The future consumer: Are businesses underestimating change?
Perhaps the most provocative finding in our research concerns something many businesses say is not affecting them.
GLP-1 weight-management medications have attracted considerable attention for their potential effect on patterns of food and drink consumption. Yet our findings indicate that many respondents report little or no effect on their business at present.
How will or how has the advent of GLP-1 drugs for weight loss affected your business?
Positively
Negatively
No effect
The temptation would be to conclude that GLP-1 is not yet a significant issue for the sector. That may be too simple.
No effect, or no visible effect yet?
Consumer change rarely works its way through the food system evenly.
A hospitality operator, snack manufacturer or retailer may see shifting purchasing patterns relatively quickly. For an upstream commodity producer, the connection may be considerably harder to identify because weather, water, energy, storage and input costs exert a more immediate influence on the business.
The broader issue is how businesses recognise emerging consumer trends and assess their implications for future demand. That shifts the discussion from one category of medication to the ability to identify and respond to changes across the customer base.
How quickly can businesses identify structural changes in consumer demand? How far upstream should businesses be looking? And how do they distinguish a temporary trend from something that may eventually influence product formulation, portion size, nutritional positioning or demand for particular categories?
Threat and opportunity
Changing consumption need not simply mean declining demand; for some food and beverage categories, it might mean increased demand.
Potential changes in portion sizes, demand for nutrient-dense products and the prominence of protein and fibre may create opportunities for innovation as well as disruption. If consumer behaviour is beginning to change, the businesses best positioned to respond may not be those that can predict exactly what happens next. They may be those capable of spotting changes early and adapting products, propositions and investment accordingly.
"We’ve seen more products on the shelves containing collagen or additional protein in recent years. Alongside this, early stage businesses are using plant biotechnology to improve nutritional value and help address gaps in modern day diets. Where nutritional benefits can be scientifically demonstrated, there may be an opportunity to command a premium.
"The challenge is that bringing these products to market can take a long time, so realising that opportunity requires patient capital. That can be difficult to secure when investors are drawn to businesses offering quicker returns."
Christina O'Brien Corporate Lawyer, Mills & Reeve
The takeaway
The most important question may not be “Is GLP-1 affecting our business today?” It may be: “What changes in tomorrow’s consumer are we not yet seeing?”
