The food and beverage industry has existed for centuries and it remains in a constant state of flux. Countless global factors impact the production volumes and overall state of the food industry, including changes in consumer demand. For this reason, it’s imperative to conduct market research for food manufacturers as part of the creation of every new product.
With the above in mind, figuring out where to find the more accurate market data, how to apply it, and what areas it can benefit is not always straightforward. Let’s go over the importance of market research and discuss the different advantages it can bring to your food and service manufacturing enterprise.
Market research is the process of collecting, parsing, and interpreting information in order to make the best product and service decisions. This type of research can help you choose the best prices, identify the most profitable audiences, and even decide whether or not to create a food product. Performing market research is a great way to protect your investment by making data-based decisions.
Instead of investing in the production and promotion of a new product before testing it out, you can use market data to determine if it’s a feasible alternative before you dedicate resources to its creation. This means that you’ll save your resources and only spend them once you understand the potential success rate of the food product in question.
Food manufacturers across the US and Canada have to adhere to a wide range of regulations and requirements in order to release new products. This, however, is not the only area that you have to pay attention to in order to ensure the success of your latest creations. The reputation, popularity, and overall reception will determine how many restaurants and eateries want to purchase the new products you offer. You can get an accurate idea of the type of reception you can expect by conducting market research.
Let’s take a closer look at some of the areas where market research can help food and beverage manufacturers.
Besides global climate and politics, consumer demand is the biggest driver of the food industry. This is the reason why an entire section of market research focuses solely on consumer trends and their changes.
Market research is divided into two major categories. These are qualitative and quantitative market research. The latter focuses on the analysis of the amount or volume of food that’s consumed, whereas the former tries to unveil the reasons why consumers buy certain food products. By conducting qualitative research, you can note the products that have high demand, drive growth, and stay ahead of competing decision-makers through in-depth insight analysis.
Market opportunities can be described as potential actions that may result in a performance, profitability, or reputation boost for your business. If you analyze the latest market trends, you’ll be able to identify opportunities that can propel your business forward. Remember, quantitative market research resources like focus groups can help you identify consumer needs.
With the above in mind, organizing focus groups and similar activities to identify market trends requires a significant amount of resources. The good news is that you can now learn about the latest market drivers and implement them into your business by working with specialized analytics platforms.
Building a marketing strategy is necessary to succeed in today’s on-demand economy. Fortunately, the data collection process can be applied to virtually all areas of your operation including competitor research, which is necessary for the creation of effective marketing strategies.
Besides helping you identify the hottest-selling products and offers, you can also determine which competitors have the largest market share. This data can help you decide which content marketing initiatives to start with, plus it can also provide a blueprint on how to build brand equity in a new market.
We’ve mentioned previously that the most direct benefit of analytics for food and beverage manufacturers is that the data can help with the development of new products. However, it’s also important to understand that market research can help you make sound decisions before and after the product launches. This includes what ingredients to use, where to source raw materials from, and what type of packaging you should use.
What’s more, new market trends can also unveil the biggest consumer questions and even the technology needed to manufacture new foods.
How much are competitors charging? Are consumers willing to pay these prices? What’s the average profit margin for every unit sold?
Market research is the best way to answer these questions and decide on the best price for each one of the products offered in your establishment. Remember, every restaurant has a unique combination of providers. So, if your trends analysis reveals that your competitors are able to provide much lower prices, you may need to conduct more in-depth market research. As an alternative, you can also get advice from a consulting firm that has extensive vertical expertise.
A food industry marketing strategy is necessary if you want your manufacturing enterprise to succeed. That said, your promotion plan has to be tailored to your company — and the best way to do this is to perform comprehensive marketing research. During the marketing research process, you need to define your service area and narrow down the businesses that make up your local competition in order to perform a full analysis of their strategies. You should follow this up with ideation sessions with your marketing experts. This way, you can figure out which successful strategies are suitable for your company while they are still fresh in your mind.
The food industry can seem truly unpredictable at times. However, consumer behaviour data and other market analytics hold the keys to identifying the patterns that define this space. As a food and beverage manufacturer, it’s crucial to leverage all the information you have available and access the most complete databases available.
Conducting market research undoubtedly takes time and requires an organized strategy. However, this process can help you create food products that are more appealing and profitable, allowing you to hit the ground running every time you want to test new goods.