New Rabobank Research explores how the beef industry should respond to the shift to online food purchasing
St. Louis, Mo. (Jan. 26, 2018) – The manner in which groceries are bought and sold is undergoing a swift and significant transition. The potential impact of these changes on the beef and cattle sector is the topic of a new report from the RaboResearch Food and & Agribusiness group. The report, “Food Fight! Online and Brick & Mortar Battle for Business. How Can Beef Ensure a Seat at the Table?,” explores how food reaches the average American consumer and what the beef industry will need to do to make beef an integral part of the consumption experience in this new world.
The report finds that of food purchased for in-home consumption, approximately 20 percent will be purchased online by 2025. These online purchases include not only traditionally packaged groceries but also complete meals packaged for home preparation in the meal kit category.
“Changes in where consumers buy groceries, when they buy, and what they buy will inevitably force changes all the way through the supply chain. Nowhere will these changes be more dramatic than in perishables such as meat,” notes report author and RaboResearch Food & Agribusiness Senior Protein Analyst Don Close. “
The report goes on to note that access to a broader pool of customers independent of geography provides online shopping outlets with the ability to meet a wider variety of customer requests than brick and mortar stores; customers who want branded products or prime graded products can be supplied, as can the conventional shopper who wants the mid-range of choice product. This holds true for customers who want a natural, NHTC, organic, or antibiotic-free product, and even for customers who want grass-fed product. Customer pools are large enough for the supplier to be able to fulfil their niche expectations.
“These niche desires will result in additional demands on cattle quality and production specifications, which will lead to a wider price spread across all classes of cattle, as well as a more detailed premium and discount schedule,” notes Close. “These changes are indicative of a permanent change in the way food reaches the average American consumer—and if the beef industry is to ward off any further decline in beef consumption, it must embrace these changes and make beef an integral part of the consumption experience, regardless of where it is purchased,” notes Close.
A full copy of the report, “Food Fight! Online and Brick & Mortar Battle for Business. How Can Beef Ensure a Seat at the Table?,” is available to Rabobank clients and journalists.
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About RaboResearch Food & Agribusiness
RaboResearch Food & Agribusiness is a global team of more than 90 analysts who monitor and evaluate global market events that affect agriculture worldwide. This international team works to collect key insights into commodity markets; conduct in-depth analysis of the factors that drive sector success (or failure); and examine the megatrends that ultimately influence clients’ business strategy. These analysts are internationally respected experts in sectors from protein to produce, inputs to oilseeds, and their knowledge is shared with Rabobank customers