Competitor Strategies in Staple Foods

Delivery

This report comes in PPT.

Key Findings

Cost of living impacts strategy

As companies adjust to a global food market increasingly characterised by high interest rates and rising food prices, they are moving from seeing revenue increases (due to prices) to focusing on recovering or increasing their volume sales. For some, this means a focus on premiumisation, or increasing private label capacity, while for others it means a change in pricing strategy to maintain profit margins.

Continued challenges in supply chain

Staple foods leaders are dealing with instability in the grain supply chain, a critical commodity that impacts many categories of staple foods. As a result, many are opting for one of two strategies: restructuring the supply chain for near-shoring or localisation, or choosing to enhance their ingredient diversification to offset shortages.

Differential market focus

Many major players are invest in emerging markets, although not all are making this an overall expansion strategy. For some players, a focus on developed markets yields better financial returns in the current economic situation. As a result, there is no common strategy regarding market expansion in staple foods.

The challenge of ultra-processed foods

Due to the nature of staple foods production, many of them are susceptible to being labelled “ultra-processed food”. To avoid negative connotations, industry leaders are investing in research alliances that highlight the benefits of modern production and the healthy nature of their ingredients, and are focusing on clean labels as much as possible.

Industry dependence

Industry dependence in processed meat categories can lead to higher distribution costs and less agility, because of the specialised supply chain needed for different staple food categories. This is exemplified by vertical integration in processed meats and in cereals. The greater the need for vertical integration, the higher the odds for total industry dependence among leading players, which can hinder expansion to other categories.