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The Ultimate Driver for Food & Beverage Business Success
The food and beverage (F&B) industry is one of the most diverse, competitive, and innovative industries in the world. Any business that produces and/or distributes edible or drinkable goods is part of the F&B club. The industry as a whole is typically ahead of others in terms of consumer trends, most notably environmentalism. 55% of F&B business leaders surveyed by Forbes reported increased investments in environmental sustainability processes and procedures.
Their innovative nature is in part driven by necessity as today’s customers are hyper-connected to the internet and growing more aware of what the brands they purchase from say and do. This awareness means the industry must be aligned with the wants and needs of its consumers through high-quality F&B market research. F&B market research involves several methods like taste tests, product sampling, surveys, and more.
These research methods aim to collect honest feedback about a brand’s products that will, in turn, allow them to evaluate how their product will be received by their target demographic or how they can improve an existing product. Let’s discover why market research is necessary for F&B brands to keep up with consumer trends and the common types of research for this industry.
The Benefits Of Market Research For F&B
Market research is essential for just about any industry out there; however, for F&B, it’s even more crucial. This industry moves quickly, and brands must be able to pivot on a moment’s notice to gain and retain their market share. For example, Coca-Cola discovered an unmet consumer need thanks to market data. Before conducting market research, Coca-Cola offered caffeine-free diet coke in less than 1% of its dispensers in the US.
After data from its freestyle machines (shown below) showed caffeine-free diet coke was in fact in their top five dispensed drinks during the afternoon, they were able to make changes. “Before Freestyle, Caffeine-Free Diet Coke was available in less than 1% of our dispensers in the U.S.,” Jennifer Mann, VP-general manager of Coke Freestyle, said. “Now with Freestyle, it’s available in every dispenser. So there was a huge unmet demand we were able to fill.”
Data analytics in the food and beverage industry help brands like Coca-Cola uncover patterns/trends, manage inventory, personalize experiences, control quality, and enhance offerings.
Patterns & Trends
Consumption habits have dramatically shifted due to the COVID-10 pandemic. With more consumers at home than ever before, the need for grocery items has sky-rocketed. With market research, F&B brands can track consumption patterns and mitigate the risk of over or under-stocking. This data helps reduce monetary losses and keeps customers happy.
Additionally, market research helps F&B brands discover consumer trends, like the demand for sustainable products, low-calorie products, caffeine-free products (In Coca-Cola’s case), or products made from recyclable materials, to name a few.
Market research can also allow F&B brands to personalize the customer experience, specifically in the restaurant industry. Eateries can tailor the guest experience based on previous visits and gain insights into their preferences with data tracking. Additionally, data allows restaurants to send out targeted messaging based on spending habits or frequently purchased items.
F&B consumers expect reliable quality and taste. When customers order a cheeseburger, for example, they expect the bun to be toasted, the patty to be perfectly grilled, the cheese to be fully melted, and the topping to be fresh and crisp. By surveying customers, brands can identify problem areas and work to improve them.
Another way that market research can drive success for F&B brands is by helping them understand how well various items on the menu perform or how well certain flavors sell in-store. For example, suppose apple-cranberry juice isn’t selling well in the midwest. In that case, researchers can conduct further research to understand why and offer something mid-western customers prefer, like plain apple juice.
Types Of Market Research For F&B
There are many reasons for conducting market research in the F&B space, from increasing customer satisfaction to improving operational efficiencies. Here are some common examples of market research types for the F&B sector.
Customer experience is a top concern for restaurants, fast food chains, and grocery stores. To understand the customer experience from start to finish, F&B brands can use journey mapping. With journey mapping, all touchpoints from awareness, interest, consideration, intent, evaluation, purchase, and beyond are researched to uncover bottlenecks, pain points, or missed opportunities.
Production research allows F&B brands to understand market demand and consumer usage. Market research will enable brands to determine the size and nature of sales opportunities in key geographical markets and fine-tune their supply chain strategy.
Production research can also help companies understand the usage of their products, including volume, brand preferences, and decision drivers, to identify further opportunities to add value.
Ingredients are increasing in importance by the day for both consumers and companies. While consumers demand more natural and sustainable ingredients, brands grapple with how to meet that need economically. Market research can assist brands with assessing the appeal of a new ingredient, understanding the customer perceptions of their ingredients versus the competition, and deciphering key improvement areas and opportunities to add value.
Lastly, distribution research is vital for F&B brands that want to understand where and how their products should be distributed. Distribution research can answer questions like, “Which products should we sell in vending machines?” or “Are we selling this product better online or in-store?”
In A Nutshell
Market research is crucial for F&B brands to understand patterns/trends, personalize experiences, control quality, and enhance offerings. Market researchers often conduct experience, production, ingredient, and distribution research to add value and gain and retain market share.
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