Big brand blues? Surviving today requires a personalized, regional approach, says Rabobank

Rabobank recently published a piece on the deglobalization of food​ where Cyrille Filott, the global strategist for consumer foods, discussed the shift towards regional marketing and structure among big food firms – a strategy that aligned well with current consumer needs and market trends.

“In future, large food companies will march less and less to the beat of overarching formulas, big brands, and global marketing campaigns, instead letting regional structures and ultimately consumers themselves pick the tune,”​ he wrote.

It's an evolution, not a revolution​

Speaking to FoodNavigator-LATAM about the implications this might have on manufacturers working in Latin America, Filott said: “If I was a new company entering the Latin American market, I would definitely go for the local approach.”​

The same applied for any major food firm with established, global brands in the market, he said.

“Whereas in the past, it was fantastic to have a global brand with a large marketing organization with a global plan to support that brand, perhaps with regional emphasis here and there, that is no longer required.”​

“...The question I put out there is: does it actually make sense to have these big global brands? And perhaps it still does from a marketing point of view, but given that people are much more interested in something more attuned to their local circumstances that's what companies are now playing into.”​

Whilst regional focus was nothing new for the sector, Filott said it would continue at a much faster rate in the coming years and had to.

“I don't think it's a revolution, it's an evolution. It's just no-one is really paying attention to it but it's something that will continue on an accelerated basis.​

“... For global brands, they will still be around, with much more local emphasis, but the question is: what will happen to the others? Will companies try to make themselves a truly global, iconic brand?”​

My food, your food, our food...​

The answer was: probably not, Filott said. It was more about establishing a strong, regional hold with suitable products marketed in a targeted way, he said.

“Personalization is a huge topic in food... It's about coming up with something that touches you as a person and how do you do that best? In the end, it needs to be executed on a local level.”​

Whilst true personalization was a few decades off, he said segmented personalization around things like dietary needs and allergies was already happening. And much of it was being driven by increased use of internet, apps and e-commerce as well as more communication around food on blogs, forums and social media.

“For food companies, it's very difficult to influence that consumer, especially through old-fashioned global advertising campaigns – that doesn't work anymore. It needs to be much more targeted to a group of people with common interests. Some of these interests may be global, sports nutrition for example, but many are much more local.”​

Ironically, what presented challenges also gave food firms opportunity – the internet, Filott said.

“The internet is an enabler to touch a person or group of people much more locally; it's a demand and a supply driver.”​

Can't beat them? Join them​

For larger firms, Filott said it was primarily about portfolio management, something many were doing and had been doing for years but also about investing in innovation, and not just within company walls.

“Many larger food companies have established venture capital funds that invest in start-ups just to see what's going on in the market and help start-ups get into certain critical scale and markets. That's a very important trend. Most large food companies have established these to remain in touch with innovation, and in large companies that's not always easy to do. So, why not put some money out and see in this way if you can find certain interesting companies that can help you?”​

One interesting example, he said, was Campbell Soup's venture capital investment in nutrition technology firm Habit back in 2016. The tech firm, founded by Plum Organics co-founder Neil Grimmer, had developed a method to use data from at-home test kits to make personalized food recommendations tailored to an individual's unique DNA.

“Habit doesn't necessarily fit with what Campbell does now but it's technology that could be important,”​ Filott said.

The large majority of venture investments from food companies remained in the food or agriculture sector but more and more focus was on how to personalize an offering, he said.

“There are many companies working around life solutions like personal recipes, monitoring, Fitbits, personal quantifying devices. At one point, that will be connected to the intake of what we're eating. Trying to give you personalized coaching is something major companies are thinking about but it hasn't come together.​

“That's separate to the issue of globalization but in the end, the direction is clear: it's about touching the person and not necessarily large groups or countries,” ​he said.