Key Findings

Producers - At the producer level, emerging technologies and the ‘datafication’ of agriculture are providing farmers with the potential to obtain quantifiable information to continuously measure and monitor farm operations and react accordingly. Farmers who can complement these technologies with suitable operational and commercial practices could see profitability increase significantly.

Processors - Evolving consumer trends such as the demand for healthy and ‘clean label’ products, increased demand for ‘functional foods’ and the growth in protein consumption will drive innovation in the sector. While having strong technological capabilities is key to taking advantage of these trends, it is not sufficient. The ability to identify and exploit consumer insights from local markets is also vital in generating increased value for consumers and higher margin products for producers.

Retailers - A number of trends such as the growth of a healthy snacking culture, higher food consumption outside of the home and the growth of online and mobile shopping are changing the way food is being bought and consumed. Retailers must adapt to these trends through better use of technology and data to target customers with tailored offers and ensure that they can match supply and demand in smaller stores through better inventory management.

Looking across these trends, it is clear that changing consumer demand patterns are impacting food production and consumption at all stages of the value chain. Deloitte research has identified a number of new value drivers for consumers when making their food choices. The ‘Traditional’ value drivers of price, taste and convenience have been supplemented by ‘Evolving’ drivers of health and wellness, safety, social impact and experience.

The research suggests that purchase decisions are increasingly based on “product plus” factors, such as specific ingredients, how the product was made, where it was made and corporate values of the manufacturer and retailer, amongst others. Firms must therefore think beyond individual product attributes to factors such as how the product is produced, the nature of the supply chain, etc.

Firms must also be able to communicate this holistic approach to consumers and provide them with relevant information in an open and transparent manner. In an era where consumers can access more information than ever before, and social media provide platforms to voice displeasure, actors at all stages of the value chain will need to work hard to maintain the trust of a more demanding and empowered consumer.