Global food CEOs see no let-up in competition

Food company executives across the globe remain preoccupied by competition — struggling in mature markets, developing new products, consolidation and channel-blurring, according to the annual “Top of Mind” survey by Paris-based CIES — The Food Business Forum.

For the 2006 survey, 299 executives from 42 countries worldwide took part. Generally, “competition” was the No. 1 concern in last year’s the survey, as well. In second place both years was retailer-supplier relationships. “Price negotiations have remained tough and tensions have been increased by the expansion of private label by retailers and the entry of manufacturers into discount channels,” the report said. “Food processors are being squeezed by upscale operators and non-grocery sectors from foodservice to electronics.”

Health and nutrition, meanwhile, moved up from fifth last year to third this year, establishing itself as a long-term priority for food companies worldwide. This area represents both a social responsibility and a commercial opportunity to develop products and services in step with consumers’ health concerns.

While price is as important as ever, companies have found other ways to adapt their retail offerings (No. 4 in the survey). Innovation and differentiation have become priorities for most operators in order to break out of low growth in the mid-market. Worries about customer loyalty and marketing moved down several steps, from third in 2005 to sixth this year.

To download a PDF of the nine-page report, see www.ciesnet.org/fbnplus/CIES_Top_of_Mind_2006.pdf.

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