Tomorrow's Consumer

A personal view of what tomorrow's consumer will look and how they will behaviour with a special focus on food

1. Alan Smith
A & P Marketing
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“What Will The Consumer
of Tomorrow Look Like?”

2. A & P Marketing Contact: [phone]
"Garlic bread, it's the future, I've tasted it!"
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Peter Kaye, Phoenix Nights, 2001

3. A & P Marketing Contact: [phone]
1985: Avocado
I Have Had Many Garlic Bread Moments..
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1974: Cheesecake
1981: Pizza
1998: Rocket
2010: Quinoa
1975: Chinese Food
Note: Years are approximate; my memory is not that good!!
2008: Sweet Potatoes
1995: Thai Food
1982: Indian Food

4. A & P Marketing Contact: [phone]
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5. A & P Marketing Contact: [phone]
Future Gazing
•The best indicator of the future is what has gone before..
–So first will explore Key Drivers


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•BUT you don’t drive your car by focusing on your
rear view mirror
–So also review possible Disruptive Changes

•A brief consideration of Constraints to Change

•Before plunging in to describe tomorrow’s
consumer focusing on behaviour rather than
simple technology change

6. A & P Marketing Contact: [phone]
“Predictions are difficult, especially about
the future.”
- Yogi Berra

7. A & P Marketing Contact: [phone]
Past Forecasts..
•“Computers in the future may weigh no more than 1.5 tons”
•“I think there's a world market for about five computers.”
–Thomas Watson (1874 - 1956), IBM CEO

•"Earlier on today apparently a woman rang the BBC and said she had heard that there
was a hurricane on the way. Well if you are watching, don't worry, there isn't."
–Michael Fish, Weather Forecaster 1987; that evening, the worst storm to hit
South East England for three centuries caused record damage and killed 19
people.

•“Rock n’ Roll? It will be gone by June.”
–Variety Magazine, 1955

•“Stock prices have reached what looks like a permanently high plateau”
–Economist Irving Fisher in October 1929, 3 days before the Stock Market Crash..

•"This 'telephone' has too many shortcomings to be seriously considered as a means of
communication. The device is inherently of no value to us."
–Western Union internal memo, 1876
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8. A & P Marketing Contact: [phone]
Hugo Gernsback’s "Scientific Restaurant“ 1911
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“A flexible tube hung down to which fastened a silver
mouthpiece, that one took out of a disinfecting
solution . . . . The silver mouthpiece was then placed
in the mouth and one pressed upon a red button. If
spices, salt or pepper were wanted, there was a
button for each one which merely had to be pressed
till the food was as palatable as wanted. Another
button controlled the temperature of the food.
Meats, vegetables and other eatables, were all
liquefied and were prepared with the utmost skill to
make them palatable. . . . They did not have to use a
knife and fork, as was the custom in former
centuries. Eating had become a pleasure.”
Gernsback envisioned a restaurant where tubes would pump easily digestible
food slurries right into people's mouths:

9. A & P Marketing Contact: [phone]
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So let’s build a possible
picture of the consumer
of the future looking at
the key Drivers

10. A & P Marketing Contact: [phone]
Population Growth
•Global population growth and subsequent immigration to the UK has
shifted population dynamics; the UK once seen as a greying population is
getting younger
–Since 1964 the UK population has grown by over 10 million people
+18.7%. About 50% of this growth has occurred in the past 15 years….
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•Population now forecast to grow from 65million
to around 85m in 2080
–Europe’s largest population by 2047

•Migration brings younger consumers and leads to
more children, but overall population still greying:

•People are living longer, but their prosperity will
be variable depending on their pension provisions;
75% of UK wealth already owned by +65 year olds
So more future consumers and more younger and family consumers, BUT
older consumers will grow the most significantly and their wealth will
make them disproportionately important 11.4
12.6
12.7
13.0
9.7
5.2
12.4
13.5
13.2
13.4
12.0
9.9
0-14
15-29
30-44
45-49
60-74
75+
20392014
Projected UK Population by Age Group:
Source: ONS

11. A & P Marketing Contact: [phone]
Growing Wealthier
•Despite the recession the long term trend is for individuals to get wealthier..
–Unemployment continues to fall
–Low inflation / Interest rates
–Salaries are increasing once again
–Technology driving down prices
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•But the recession has left consumers more
price conscious, and suspicious;
–Demand the best but at a price
The consumer of tomorrow is likely to be better off than today and so more
likely to seek premium foods / eat out but only “at a price”
•But, wealth will continue to be disproportionate; older consumers will have
the greatest wealth, and new technologies; driverless cars, algorithms,
everyday robotics etc may make them even wealthier and the young less so
–Although older consumers likely to help children / grandchildren..

•Food will remain relatively cheap offering the potential for everyday
indulgence, as well as distinctive health benefits

12. A & P Marketing Contact: [phone]
Health
•Increasingly diet is directly related to Health; most obviously obesity growth; 60% of
the UK population classed as overweight and forecast to grow to 75% by 2025*

•As health costs continue to rise there will be increasing pressure for consumers – and
retailers – to take better care of their diets and/or to meet their own health costs;
–In England a potential funding gap of £30bn by 2020/21 unless additional funding
is made available or substantial productivity savings is forecast**
–An ageing population will continue to make this more critical.
12 *World Obesity Forum October 2015 ** The Health Foundation, January 2015
•This Health crisis will lead to further Government pressure on food
producers to produce healthier products, to restrict advertising to
children; and/or possibly “sugar taxes”
–Some suggest parts of the food industry could be viewed as the
tobacco industry is today…
The future consumer is likely to be bigger, perhaps more knowledgeable on food
with pressure to eat more healthily – and more suspicious of producers

13. A & P Marketing Contact: [phone]
Chasing Experiences..
•With more and more “stuff” a greater value is placed on experiences;
–Music streaming rather than CD’s; On-demand video rather than DVD’s; car
sharing rather than car ownership; renting rather than home ownership etc etc
–Even ‘Meal Deals’ in-store seek to replicate the restaurant experience at home
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Increasing blur between retail and food service with more eating out and
growing interest in ‘pick your own’ and provenance!
•Consumers want to gain experiences rather than shop;
–The Internet’s sheer power and efficiency mean transactional
retailing can be better online, and via your phone
–Department stores were the anchors and key drivers of visits to
the shopping centre, but now it’s restaurants and food services
–“Retail-tainment” not new but likely to grow much further
•More opportunities for producers to emotionally connect with consumers; farmers
markets; open days at farms & factories; pick your own; cooking days
–Demonstrating authenticity

•Scratching cooking as a leisure activity but without the boring bits; cutting & slicing;
washing up etc

14. A & P Marketing Contact: [phone]
Desire for The Best: Indulgence
•As consumers grow wealthier will increasingly demand more
treats;
–But greater price consciousness; consumers likely to
“budget”; premium occasions offset by cheaper everyday
ones as consumers’ maximise their experiences
–Food well placed as very much an affordable luxury
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Growing demand for premium treats ideally with a story that reinforces
their authenticity
•Linked to this is an increasing demand for authenticity, for which consumers will
pay more; hand-made, hand-crafted, often nostalgic
–Examples; craft beers; brands such as Thomas J Fudge in biscuits; Sipsmiths and
other craft gin producers; heritage varieties of vegetables and fruit

•Indulgence will extend from individual products to retailer outlets offering superior
and added-value service
–As the “main shop” fragments to smaller more frequent trips opportunities for
more specialist outlets develop

15. A & P Marketing Contact: [phone]
Environmental Concerns
•Consumers globally increasingly willing to pay more for socially responsible
products; 66% of respondents say they’re willing to pay more for products and
services that come from companies who are committed to positive social and
environmental impact, up from 55% in 2014 and 50% in 2013*
–Sales analysis shows that brands with a demonstrated commitment to
sustainability grew +4%, while those without saw less than 1% growth**
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•Nielsen 2015
** Nielsen 2014
Consumers will increasingly demand foods that they perceive have a
minimal impact on the environment and this will need to be balanced
against demands for Convenience & indulgence
•Increasing population, with social media back up, will further
increase desire for less damaging products and punish those that
do

•Technology will increasingly enable cleaner energy and logistics,
potentially also reducing costs, as well as creating greater
transparency
•“Age of Consequences”, where indulgence is fine – as long as it does a little good
along the way.

16. A & P Marketing Contact: [phone]
Convenience
•Convenience has been a major driver in food for many decades
from sliced bread, to canned spaghetti, TV dinners and ready
meals and will continue to be so

•Continued rise of food-on-the-go creates new convenience
opportunities further merging retail and food service
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Continued demand for new convenient solutions, but convenience may be in
the eye of the beholder; eg. scratch cooking rather than ready meals

•Home convenience focus on portion-control and individual tastes of the family, more
control, as well as a means of tasting new flavours they could not otherwise prepare

•Demand for nutritious and fresh meals will increase interest in “cooking” but with
convenient solutions to avoid the messy stuff, washing/cleaning up…. "quick
assembly" salad and meal kits, ‘no-touch’ proteins, prepared key ingredients..

•In shopping consumers continue to demand convenience of shop; local stores and
online as opposed to ‘big weekly shop’

17. A & P Marketing Contact: [phone]
Personalisation: Generation Me!
•We have moved from mass market to individual tailored solutions:
–From mass TV advertising to social media;
–At family meals every one around the table maybe eating something different;
–From mass fashion movements to individual tastes;

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–From a standard spec for cars to
individual specifications;
–From two major political parties to more
parties with influence;
–From waiting 2 to 3 weeks for deliveries
to next day delivery;
–From data in large reams of paper print-
outs to specific answers in real time


One size no longer fits all and consumers
demands for flexibility and personalisation
will only continue to increase

18. A & P Marketing Contact: [phone]
New Flavours & Textures
•Consumers continue to seek out
new flavours helped by holidays,
TV food programs, new
restaurants, immigration….
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•Stronger, bolder flavours continue to entice particularly spicy,
tangy, sweet and sour flavours – and also Umami Veggies; the so-
called ‘fifth taste’

•Experimentation likely to continue with increased ‘mixing it up’ to
create new foods or combinations of food
Consumers will continue to seek out new flavours and foods
from around the world and be more open to breaking the
‘rules’ as to how and what they serve them with

19. A & P Marketing Contact: [phone]
Technological Convergence
•Technology will continue to converge, and become cheaper – now not so much about
the technology capabilities but about consumer behaviour
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Consumers will increasingly recognise the true potential of technology in
shopping and organising their lives both online and off-line
•The smart phone usage already far beyond that of the ‘phone’;
–Shopping (as cash substitute in-store); shopping (online);
banking; music; video streaming; navigation, etc etc…
–Fuelled by faster download times / wi fi availability, and
cheaper connectivity as well as longer lasting batteries!
–Personal recommendations, and offers, as you shop a store
–More convenient, wearable, devices coming
•Grocery shopping online will become faster and more flexible with the Amazon effect
–Enabling producers to sell through portals direct to consumers bypassing grocers
–Online sales will extend from large ‘baskets’ to smaller ones; maybe for tonight’s
dinner
–Costs reducing by driverless deliveries / ‘drones’ / pick up points

20. A & P Marketing Contact: [phone]
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21. A & P Marketing Contact: [phone]
Basic Conservatism.. Inertia
•Few really like change, people are basically
conservative

•Although ‘newness’ is attractive, “too new” is
scary, the familiar is more comforting
–New foods need to adopt the guise of the
old
–Many still dislike and distrust self-service in
supermarkets or online grocery deliveries
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Consumers don’t like change but changes will gradually occur and can be
hastened by adopting more traditional and familiar formats
•However, change remains the only constant, presentation and timing are key to
success – or failure as well as the offer of genuine added value
–Sushi in the UK saw a number of painful failures before eventually finding lift-off
but remains niche, just a larger niche

•Level of change may encourage greater interest in comforting nostalgic foods

22. A & P Marketing Contact: [phone]
Existing Infra-Structure..
•When industries have committed to substantial infra-structure investment they are
reluctant to change..
–Online could produce new players in grocery, such as Amazon and producers going
straight to consumers
–Demand for greater individualisation can make high-speed volume lines redundant

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Retailers and producers may resist change to protect existing investments
but in the long-term are unlikely to succeed

•The large supermarket sheds will increasingly need to find new
uses which is already under-way;
–New food service partners
–Sell experiences; gyms; beauty parlours; Kids play centres;
adult activity centres;
–Sub-let space; already Tesco bringing in Dorothy Perkins,
Pavers* etc
•But existing infra-structure can increasingly be by-passed as evidenced by the rise of
online and the Discounters
* Retail Week, 25
th
October 2015

23. A & P Marketing Contact: [phone]
Lack of Claims…
•Strong claims can differentiate new products and enable consumers to readily
locate what they perceive they need

23 Without very costly pharma-quality research very difficult to introduce new
health claims; the internet may benefit producers outside of the EU
•Three EU schemes known as PDO (protected
designation of origin), PGI (protected geographical
indication) and TSG (traditional speciality guaranteed)
also can make it difficult to enter some market sectors;
eg Greek-style yoghurt Vs Greek Yoghurt
•Governments want us all to eat more healthily BUT European
regulation demands that health food companies come up with the
scientific evidence to back their labelling in terms of Health and/or
Nutrient claims which can be difficult and costly.

•European regulations make it virtually impossible to make direct
health claims on foods
–Probiotics could never happen launch today and be so successful
–Yet Governments want consumers to eat more healthily

24. A & P Marketing Contact: [phone]
Scarcity..
•In the UK Scarcity, not normally a problem except after difficult
harvests but with world populations growing – and getting
wealthier, and the weather seemingly less predictable, likely to
become more of a problem
–Particularly as the UK imports circa 40% of the food it needs
and this is growing**
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Greater scarcity in future whether from short-term social media excitement
and / or Global demand spikes.
Greater focus on waste reduction and local production
•Research from Yale University, Michigan State University and the Helmholtz Centre for Environmental Research in Germany 2015
** DEFRA - The Future of our Farming
•Some suggest we have reached 'peak food‘ and that shortages loom as global
production rates slow particularly in staples;
–Peak vegetables was in 2000, chicken was in 2006, while milk and wheat both
peaked in 2004 and rice peaked way back in 1988 according to research*
–However research also shows consistently 30 to 40% of food production is wasted

•Some foods will become scarce due to sudden surges in popularity such as recently
seen for quinoa, the speed of adoption increased via social media

25. A & P Marketing Contact: [phone]
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26. A & P Marketing Contact: [phone]
•GM Food currently heavily restricted in the EU

•New Technology & Convergence
–Sweeping changes from big data, the cloud, collaboration tools and the internet
–Driverless cars / drones; Toyota, Nissan, GMs and Google all plan self-driving cars
commercially available by 2020, and Apple said to be launching in 2019..
•Eat on your way to a destination – real Dashboard dining!
–3-D Printing,
–Efficient battery technology; for transport (maybe even your mobile phone!), for
storage from time-limited sources such as solar and wind
–New proteins; In Vitro Meat / Insects
–Biostimulants for crop yields

•Government / Politics;
–Sugar taxes, and other taxing possibilities! / New regulations
–Claims; either blocking or highlighting ‘new guidance’
–Brexit and / or independent Scotland….

Possible Disruptive Changes..
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Plus never forget unforeseen “unintended consequences”!

27. A & P Marketing Contact: [phone]
GM Food?
•First developed 30 years ago and already common in the US and prevalent in
animal feed around the world
–But public concern has led the EU to block GM foods and only one GM crop is
grown commercially in Europe – a type of GM maize grown mostly in Spain.
–Almost 90% of scientists from America's largest science body think GM food is
generally safe, but only 37% of the public agree
–Concerns are growing that the UK, and EU, are being left behind in a major
new industry

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*The Pew Foundation 2015
The case for GM Foods will need to be made by Government and possibly
some middle-ground will be found to offset Frankenstein foods fears

•In 30 years global population will exceed 9 billion
people to feed increasing demand for the quantity and
diversity of the food needed; GM is one of the tools -
but not the only tool - that could help humanity to
address these challenges.

•GM Foods would be a game-changer globally, but
ultimately do the benefits out-weigh the risks?

28. A & P Marketing Contact: [phone]
3 D Printing
•3D printers enable a 3D design on your PC to be printed out as a solid, usable object;

•3D printer shipments are forecast to more than double every year between 2016 and
2019, with worldwide shipments exceeding +5.6 million*
–Last year, 106,761 3D printers were sold worldwide. This year, shipments will
reach 244,533 units; next year, shipments are projected to top 490,000 units
–You can already buy a 3D Printer for under US $199

•3 D Printers will bring to manufacturing what mp3’s did to the music industry it will
prove virtually impossible to defend your designs
–And they could kill logistics as you design centrally and print at source

28 *Gartner Research 2015
•Behaviour wise I predict that 3 D printers will help foster a new ‘make
do and mend’ mentality; the knob on your favourite gadget breaks
then you simply search the internet for it and then print a
replacement
–For food this new behaviour may help encourage greater interest
in scratch cooking….. Unless of course you also have a 3D Food
printer…

29. A & P Marketing Contact: [phone]
3 D Printing Food Example
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•Dutch student Chloé Rutzerveld has
developed her Edible Growth project.

•3D printed a healthy biscuit matrix
containing plants from a combination of
seeds, spores and yeast

•The biscuit itself made from dried fruits,
vegetables and a gelatinous paste, called
Agar., which functions as a soil for the
seeds and yeast.

•After 5 days, the plants have grown and
the it can be eaten. Wait a little longer,
and the plants have more time to grow,
and the food’s taste intensifies.
•Today 3D Printing in food is not yet commercially an option and is limited to 3D
printed chocolate figurines, pancakes or maybe a pizza.
http://www.chloerutzerveld.com/#/edible-growth-2014/

30. A & P Marketing Contact: [phone]
Alternative Protein: In Vitro Meat? / Insects?
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•Meat is under threat:
–Expensive / Poor land efficiency
–Greenhouse gases
–Health concerns
–Contamination concerns
–Disease transmission
–Cruelty concerns….



•In-Vitro meat manufactures meat products through "tissue-engineering" technology.

•The first in vitro beef burger, costing €250,000, eaten in London in August 2013
•Bankrolled by Google co-founder Sergey Brin estimated to be worth $30.6 billion
•The marginal cost of original burger now €8.00 (March 2015)

•Will receive competition from cultured fungi synthesized meat substitutes & Insects…
Some reluctance but the proof will be in the tasting; basic products probably
10 years off mass commercialisation
Source: Daily Mail

•Global demand building as wealth increases; by 2050 developing countries are
expected to eat 72% of the world’s meat, up from 58% today.

31. A & P Marketing Contact: [phone]
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So what does all this
mean for tomorrow’s
consumer and the way
they shop?
A & P Marketing Contact: [phone]

32. A & P Marketing Contact: [phone]
So… The Consumer of the Future?
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•The next 5 to 10 years change will be modest unless there is major
disruption

•UK consumers will be more numerous, both older and younger, but
especially older


–Older consumers will be more wealthy than today but may be feeling the
pressure of helping their children and grandchildren
–Younger consumers will be further constrained by the cost of housing and
their need to pay off student debts
•This may reverse the trend for smaller households as families move in
together

•On average consumers will be over-weight but likely to be an increased divide
between the over-weight and the very fit
–A substantial minority will be very fit and work very hard to maintain this
position

33. A & P Marketing Contact: [phone]
So… The Consumer of the Future?
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•BUT consumers will feel differently..
–Rather than having “rights” consumers may
focus more on responsibilities for their health,
their family, their local environment
–Be more flexible in their work and lifestyle as
technology further erode some long established
jobs from van drivers through to middle
managers
–This in turn may make them more fearful of the
future but will also make many more innovative
as they leverage the new technology
–The new technology may also create more
local work opportunities as large scale off-
shore manufacturing loses out to small scale
production
–With a reliance on bias social media tailored to
their own beliefs and prejudices consumers
may be less trusting and more inclined to
disbelieve producers claims, or Government
health advice

34. A & P Marketing Contact: [phone]
So… The Meal of the Future?
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•Tomorrow’s Consumers will expect more from their food:
–They will be eating out more, although for many this may simply be food-to-go
–Seeking to eat more healthily spurred on by Government interventions
–More likely to seek out, and eat, health-enhancing foods
–Be ever more adventurous in what they eat
–Be more relaxed about what they mix up on the plate
–Have a greater interest in where their food comes from, and how it is produced
–Scratch cooking may grow further but will essentially be a leisure activity and
Convenience will continue to reign
–Maybe eating some new proteins but
likely to still be a novelty and a
‘statement’
–More vegetables are likely to be health
enhanced either from traditional
cultivation or from GM

35. A & P Marketing Contact: [phone]
So…. The Supermarket of the Future?
•Current tends will continue up until a point;
–More internet grocery shopping, but the big difference could be small as well as
large baskets;
•And will help break down barriers between Frozen and Chilled
–More direct selling from Producers via portals such as Amazon
–Continued blurring of retail and food service;
•Local hot food deliveries from retailers
–And blurring between online and offline world
•Personalisation of offers and recommendations as you shop
–Fewer large shed single outlets
–More self service to speed up process and your wallet need never leave your pocket
–The internet will make price differentiation difficult; focus on range, service and
quality

•Large scale 3D printers in-store could make stores more of a production hub
–And create more focus on in-store preparation, changing mind-sets on serve-over
food / in-store meal production

•However, service and quality will be more valued and so there will be more space for
specialist food retailers with obvious foodie expertise
–Regular shopping is boring, these retailers effectively offer experiences
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36. A & P Marketing Contact: [phone]
For further information please contact…
Alan Smith
Tel: [phone]
[email protected]
www.aandpmarketing.co.uk

1 Rose Leigh Way
Fern Park
Spalding
Lincolnshire
PE11 1GW
United Kingdom
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With thanks to Kerris Ganeson for her marvellous illustrations
http://www.kerrisganeson.co.uk