Competition in food industry essay
The major concerns of the contemporary business competition in the food industry.
What part does food play in the personal and business part of people’s lives? What are the main factors the demand for food depends on? What is the major concern of the food industry?
Basically, as the demand on food is always high the food industry has become a “battle-field” for many companies causing a great competition.
Competition in food industry essay
Table of contents:
2. The major concern of food industry
3. Does healthy food competition exist?
“One of the key questions from our customers is “can you follow our growth?”.
Introduction: Food is an integral part of the human’s life. Men cannot live without consuming nutrients. From the very beginning of the existence of humanity food has been like petrol for human and animal beings. Food is what gives strength and continues life. People have always “benefited” from food and will continue consuming it till their last breath. The contemporary business world revealed that demand always results in the corresponding supply. The demand on food caused the growth of variety of the food products and the growth of the number of companies professionally providing food products for people. It is common knowledge that quantity does not always imply quality. As the industry is very lucrative, because people will buy food even during a hard financial crisis, a lot of companies have introduced eatables of a very low quality but in great amounts and cheap price. These products are often not so useful to eat. It can be even said the general foodstuffs quality has significantly decreased in the recent years, along with the growth of product quality in a number of major food-producing companies. People nowadays are not so ready to pay much money in order to get excellent-quality food that will not damage their health status. It is natural that those companies that are interested in being on market for many years and have constant consumers have to offer the best quality of products. Basically, as the demand on food is always high the food industry has become a “battle-field” for many companies causing a great competition.
2.The major concern of food industry
As it has been mentioned before, on the key issues of the competition in the food industry is the quality of products. The quality of food-products is achieved through the well-coordinated process of cooperation of food retailers, manufacturers, suppliers of ingredients and food makers (Partos, 2005). If any of these links perform a disorganized and unqualified activity it always results in a damaged product and a damaged product is always a guarantor of health problems of the consumer. The price challenge is a vital issue in food industry nowadays because low-quality products sometimes have a high costs, affirming the fact that this is all about profit even by the price of negatively affecting the people’s stomachs. This has caused a lot of problems in the sphere of the relations established between the retailers and the suppliers. The difference of prices makes the suppliers look for new retailers and rather often it influences the quality of the foodstuffs, too. Competition in food industry grows tremendously and this is primarily due to the fact that the pressure within the industry is growing. The customer nowadays has become more demanding and in case of not fulfilling his requirements to the product it will not be claimed and bought by the customer, causing the company a significant profit decrease. Of course there is such a phenomenon as “minute-companies”. Such companies do not last long but are interested in selling one specific type of food product in a rather limited quantity. Such companies are not to be investigated as serious industry competitors but nevertheless sometimes they manage to catch the attention of the customer from his usual product. He may “betray” his favorite brand only once, but if to recall the population of the country the true situation in the industry becomes clear. Contemporary competition is characterized by the fact that companies tend to look for chemical firms that produce only top-quality ingredients for their products in order to build new markets. Having a qualified chemical firm as the supplier of ingredients means that the company is able to face the competition and pressure of not only domestic, but also international customers. The aim of the competing companies is to create a high=quality product at the lowest possible price or in other world to find the “golden middle”. The price is an integral factor in the process of the customer making the choice – he needs to save money to feed the family or to pay a credit but needs to properly feed his family. Well, this dilemma has found its solution in the activity of such companies as Campina that realizes that the majority of customers are motivated to shop at discount stores (Partos, 2005). The real situation is that in the time of general financial instability people do care about the safety of their food, but have no financial opportunities to purchase the healthy products.
3. Does healthy food competition exist?
A traditional nutrition label nowadays has become a guarantee of sufficient demand on it. Customers get used to certain companies that satisfy their basic needs and offer an appropriate price for their foodstuffs. Such “traditional” brands that have proved their “faithfulness” to the customer over the years may be viewed as companies that are sort of out the general competition. If a man has purchased Mrs. Butterworth for his kid’s morning pancakes for the last 10 years, is a new different syrup able to cause him change his habit? This is the issue of the traditional nutrition labels and their quiet competition that is so hard to win. Nevertheless, this does not by any means imply that the stores should have only these traditional labels on the shelves. In order for a healthy food industry competition to exist a fewer food choice is not a productive option. Such situation will simply mean a lost of many potentially qualified brands, which eventually hurt the customer more than anybody else.
The big issue of the regulation dealing with standardized nutrition labels has resulted in an artificial decrease of the food brands. Though the policies are crated to promote healthy food market competition, such a decrease makes the market weaker and “kills” the growing future food giants. The existing market legislature policies do limit its possibilities. According to Moorman before creating policies legislators must: “Think about the differential effects across firms and attempt to write policy that levels the playing field”(Moorman, 2005). The fight for customers has become intense lately. The ideas for new products are kept in strict secrets that are never to be reveals to a competitor. The giant food companies try to affirm themselves through sinking small companies, which sometimes offer a substitution product of the same quality. The companies have to take decisive moves all the time in order to stay on the water surface.
The market of food products, though supposed to be wide in reality is experiencing competition troubles. According to this the term market had obtained several meanings in term of the recent development of the food industry. The term got one additional branch and that is – fast food industry. So, the fast food market consists of various sellers such as Burger King, McDonald’s and Kentucky Fried Chicken and all the customers choosing this type of food. The major fast food restaurants are mentioned here mistakenly. This problem is a vital one due to the fact that people, being very busy have very little time to cook and prefer buying half-finished food products in stores. So the totality of all the real and potential customers is directed to semi-finished foodstuffs. The competition in the sphere of half-finished food products is very strong and is growing with the growth of competition between the fast food restaurants. For instance Wendy’s International, Inc. has announced a decrease of profit due to the sharpening competition in the fast food and therefore in the food industry.
Conclusion:Competition in food industry is harsh indeed. But nevertheless there are certain things to be done in order companies to protect themselves from unfair competitors. This protection is being completely honest with the customer by performing food and nutrition studies of their products. Selling a food product is not just putting it in a bright wrap and waiting until a sleepy customer chooses it from the rest. It is about a lot of actions such as: hiring health and nutrition professionals, having strong public relations specialists. There is no secret in the fact that the competition within the food industry is characterized by discrediting nutritional recommendations given by the health specialists. Well, this is one of the key issues then will work in earning the customers respect and trust. The food industry requires scientific honesty.
Many products are usually not healthy for the consumers and the quality of the product suffers in the struggle to get more sales and therefore lowering the price of the product. Having several constant food industry leaders is not good either, as they start controlling the situation on the market completely. The customers simply seek for a good product at a low affordable price and the companies play on that providing unhealthy product. The status of competition in the food industry is very polysemantic but is characterized by harsh methods and discrimination of small food companies! Such competition is not just a fight for customers – it is a war!