WORKING WITH CONSTANTLY EVOLVING TRENDS
ECONOMIC AND DEMOGRAPHIC TRENDS
We live in a global economy and the prevailing downturn in Europe may influence consumer behaviour and thereby impact our ability to achieve profitable growth. In some markets, we have seen polarization in consumer demand. The demand for affordable products has for example increased and at the same time the demand for expensive organic, premium-quality meat cuts has increased. In the emerging markets, where we are also establishing a footprint, meat consumption is increasing among the growing affluent middle-class segment of the population.
In the Western world, the ageing population and small households are creating new needs in the food offering, distribution and packaging solutions, for example.
MEAT INDUSTRY TRENDS
Demand for meat is increasing globally. Within the meat category, white meat consumption is increasing at the expense of red meat, and becoming the most popular meat type.
Meat is a wholesome food with great health benefits. HKScan sees it as a good source of protein and an essential part of a healthy diet. Together with vegetables, wholegrain products and vegetable fats, meat is a key part of meals corresponding to nutritional recommendations.
The consolidation of the meat industry is also resulting in polarization. You are either a major player with big volumes or a specialized local player with an artisanal approach. Big players, like HKScan, seek to optimize their operational footprint, productivity (e.g. by automatization) and supply chain, as well as reduce their environmental impact. Small players need to establish profitable sales channels, but nationwide distribution via retail is seldom an option for them. Cooperation with big players and other parts of the supply chain is crucial for their business.
FOOD RETAIL TRENDS
Food retail customers, even those with good purchasing power, are constantly seeking value for money, i.e. they look for a good mix in their shopping experience (retail location, size, products, parking) and a food assortment offering a good price-quality ratio.
Discounters are seizing an increasing share of the business and their assortment is becoming more varied. Instead of selling only basic products, discounters today offer more premium products, such as seasonal meats. Hypermarkets are struggling with their large retail space, as part of their offering (e.g. electronics) has moved online. Supermarkets and convenience stores typically focus on local, convenience and on-the-go food.
Online retail is still relatively small, being most advanced in the UK and France. Growth is expected to continue, but further investment in logistics is required and customer volumes remain modest for the time being. We at HKScan need to be ready to offer the best products also for our online retail customers.