BOCA RATON, FLA. — Give Denise Morrison, the Campbell Soup Co.’s president and chief executive officer, credit. During her company’s presentation at the Consumer Analyst Group of New York conference on Feb. 18, she did not equivocate about the current state of the consumer packaged goods sector. She confronted the issue head on and left no doubt the marketplace her company, as well as many others, are competing in is in the midst of dramatic change.
“We are contending with what I’ve previously characterized as seismic social shifts that are redefining the fundamental framework in our relationships with customers and with consumers,” she said. “They include, for example, major demographic changes not only in the rising importance of new consumer populations such as Latinos and the millennial generation, but also revolutionary changes in the definition and composition of the family that bear witness to a world of increasing diversity, new economic realities and powerful social transformations such as mushrooming numbers of adult-only households, single-parent households, multigenerational households, multicultural households and same-sex households, all of which eat and shop differently than the traditional family as our industry long defined it.”
In the midst of the redefinition of the traditional family, Ms. Morrison said Campbell Soup also is confronting “profound shifts in consumers’ preferences and priorities with respect to food.” The shifting preferences include increased interest in fresh foods, a renewed focus on health and wellness, and mounting demands for transparency.
“And along with this, as all of you know, has come a mounting distrust of so-called big food, the large food companies and legacy brands on which millions of consumers have relied on for so long,” she said.
Ms. Morrison added that how consumers learn about food and beverage products is changing as information is communicated more quickly through digital technologies. This access to information, in turn, is changing how consumers shop for food.
“We are seeing significant pressure on mainstream food products, on traditional channels, including traditional grocery stores; the continuing rapid growth of alternative channels at the expense of grocery stores, a value in premium offerings at the expense of the middle range, and of the retail perimeter at the expense of the center store,” she said. “And of course we are also witnessing a major global economic realignment with a shrinking middle class in developed markets and continuing robust growth of the middle class in developing markets.“These trends are converging to forge what is really truly a new era in the food business. They produced a persistently challenging environment for packaged food companies in the past several years and they are not going away.”