Seven (lucky for some) predictions for the food market in 2016
- The share of market for the discounters will continue to grow. While the growth rate for like for like sales may slow (slightly), new openings will continue to see them take an increasing share of the market
- The larger multiples will continue to struggle to differentiate their offer, apart from on price and they will find it difficult to develop the character or position which appeals to shoppers. Profits will remain more important than shoppers and food manufacturers’ margins will be squeezed even harder.
- Food and drink manufacturers will need to develop very distinctive market positions – particularly challenger brands – to stay in distribution.
- In the foodservice market, driven by new technology there will be a move towards super-service, driving convenience to a new level – no waiting, no queueing, service when (and where) the consumer wants it.
- We will have at least one big food fraud issue. Reported to cost the food industry billions every year, we will see a scandal in 2016 – this year’s was olive oil, will next year’s be fish?
- Sugar will continue to be demonised, driving formulation change in a similar way to that which saw big reductions in salt content across many years – whether you want it or not
- Food deflation will continue in 2016. What will be most interesting is the unknown effect of the National Living Wage – will this filter through to food prices?