This week’s PMA Talks: Southern Africa, focused on the changing patterns of consumer consumption and how role players in the fresh produce supply chain are adjusting to these changing needs.

The participants were Dawie Maree of FNB Agriculture, Karin Du Chenne and Norman Reyneker of Kantar, and Emmie Pietersen of Peritum Agri Institute.  Anouk Sijmonsma, PMA regional vice-president for Southern Africa facilitated the session.

Change in consumer demand

A change in consumer demands have started already before Covid-19 due to economic challenges. Low economic growth has put the consumers’ disposable income under pressure and they’ve started moving to cheaper alternatives for proteins and other nutritional sources,” Dawie Maree, head information and marketing at FNB Agriculture.

With the lockdown and closing of restaurants and food services we have seen major shifts in consumer demands, which resulted in an oversupply of certain fresh produce, such as lettuce and avocadoes.

Growers need to be well informed and understand market trends and consumer behaviour to meet their demand. PMA’s role is to provide important educational information and resources to help make sure all its members are well informed and prepared.

For the months to come, the shift in consumer demands will continue moving to essential goods and away from luxuries.  Online shopping is not yet a buying alternative because of the digital divide between urban and rural infrastructure. Internet access in rural areas is still relatively poor. Online grocery shopping might be a trend for the future, but not the immediate future.

Key priorities as businesses start to emerge from COVID-19 lockdown

Sensible business plans and strong management skills will be vital as we emerge from the COVID-19 crisis. Essential skills include management and planning; cash flow management; marketing skills; and future planning (succession planning). Tertiary education in agriculture, such as agricultural economics, will be beneficial.

Diversification will also be key. When you diversify, consider off-farm investments as part of your long-term plan. Work together with exporting or marketing agencies, or some other kind of off-farm investment. 

Look into the opportunity of marketing different grades of products. Consumers who previously bought first-grade produce might have switched to the second-grade leaving them with more disposable income to buy other essentials.

COVID-19 influence the price of food in South Africa

Some imported products’ prices will decrease in supply and increase in price, such as rice and wheat. In terms of fresh produce, we are net exporters, there is more than enough. We expect another bumper crop in citrus this year too – so we do not foresee a substantial increase in prices for produce. Affordable and availability in terms of logistics might be impacted.

Importance of your finance partner

One important thing that we would like to emphasise is the importance of your finance partner to keep them informed of what’s happening in your business. If something happens, they can strategise and make plans before a crisis happens. Because of South Africa law, once a company defaults on payments there is not much that can be done. But before then there is a lot that can be done.

Consumer and shopper demand behaviours in a time of Covid-19

Kantar experts share how thinking out the (produce) box is the best way to adapt to the COVID-19 challenge and embrace what consumers now want.

Global trends from our COVID-19 Barometer study

Kantar’s C19 Barometer is the largest study of its kind, on how COVID-19 is influencing consumers’ behaviours, attitudes and expectations​ across over 50 markets and ​over 45,000 consumers.

Unpacking how people are feeling in this unique situation, it’s clear that the future feels uncertain for all of us, but we can draw some hope from China, which is coming out of lockdown and seeing both production and purchasing almost back at the same rate as a year ago. It took just six weeks for FMCG to return to pre-COVID growth rates​ according to the ‘China Wave’.

​This shows that it’s not the strongest of the species, nor the most intelligent that survives. It’s the ones that are adaptable that will be successful, so we all need to think-out-the-box and pivot business focus to survive.

It’s a time of huge shock and fear across the globe, and as we go through lockdown, habits are changing as consumers strive for normalcy and new habits. We’re trying to eat in a healthier way, but temptation does still hit, and snacking is a new feature. Ready-made meals are not as popular as before, with the opportunity to bake as we now have more time to do so.

People are looking for comfort and reassurance, to be as well-prepared as they can be. In terms of food trends, increased demand for those seen to boost strength and immunity, in the rest of Africa, lemons and ginger are flying from the shelf.

Consumers are also looking for practical ways to minimise waste and get products to last longer, while also looking for new ideas on what to cook.

People are shopping as local as possible to avoid travel and feel safe closer to home, delaying big purchases as there’s a spike in at-home media consumption, so if you can create content, they will consume it.

We’re now picking up that Fear of Going Out (FOGO) has replaced Fear of Missing Out (FOMO), so even if restrictions lift, they’re likely to stay cautious and will keep trying ecommerce channels and non-cash payments.

Brands need to help consumers make better choices, especially as new behaviours are coming out tops:

The linked report shows the opportunity for brands to inspire, as more people are cooking and baking from home. Those who stay close to consumer behaviours as they evolve will be ready when recovery comes. ​

In addition, we need to be cognisant of the fact that financial concerns are real. Consumers need to make difficult choices now, so make sure you’re helping them in an affordable way as there’s greater demand for local products than ever before. Dial up your ‘South African-ness’ as there’s now a fear of buying products with external provenance.

As one would expect with economic uncertainty, people are more price-conscious and looking out for bargains, so you need to ensure that you’re offering good value. Retailers that win are showcasing the goodness of the product, which works are consumers are steering away from luxury buys like steaks to mince and focusing on staples to plan for the uncertainty of the future.

Dial into what people are talking to and what they want right now, as many groups starting on Facebook with ideas on how to keep food fresh as they simply can’t afford to waste right now.

In terms of new attitudes, hygiene will remain important as we focus more on in-home consumption, with long-term sustainability and packaging trends coming up for a rethink as consumers instead focus on short-term safety and a shift away from naked food.

Ideas to win with consumers in these trying times

Retail is set to be disrupted for the long run. It’s a daily challenge as consumers are responding in real-time, with new lockdown regulation changes coming in constantly, each of which changes their views. This emphasises the need for all of us on the other end of the supply chain to keep an ear on the conversation.

For example, some changes are expected to stick once lockdown lifts, such as online shopping. This means that brands and categories need to accelerate their digital transformation, particularly as food and beverages are being bought online more than before. Consumers are looking for ease and convenience, as COVID-19 has catalysed this change towards omni-channel.

We now have more access points to purchase almost anything, anywhere, which has allowed underlying trends to come to the fore, as new ways of shopping take hold across the globe.

Especially in South Africa, we need to remember that online isn’t limited to websites, as digital commerce includes WhatsApp and SMS ordering. Think beyond production and supply to the whole customer journey and integrate campaigns to reach consumers everywhere they’re spending time.

Are you listed everywhere your consumers are shopping? People are avoiding big malls and relying on delivery. Retailers offer practical new channels and relevant support to even taking the shop to the people, so now is the time to innovate.

Four areas of action to help you win in the new normal

• Purposeful help

Consumers are looking for new ideas so make sure your product inspires hope and optimism through communication that informs and provides practical help.

• Right product, right place, right time

Collaborate where you can. Leverage your route-to-market options to ensure the right packs are available in the right channels at the right time. ​

• Packs, pricing and promotions

Fix the fundamentals along the path to purchase. Is your product clearly visible both in-store and online? Have you bundled requirements and are you promoting them this way? Use clear pricing structures and simple promotional mechanics that deliver “value for me”. ​

• Collaborate

Fast delivery is thriving, as the platforms that facilitate sales have come to the fore.

Work with those who are already doing this well and leverage appropriate partnerships with associated categories, supply, retailers, social commerce and consumer forums. ​

Now is the time to test, learn and try new things, as you either integrate or stagnate. Omnichannel retail is exciting, fertile soil for produce right now. ​ With retail now in flux, all players are in a race to secure availability and visibility where it matters. ​So, fill the gaps, fix the fundamentals ​and gear up for an omni-channel-led future​.

Source: PMA Marketing in South Africa