Costs of climate threat are growing

A new study released by the Rockefeller Foundation reports $900 billion annually in added costs to the U.S. food system from agriculture derived greenhouse gas (GHG) and biodiversity losses as a result of land use transformation, animal grazing impacts and nitrogen pollution.

• One major source of environmental impact is the 10 billion farm animals we harvest each year for food and the related damage from methane, water depletion and soil erosion from crops raised to feed livestock.

The U.S. has the most affordable, abundant food supply on earth requiring only about 5% of disposable income from families. According to the Rockefeller report, Americans spend approximately $1.1 trillion on food each year. However, that figure doesn’t take into account the unintended consequences of a food system that in many respects works against planet health and also the wellbeing of people when you consider the accelerated growth rates in obesity, diabetes and heart disease.

Time for a reality check as we talk about the future of food

Our current food system is designed to deliver three things consistently:

• Volume of food
• Safety from food-borne illnesses
• Inexpensive calories

However, we need a food system that is also aligned to help protect the environment and support human health.

An encouraging promise about the future of food is now emerging as vast sums of investment capital race to support the development of new food technologies. From 2015 to 2020 more than $4 billion has been invested in alt. protein technologies. These new food solutions may help reduce climate threat while offering a healthier nutritional profile for cleaner proteins in center-of-plate dishes.

How we eat, what we eat and where food comes is changing

Advancements in bioengineering have authored a tsunami of new food tech businesses pioneering ways to create foods that are not dependent on legacy ingredient supply chains. What’s coming is more food made from cultures, microbes and fermentation technologies.

Will consumers suddenly stop eating animal meat? Not likely. That said will substantial transfers of market share move to these new products not linked to a cow, lamb, pig or chicken? Highly likely; assuming the eating experience and taste hit the mark as an analog to the conventional version. Equally so for non-fish seafood.

Plant-based offers a hint at the transformation

According to Statista, total sales of plant-based meat and dairy products in 2020 reached an astounding $7 billion; of which ‘dairy-free dairy’ led the pack at $2.5 billion in sales of soy, almond, pea, rice and oat milks. An entire generation of milk users is growing up with a different definition of what milk is and how it tastes.

Plant-based meat, the fastest growing segment, hit stride at $1.4 billion in sales volume. That’s a whopping 45.3% jump over 2019 sales results. With new plant-based chicken nugget brands now simultaneously launching in food service channels, the likelihood of more trial and retail movement for non-meat meats is nearly a foregone conclusion. Equally impressive is the surge in plant-based cheese products, up 42.5% over 2019 to $270 million in sales.

• The plant-based meat takeover has been quick. The trends suggest a potentially rapid uptake on the proposition for foods perceived to be healthier (less saturated fat than animal meat) and less taxing on the environment.

Industrial agriculture and meat production produce 24% of total greenhouse gases, the second leading contributor to climate threat behind fossil fuels. Meat production alone accounts for 65%of the world’s nitrous oxide, a gas with a global-warming impact 296 times greater per pound than carbon dioxide. What’s more, total emissions from agriculture are forecasted to increase 80% by 2050due to a significant growth in demand for meat and dairy products.

The development of new food solutions is really a higher-stakes proposition. Climate friendlier food tech may indeed help tamp down the surge in global warming that spawns wildfires, droughts, superstorms and other weather anomalies.  An unprecedented 115-degree heat wave in the Pacific Northwest came dangerously close to upending the regions’ agricultural eco-system.

Eating our way into climate chaos?

What happens when consumers begin to see there’s a relationship between food choices and climate impacts? Consumer attitudes and behaviors have shifted in recent years to focus on issues and more values-based considerations. Purchase behavior has already swung from a historic focus on taste, price and convenience to new concerns about transparency and visibility to the supply chain alongside the number one consumer issue, health and wellness.

The food industry will be obligated to pay attention to these transformational changes and look more fully at climate readiness, sustainability policies and commitments.

Questions food and beverage companies must address:

• What is the true carbon footprint of products, taking into consideration all aspects of supply chain and manufacturing?

• How does this trickle down to hidden costs in bio-diversity impacts such as land use disruption, over-consumption of water resources (it takes 1,500 gallons of water to produce one 16 oz. steak) and harmful farming practices that destroy the ability of cropland to sequester carbon in the soil.

• How will companies verify and validate their sustainability policies and commitments in a transparent and trustworthy way?

• What aspects of sustainability performance and outcomes do core customers care about the most?

• How should sustainability bona fides best be conveyed to a company’s key audiences and stakeholders?

For our part, Emergent sees a food culture transformation on the horizon that will change what consumers believe about where food should come from, how it is made and what they should buy.

To help companies better assess and explore the right path to sustainable practices and climate readiness, we have created the Brand Sustainability Solution report as a guide to the key issues and direction on strategies to solve.

You can download your complimentary copy here.

To secure a snapshot of where your climate sustainability readiness stands today, take the five-minute free Brand Sustainability Readiness survey here.

Looking for more food for thought? Subscribe to the Emerging Trends Report.

How to cultivate and deploy genuine word of mouth

Consumer trust in what your company says about your brands has been in decline for more than a decade. Sadly, customers just don’t believe you. Thus, why buying awareness in paid media channels is less useful and effective now. So, what then is powerful and persuasive? Other people.

The holy grail of marketing is word-of-mouth (WOM). For the very reason it comes embedded with trust and belief from an independent source people respect. According to Nielsen, 83 percent of Americans trust the recommendations of friends and family. Testimonials from other users far outweighs any other form of brand outreach on engagement metrics and ability to credibly validate what brands want people to believe about the merits of their products and services.

Is this a happy accident? Is talk value a gifted benefit only to some naturally-alluring brands in high involvement categories – the equivalent of being born with a silver spoon and inherited buzz-worthiness? Can it be managed and created? Is it unattainable for low involvement, more commodity-type businesses like say baking flour?

• It can be achieved.
• It requires intention and careful strategic development.
• It is not the outcome of easily replicated table stake strengths such as better taste, higher quality ingredients or great service.
• Proof: check out King Arthur Flour’s incredible dedication to feeding a community of people hooked on baking.

Why is WOM so elusive for most businesses?

Entirely too much similarity exists between brands in many food and beverage categories. Marketing strategies that essentially mimic competitors are all too common due to low perceived risk. But then rewards are low, too. Leverage and advantage will go to those businesses that organically create talk value because they are truly distinctive and remarkable. In absence of this ability to standout brands are forced to compete for attention – usually on the basis of sheer tonnage in paid media spend.

Why do we find ourselves here?

Buying awareness through paid media is a hallmark of traditional marketing thinking that’s been around for more than a generation. It is expensive, increasingly less effective, yet easier to understand and implement. It’s the path of least resistance. The art of talking to people is an entirely new skill that while less costly is more complex and nuanced. It bears mentioning here, paid influencer campaigns are not word of mouth creators, they are another form of purchased awareness from the ‘talking at’ media toolbox.

If you agree that word of mouth is the most effective platform available to brands in this age of fractured media channels, short attention spans – and a paucity of trust in what brands want consumers to believe, then how do you secure the authentic marketing horsepower the tellable tale offers?

More specifically what constitutes remarkable-ness and word-of-mouth generating exceptionalism? The best answer begins with peeling the onion on what won’t generate this kind of serial advocacy.

• Better ingredients – marginal distinctions, easily copied
• Better taste – subjective and one reformulation away from disappearing
• Sustainability standards – more common card now played by many brands
• Philanthropy – good to do but increasingly commonplace and thus not distinctive
• Operational strengths – efficient attentive service, clean and well-organized stores already a must
• Premiumization of legacy categories – manifested by many who now follow the artisanal path of product creation
• Local sourcing – advances in distribution infrastructure are making this easier to do
• The outcome of stunts – yes, a diluted form of word of mouth can be created but the shelf life isn’t sustainable past a few days

WOM generation is hard to do, but it can be done with impact

Hope is not a strategy. You have to work hard to earn recommendations. It takes planning and design to build a talk-worthy experience. It is not a happy accident. WOM can be cultivated by building and embedding the remarkable and unexpected into your operations and product. People are conditioned to talk about the extraordinary and exceptional and ignore everything else. Having said that, improved customer experience is a common strategy and not a differentiator.

We should note here: being better is not as powerful as being different. Remarkable means worthy of a remark and that is uncommon.

The enemy of WOM is incrementalism and sameness.

Defining the path to word-of-mouth excellence

Here’s the question to address in planning: what can we do differently that will be unexpected, remarkable and endear our brand to our core customers?

• It must be available, accessible to every customer, every day
• It is really about how your business DOES business
• It must be easy to understand and share-able
• It must serve your objective to build a community of passionate advocates

When I first purchased a Dyson vacuum years ago, I was stunned by its design and departure from what was expected in the operation and features of a floor cleaner. It worked as promised. It did not lose suction. I could see the outcomes of my labor in a clear basket. No messy bag to install. Its design was modern and sleek. I talked about it. The WOM created by Dyson was embedded in the design and story underneath its creation.

The company violated accepted rules in the floorcare category. It changed the game. Dyson charged a higher price and people paid it. The product invention story created legend around the inventor.

Now, the mimicking is in full swing and the concept has lost its edge. Many, many billions of dollars in sales later. Evidence that the fundamentals of disruption and remarkable-ness must be revisited from time to time as the marketplace observes success and then works to replicate it over time, eroding the original uniqueness.

In their delightful book on the topic of WOM titled “Talk Triggers” authors Jay Baer and Daniel Lemin cite the seemingly mundane move by Five Guys to pile on the extra fries in every bag of burgers their customers’ order. It’s available to everyone, everyday. No one else in the burger world does it, and it is a tellable tale of generosity. Scans of social media show evidence of this simple benefit showing up repeatedly as a consistent differentiator. They don’t spend big money on advertising because they don’t have to.

In every case of strong WOM strategy we find creativity, boldness, departure from the norm, and rule-breaking around category conventions. When you decide to be remarkable and thus worthy of a remark, day in and day out, you automatically know your brand isn’t going to present itself like all the other adjacent businesses in the competitive set. It cannot be all things to all people.

Baer’s story about Holiday World, the family-owned theme park in Santa Claus, Indiana that made the “crazy” decision to provide all soft drinks to their visitors free of charge, shows the power of audacity and courage. Their social media channels repeat the free drinks benefit, attracting crowds with an unusual idea that continues to pay for itself over and over.

Do the unexpected?

Endear your brand to customers?

Create a tell-able tale?

Why bother? For the very reason the world has changed and the marketing game-plan needs to change with it. When consumers believe the stories of their peers first over your carefully crafted outreach, that right there is reason enough to develop an intentionally designed WOM solution.

Should this idea strike a chord, and you believe some fresh thinking might help shape this strategy for your brand, use this link to start a conversation. It could create benefits and advantages that last for years, while reducing your dependence and spending on old-school ad tactics.

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