The Agribusiness World Today

Ken Shwedel
Investigador de Agronegocios de Rabobank, México
8 - 12 de Octubre de 2007

The World

So who cares what’s inside as long as the packaging works? When one considers the product that companies put on the market in reality the product is more than just the food itself. The package has become an important feature in the product concept. There is the basic need, of course, for a package that will protect the product during shipping, while insuring the quality and safety of the food product. The package design offers, essentially, in the store one last chance to convince the consumer to purchase the product. Information on the package can provide an opportunity for post-purchase communication with the client. Now, what we are seeing is that the convenience aspect of packaging is becoming an increasingly more important aspect in consumer purchasing decisions. According to research by Nielson, for example, in the U.S. purchases of luncheon meat in pouches doubled between 2003 and 2006, and now” represents 34 percent of the dollar volume of the total lunchmeat category”. What is interesting is that while sales of luncheon meat in pouches grew, non-pouched luncheon meat sales actually fell. This suggests “that easy-to-handle packaging is the key driver in the processed meat industry, and perhaps is more important to consumers than the quality of the product itself.” Besides convenience, including “portability”, when considering stand-up pouches, these also add an element of differentiation. The trend in pouch containers is expected to continue growing as consumers keep looking for convenience.

Surviving in the water market by selling more than water. Some years back the water market was a category that received little attention – sort of, so to say, a backwater market. As other beverage markets became more crowded, the major beverage players turned to water. When the water competition heated up, they looked to enhanced and fortified waters. What all this means is that “innovation and marketing clout will be key drivers in this category.” While that may be all well and good, the question for smaller company is how to compete against multinational world class competitors. For Clearly Canadian, a Vancouver based company, their strategy is to diversify out of the water category. Along these lines they have acquired DMR Food Corporation and My Organic Baby. What they are doing, in essence, is redefining the company away from enhanced and fortified waters to a provider of healthy choices, which also crowded, does give them more options to maneuver.

México

It’s something different. That is the tag line that Taco Bell is using as it launches its first outlet in the Mexican market. Behind this tag line is the recognition that they can not position themselves as another taco restaurant (taqueria). In fact, they are not even calling themselves a Mexican restaurateur. They are positioning themselves as unique fast food alternative. This isn’t Yum International's first incursion into the Mexican market. Between Kentucky Fried Chicken and Pizza Hut they have over 500 outlets in the country, of which 75 percent are company owned, with the rest being franchised.