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Future belongs to poor countries
Real quality earns premium price
Convenience, health still drive innovation
Fish
Future belongs to poor countries
Developing countries will produce
and consume almost 80% of the world’s fish catch within 20 years, and
almost half will come from fish farms, predicts a new report from the
International Food Policy Research Institute (IFPRI) and the World Fish
Center.
The report, Outlook for Fish to
2020: Meeting Global Demand, predicts a greater reliance on fish
farming could force a trade-off between the health of wild fisheries and
the environment, and the well-being of the poor. It says that within 20
years, developing countries will be responsible for 77% of global fish
consumption and 79% of world production.
Fish consumption in developing
countries will increase by 57% from 62.7m metric tons in 1997 to 98.6m in
2020. By comparison, fish consumption in developed countries will increase
by only about 4%, from 28.1m metric tons in 1997 to 29.2m in 2020. This is
due to rapid population growth, increasing affluence, and urbanisation in
developing countries.
Fish farming will continue to
expand, since most of the world's existing wild fisheries are tapped to
capacity or beyond. More than 40% of fish consumed in 2020 will come from
fish farms, it predicts. Aquaculture production is expected to nearly
double from 28.6m in 1997 to 53.6m metric tons in 2020.
But this could increase pollution
and the use of scarce water and land resources, threatening the
environment and the poor in developing countries, warn the authors.
Innovation
Convenience, health still drive
innovation
Convenience and health are the two
megatrends driving consumer buying and should therefore be the focus of
new product development, says a new Datamonitor report, Emerging
Concepts in Food, Drink and Personal Care.
“Opportunities exist to target
more specific medicinal needs such as hypertension,” it says.
“Mounting interest in the Atkins diet is creating an unmet need in many
food and drink categories, and blurring boundaries between CPG markets
offer new opportunities such as food products offering beauty benefits.”
Other trends it spotted include
gourmet express dining, service and retail channel blur, natural
ingredients and regional products, and personal care factors such as
pseudo-Botox treatments, male cosmetics and new cosmetic ingredients.
Behaviour
Real quality earns premium price
L’Oreal’s advertising slogan Because
I’m worth it may have struck a deep chord in middle class Americans.
A new study by management consultancy Boston Consulting Group reveals that
most middle-market consumers are willing to pay more for better-performing
products that provide emotional satisfaction.
This is driving growth of 10-15% a
year a market in “New Luxury” goods worth $400bn in 2003.
The national survey of Americans
with household incomes of $50,000 or more shows Americans think of
themselves as active connoisseurs of premium-quality, premium-priced goods
and that they know how to buy quality without compromising their finances.
And they are prepared to pay more even in hard times to get the right
quality.
The findings are confirmation of
trends spotted by Faith Popcorn back in the 1990s, among them cocooning
and small indulgences. Consumers created the demand and more and more
suppliers are meeting it, the survey found.
Michael Silverstein, a senior
partner at the Boston Consulting Group and co-author of the upcoming book Trading
Up: The New American Luxury, says "Today's consumers trade up in
categories that matter to them, such as food or home furnishings, and
trade down in categories that matter less.
Although two-thirds of respondents
reckon the economy is poor,
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92% say that better performance
and features make it worthwhile to pay more for premium-quality
products.
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87% are willing to economise in
some areas to spend more on higher-quality products that matter to
them.
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85% would rather spend more for
premium-quality products that are a little nicer or better than
run-of-the-mill, even if it's a cup of coffee or a car.
Silverstein says consumers
"are trading down where the product doesn't capture their emotions,
their tastes and their energy. This is not about traditional luxury goods
like furs, and jewels; this is about a new class of goods with superior
quality, durability and design but are plentiful, readily available and
still affordable. Those goods are capturing up to 20% of the customers,
40% of the revenues, and 60% of the profits in many markets, from pet food
to vodka to cars."
The reasons are simple: it makes
them feel better; it makes hectic lives more enjoyable; and it enhances
time spent with people they care about.
The report found respondents lack
enough time in the day (76% agree) or enough sleep at night (50%), and
many experience stress (54%) and are not engaged with friends often enough
(53%). As a result, three-quarters will spend more to enhance quality time
with friends and family, which means better food, sit-down meals or wine.
Paying more and buying up is for
most also a reward for hard work (Because I deserve it) and a way
of relieving stress for almost half of respondents.
"There is a no longer the
potential to 'out-wit' the American consumer, who is savvy, discerning and
independent,” Silverstein says. “This is good news for the growing,
but still small, number of producers who understand they need to deliver
something special to the general market, but bad news for traditional mass
marketers who are competing on price and conventional brand loyalty."
But they are not going to blow
their budgets. Nine in 10 say "I may spend more for certain premium
quality products, but I never compromise my personal financial
situation."
These new shopping values work
across the board. "This New Luxury idea happening in clothing, the
home, cars, food, sports equipment, travel,” he says. “Americans are
buying New Luxury products to help them nest; experience adventure, as in
food, wine and travel; feel closer to loved ones; and to 'treat'
themselves to alleviate some of the stresses in life."
Clicking into the New Luxury
mindset is paying off for suppliers. In a separate study, BCG analysed the
first-half 2003 sales performance of 15 New Luxury companies (all profiled
in Trading Up). Their customers pay premiums between 20% and 200%,
e.g. $6 for a Panera panini rather than $3 for a deli sandwich, or $28,600
for a BMW rather than $20,000 for a Pontiac.
The 15 New Luxury players posted
average sales gains of 17.8% and a median sales gain of 15.1% for the
first half of 2003, compared with the first half of 2002. Total personal
consumption expenditures in the US rose less than 5% (and less than 3% in
real terms) during the same period, according to the US Department of
Commerce.
But more are climbing on the
bandwagon. More than eight in 10 respondents
believe there are more affordable premium-quality products than there used
to be.
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