Looking ahead after an eventful decade

by Keith Nunes
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On March 8, 2005, the first issue of Food Business News was published. The lead stories for the debut issue focused on efforts by Kraft Foods to reinvigorate its business, the Hershey Co.’s plans to spur greater growth by extending its product line into new categories and sodium reduction. Ironically, this issue features stories about Kraft’s plans to reinvigorate its business in the wake of challenges it has encountered (see this issue, Page 10) and Hershey’s efforts to expand its product portfolio building on the company’s great successes (see this issue, Page 35).

To the casual observer it may appear little has changed from when this publication was launched a decade ago. But this magazine was not created with the casual observer in mind. Our mission today is in line with what was articulated on this page in our inaugural issue: “The goal of FBN is to keep its readers fully abreast of developments within, and outside, the food industry that will determine the well-being of their businesses. Coverage of news about and of concern to the industry is at FBN’s foundation. It will be strengthened by analyses and commentary meant to provide guidance.”

As is the case with almost all new products, this magazine’s debut was predicated on the identification of a need for timely food and beverage industry-specific information to be of value to executives of both large and small companies. That need was identified by the readers of our sister publication Milling & Baking News. For more than 90 years M&BN has covered the grain-based foods industry, and readers of that publication who had moved on to management roles at companies in other segments of the food business like prepared foods, dairy and meat processing said they missed the comprehensive coverage M&BN provided its readership.

So, here we are.

During the past 10 years the food and beverage industry has experienced wrenching changes, exemplified in the amazing transformations at Kraft and Hershey. The lasting effects of the economic recession that began in 2008 are still being felt today as companies consider how to improve efficiencies in a marketplace in which growth has been difficult to find and in which consumer patterns are changing in ways still not fully understood.

Globalization and wide variations in climate have prompted many companies to become more sophisticated as to how they develop and execute raw material sourcing strategies. The dramatic swings in commodity costs the industry experienced between 2008 and into 2011 are still fresh in the minds of purchasing managers.

A review of the FBN archive shows how companies in 2005 were trying to address the growing impact mass merchandisers and warehouse stores were having on consumer purchasing trends. Wal-Mart was expanding its food assortment then, and it continues to do so today. Target Corp. followed suit with its own food strategy, and Costco has established itself as a leader in the warehouse/club category. What those retailers learned then, that food is an excellent tool to bring consumers into stores, is continuing today as the dollar channel, drug stores and convenience stores all are enhancing their food offerings in an effort to attract more shoppers.

The trend has had a ripple effect as such “traditional” retailers seek to differentiate by balancing their portfolios between long standing consumer packaged goods and such premium offering as natural, organic and non-G.M.O.

Cultural influences have prompted great change. Health and wellness, which in 2005 was synonymous with weight management, is now better associated with well-being. Simplicity had more to do with convenience then, but today this concept relates to formulations with easily recognized ingredients. And transparency, which was little talked about in 2005, is an increasingly critical component of marketing as consumers take advantage of their ability to quickly learn about the companies they patronize and the products they buy.

What do the next 10 years promise for the food and beverage business? Where will Hershey and Kraft be in their efforts to find success? So far as this magazine is concerned we will remain steadfast in assuring readers keep abreast of the range of developments that will help determine the future well-being of their companies.

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