regarded as being in the healthy category stand exposed to the threat that consumers may reject their offerings somewhere down the line.
Gladwell’s basic point is that attitudes can change in a flash.
He compares people’s shift in behaviour to being akin to an epidemic.
Suddenly an outbreak of measles will infest an entire school and disappear as quickly as it started.
Food fads or changes in how people behave show strongly similar characteristics he contends.
Gladwell’s book however raised the spectre of the unexpected and says what is true of epidemics can also be true of how people’s attitudes suddenly change.
The bottom line is that in a market driven by consumer sentiment some ideas take off and some don’t and even those that do can have a short shelf-life.
The consumer is fickle and unpredictable and for that reason the Irish food sector is always living on the edge.
