The key issues for food businesses

Posted by Daniel Palmer on 4th August 2009

The Food Business Forum, which brings together management from around 400 retailers and manufacturers operating in 150 countries, recently released a mid-year update to its annual Top of Mind report, discovering that corporate social responsibility (CSR) was steadily being pushed down the list of priorities. The global recession has removed it from the head of the list, as pricing, assortment and store formats become top-of-mind.

Pre-eminent food industry body CIES, canvassed the top ten business priorities of its members, the CEOs and senior executives of international food retailers and manufacturers in the run-up to the World Food Business Summit, which took place in New York June 17-19th.

The survey found CSR – including sustainable development, social standards and corporate governance – had slipped from the industry’s number one priority in January 2008 to third place in January 2009 and now fifth in June 2009 as recession bites across the world.

By contrast, ‘the retail/brand offer’ – which includes pricing, assortment and format – climbed to third place, up from fifth in January. Another mover was ‘consumer marketing’ (such as loyalty programmes, promotions, advertising) which rose one place to rank seventh.

“While the fall of CSR may initially look troubling, I personally don’t feel there is cause for concern,” Gareth Ackerman, CIES Summit Committee Chairman and Chair of South Africa’s Pick n Pay Holdings, said. “Between January 2008, when leaders gave it top priority, and now, retailers and manufacturers alike have completely rebuilt their business models to incorporate environmental and social sustainability into the DNA of their companies. Going forward, all business decisions must pass through the sustainability filter, or be rejected.”

The Industry Response
“This shift demonstrated in our survey is timely and to be expected,” CIES CEO, Alan McClay, advised. “With the current sharp decline in consumer demand, the consumer goods industry needs to concentrate on keeping its customers satisfied and its employees in work. The industry must make adjustments to its core offers, reviewing prices to support those hardest hit by the downturn and ensuring assortments remain relevant.”

“Now that the systems are in place to learn how to minimise the environmental and social impact of doing business, the industry must turn its attention to supporting consumers through the current downturn.”