Food and Product 2020
Our Point of View
23rd August, 2014
Consumer value equation for food has
fundamentally shifted
BENEFITS
COST
Consumer expectations from food has evolved…
2
Taste
Convenience
Price
Safety
Health
Nutrition
Transparency
Sustainability
Source: Industry Interviews; Deloitte Analysis
VALUE
… causing a shift in
the derived value
Copyright © 2014 Deloitte Development LLC. All rights reserved.
GMA members are at the receiving end of substantial
pressure and criticism for not doing enough on food
safety
Consumer Products Industry
Wellness
Business Week | November 01, 2013
Transparency
Center for Food Safety | July 2, 2014
Dye concerns Run Into Mac & Cheese, Other Foods
NPR, May 19, 2014
‘Fed Up’ Links Obesity Epidemic to Sugar, Industry,
Government
Food Safety Magazine | November 7, 2013
150,000 Oregonians Put GE Labeling on the November Ballot
ABC News | March 07, 2012
70 Percent of Ground Beef at Supermarkets Contains
‘Pink Slime’
USA Today | March 08, 2013
FDA Seeks to Revoke GRAS Status for Trans Fats
Grocery chain to label all genetically modified products by 2018
Sustainability
Arkansas News | August, 11 2014
Meat processor drops pork supplier amid animal cruelty
claims
Foodmagazine | May 21, 2014
Thousands rally against use of conflict palm oil
CNBC | January 7, 2014
QSR chain commits to begin buying sustainable beef by 2016
Safety
ABC News | March 07, 2012
E. Coli Outbreak Prompts Nationwide Recall of Nearly 2
Million Pounds of Tainted Beef
Fox News | May 19, 2014
Toxic Jerky treats linked to more than 1,000 dog deaths
Food Production Daily | September 11, 2013
Food recalls cost billions each year
While the industry currently segregates these issues into silos…
3
Source: Factiva News Articles; Deloitte Analysis
Copyright © 2014 Deloitte Development LLC. All rights reserved.
GMA members are at the receiving end of substantial
pressure and criticism for not doing enough on food
safety
Consumer-View
Good for me
Business Week | November 01, 2013
Transparent to me
Center for Food Safety | July 2, 2014
Dye concerns Run Into Mac & Cheese, Other Foods
NPR, May 19, 2014
‘Fed Up’ Links Obesity Epidemic to Sugar, Industry,
Government
Food Safety Magazine | November 7, 2013
FDA Seeks to Revoke GRAS Status for Trans Fats
150,000 Oregonians Put GE Labeling on the November Ballot
ABC News | March 07, 2012
70 Percent of Ground Beef at Supermarkets Contains
‘Pink Slime’
USA Today | March 08, 2013
Grocery chain to label all genetically modified products by 2018
Good for the planet
Safe for me
ABC News | March 07, 2012
Arkansas News | August, 11 2014
Meat processor drops pork supplier amid animal cruelty
claims
Foodmagazine | May 21, 2014
Thousands rally against use of conflict palm oil
CNBC | January 7, 2014
E. Coli Outbreak Prompts Nationwide Recall of Nearly 2
Million Pounds of Tainted Beef
Fox News | May 19, 2014
Toxic Jerky treats linked to more than 1,000 dog deaths
Food Production Daily | September 11, 2013
QSR chain commits to begin buying sustainable beef by 2016
Food recalls cost billions each year
…Consumers perceive these as interrelated issues
4
Source: Factiva News Articles, Deloitte Analysis
Copyright © 2014 Deloitte Development LLC. All rights reserved.
The pressure and criticism is emanating from a
variety of influential avenues with different
agendas…
Federal
State and Local
Legal
Advocacy
Groups
Consumer
Products
Industry
Suppliers
Retailers
Traditional
Media
Social Media
5
Source: Deloitte Analysis
Copyright © 2014 Deloitte Development LLC. All rights reserved.
…However, it is primarily a consumer driven
phenomenon
Federal
State and Local
Legal
Advocacy
Groups
Suppliers
Retailers
Traditional
Media
Social Media
6
Source: Deloitte Analysis
Copyright © 2014 Deloitte Development LLC. All rights reserved.
Consumers have an expanded definition of “safety”
Attributes Included in Food Safety Definition
75%
Social Media Posts on Health & Wellness
and Food Safety (40M)
Safe Packaging
Health & Wellness
86%
66%
Food
Safety
14%
Accurate Labeling
Posts included:
30%+
Natural & Organic

8M on Transparency (20% of total)

2M on Sustainability (5% of total)
Expanded definition of “safety”
7
Source: Deloitte Food Safety Survey, 2014; Deloitte Social Media Study, July 2014 analyzing social media posts
from the U.S. on the topics of “food safety” and “health and wellness” between July 13 to June 14; Deloitte
Analysis
Copyright © 2014 Deloitte Development LLC. All rights reserved.
Consumers are demanding greater transparency
Importance of Transparency
87%
Consider Labeling important in
purchase decision
Key Transparency Topics
49%
GMO
22%
70%
61%
Labeling
Likely to buy brands communicating
commitment to food safety
21%
Wish for more info. on ingredients &
production processes
Food Additives
8%
Others
Demand for greater transparency
8
Source: Deloitte Food Safety Survey, 2014; Deloitte Social Media Study, July 2014 analyzing social media posts
from the U.S. on the topics of “food safety” and “health and wellness” between July 13 to June 14; ; Deloitte
Analysis
Copyright © 2014 Deloitte Development LLC. All rights reserved.
Consumers have lower level of trust in food brands
Attitudes to Brand Trust
Social Posts Sentiment Analysis1
Brands
Across
Industries
90%
10%
64%
Unlikely to purchase a brand
even after 6-12 months of recall
66%
Wiould forgive brands they
trust on food safety
Leading
Beverage
Brands
84%
16%
40%
Trust commitments made in
advertisements and on websites
Leading
Food
Brands
66%
34%
Positive or
Neutral
Negative
Decreased trust, increased skepticism
9
Note: 1. Social posts sentiment analysis for brands across industries is based on a representative sample of brands across retail, financial services, auto, airlines, and technology over a 3 month period between Oct-Dec 2013; Analysis for
beverage brands represents socials posts for a representative sample of beverage brands over a 3 month period between Oct-Dec 2013; Analysis for food companies is based on a representative sample of leading food companies/brands
over a period of 12 months between July 13 and June 14
Source: Deloitte Food Safety Survey, 2014; Deloitte Social Media Study, July 2014 analyzing social media posts from the U.S. on the topics of
Copyright © 2014 Deloitte Development LLC. All rights reserved.
“food safety” and “health and wellness” between July 13 to June 14; Deloitte Analysis
This changing landscape is leading to a “New Normal”
New “normal”
Drivers
• No presumption of safety and wholesomeness
Consumers
• Demand for visibility into production processes, ingredients
• Purchases driven by not only Safety concerns but also Health and
Wellness, and Sustainability
Expanded definition
of “Safety”
Demand for greater
transparency
Information
Exchange
• Public opinion shaped by “social chatter” with limited regard to science,
regulatory or legal requirements
• Negative stories can result in swift and lasting brand damage
• Iconic brands make good targets
Decreased trust,
increased skepticism
• Regulators are more empowered and resourced (e.g. FSMA)
Regulators
• FSMA means whole scale change for much of the industry
• Consumer brands could assume more illness / recall liability
The “New Normal” may require companies and the industry as a whole to
TO…
consider developing a broad consumer centric view
10 Source: Deloitte Analysis
Copyright © 2014 Deloitte Development LLC. All rights reserved.
The “New Normal” provides an opportunity to rethink
approach to Food and Product Safety to create value
Food and Product 2020
Transparency
Wellness
Consumer
Safety
Sustainability
From…
Independent and
Siloed
Cost Centric and
Inefficient
Compliant and
Reactive
Middle Management
Topic
Proactive and
Leading
C-Suite
Issue
To…
Holistic View of
Consumer
Attributes
11 Source: Deloitte Analysis
Growth Centric and
Efficient
Copyright © 2014 Deloitte Development LLC. All rights reserved.
Food & Product Safety in Your Organization: Key
Questions to Consider
Is it a consumer centric function or just a technical
product quality function?
Is it considered a business and shareholder value driver
or just a necessary cost?
Are you ahead of the consumers and regulators or just
meeting compliance requirements?
Is the responsibility and ownership in the C-suite or is it
relegated to mid-management?
12
Copyright © 2014 Deloitte Development LLC. All rights reserved.
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