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Food & Drink marketing: how is the downturn affecting the industry?

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By The Drum Team | Editorial

February 7, 2012 | 3 min read

Food and drink manufacturers introduced over 8500 new products during 2011 – around 500 more than in 2010 – indicating that despite bleak economic forecasts, innovation in the sector remains strong. However, what challenges has the economic downturn in retail posed to the sector? The Drum caught up with a selection of agencies operating in the sector to gain some insight.

HOW IS THE DOWNTURN IN RETAIL AFFECTING FOOD AND DRINK MARKETING?
Mike Phillipson, managing director, Big CommunicationsThe 11 million or so ‘Have-Not’ households have pretty much had enough of retail brands trying to pull the wool over their eyes. In 2012, food and drink marketing will need to cut the superfluous and the superficial and tie in more with this ‘had-enough’ thinking. In addition, the consumer has become more ‘savvy’ when it comes to finding the best deals, which has resulted in consumers shopping within a wider repertoire of stores to ensure they maximise their budget. One result of this will be the emergence of dynamic pricing, with more locally broadcast, time-sensitive deals.
Tony Casson, creative director, Sphere DesignOverall it’s not affecting the market, however the markets are polarising. Consumers are trading up and treating themselves with home cooking or trading down and being more price-conscious. Craig Mackinlay, founder, Breeze CreativeThe downturn in retail means that producers are having to work harder than ever on communicating their own particular brand values, whether that is in the VFM or luxury sectors. Consumers as a whole have reassessed their spending patterns and even in the luxury sector their purchasing decisions take in the whole 'What's on offer' scenario with each brand.
WHAT ARE THE BIGGEST CHALLENGES FACING AGENCIES IN THE FOOD AND DRINK SECTOR?Tony Casson, creative director, Sphere Design2012 sees Sphere celebrate its 40th year, so we have seen many changes. I think the biggest challenge is to continue to innovate and appeal to ever more savvy consumers. Personally, I will be looking back at how simple design works best in packaging. Nostalgia has a big part to play in the emotive purchase. 

The other challenge is building a relationship with a client that allows the nurture of the brand, without the margins being constantly squeezed.
Mark Stringer, managing director, Ahoy CreativeI can’t speak for the larger agencies that are working with huge established brands but I’m sure they are up against the same things we are. The ever growing acceptance and consumption of technology by consumers means we have to sometimes fly by the seat of our pants. Trying to keep on top of all the technology at our fingertips and having the balls to trial and test things. 

A lot of agencies are paving the way and doing things for the first time with dramatically varied results. Mistakes will be made but there will be approaches to digital marketing that become standardised based on past success.

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