Health trends give companies food for thought
As the Western world becomes more aware of foods and their contribution to health the sector could face unprecedented challenges.
Those who meet and anticipate these challenges will be the ones who survive.
Health and nutrition have become major issues a point starkly illustrated by the case taken against McDonalds in the US over obesity.
While the challengers lost their case it was clear from the summing up that the judge felt if it had presented differently the plaintiffs might have ended up with another result.
From a distance cases like this may seem unreasonable. Surely people are responsible for what the eat nobody forces the food into them.
This is true but we may be forced to take a broader view. With the cost of healthcare soaring and direct links being established between what we eat and our physical health, all that could turn pretty dramatically if governments decided to slap a health tax on foods known to be bad for your one's health.
It does not stretch the imagination too much to envisage a day when claims for damage to health against companies such as McDonalds become a reality, especially when science is able to make the case against fatty foods more convincingly.
It is not beyond the bounds of possibility that McDonalds could face massive compensation claims in the future if litigants can point to a direct link to the kind of food served up by food chains and their state of health.
Even if it doesn't happen, the fact a challenge has already taken place is indicative of the shift in attitude towards what we eat and those who serve it up for profit more than nutrition.
John O'Reilly of Davy Stockbrokers looks at those issues in a thought-provoking piece on the future of the food industry and the implications for the Irish food sector.
Mr O'Reilly, who is regarded as one of the country's leading food analysts, believes we may be heading for a "tipping point" when people make a decisive shift in their consumption habits, for health and other reasons.
"The tipping point is that decisive, if unpredictable, moment when an idea, behaviour, belief, consumer trend or fashion becomes contagious," he says.
He cites Malcolm Gladwell's book, The Tipping Point: How Little Things Can Make a Big Difference, as a trigger point for his views noting also that a World Health Organisation recent report says convincing evidence exists linking diet to several chronic diseases in humans.
Without stretching the point, Mr O'Reilly says there is a good chance that somewhere along the way, consumers will make a decisive shift in their eating habits and suddenly healthier eating and drinking will become the norm.
It is hard to square the sharp increase in the consumption of alcohol with increasing health awareness, which in turn could lead to a radical shift in eating habits.
But one does not necessarily conflict with the other, a fact attested to by the dramatic change in the type and range of foods currently on offer in supermarkets.
While the notion of a tipping point may be a bit dramatic, the food sector knows full well that people are looking for healthier food and drink options.
This shift in attitude has driven developments within the Kerry Group and Glanbia in the Irish context.
Without naming any names, Mr O'Reilly says if the "tipping point" comes, those who have anticipated the paradigm shift will be the winners.
In his summary, Mr O'Reilly cautions that there will be no market surveys or background research flagging the arrival of this radical change in attitude, which is the nature of a tipping point. Mr O'Reilly says the chances of such a shift happening in the not too distant future are greater than 50:50.
The fact that all the current market data continues to show existing trends as robust simply reflects things as they are, not as they might be.
Companies who keep an eye on this radical potential shift in consumer habits will do well and Mr O'Reilly says firms who take that approach will continue to get backing from Davy Stockbrokers.
