This is a speech I gave on 24 February 2000 in Houston, Texas at a conference on "Global Beef Industry - Rebuilding Demand":

My perspective is as a retailer, selling meat to the end-customer week after week. But I am a retailer in a country that is more agricultural than any other in Western Europe, one where no-one can fail to be aware of the challenges that face agribusiness.

Additionally, I speak to you as the current president of CIES - The World Food Forum, which is a meeting-place for all involved in the distribution and the production of food.

From these perspectives, my message is very simple: the meat industry worldwide is living in the past.

The past is one of managed markets, with largely captive customers and endlessly rising demand.

The future is one in which the customer calls the shots, and the businesses that succeed will be those who recognise that fact and who act on it.

Over the past 30 years, much has changed in the market environment for meat. But what I believe has not yet changed is the underlying mind-set that drives the meat industry, here in America and around the world. 

The old mind-set is one of managed markets. In recent years we have seen much lip-service paid to the idea of becoming customer-driven. But, if we judge from what actually happens, the old mind-set still remains very much in place. That mind-set needs to change if the meat industry is to realise its potential in this new millennium, and to avoid problems which could be catastrophic.

I meet with customers face-to-face every week, and what I hear suggests that those who drive the world meat industry are in need of a reality check. For much of my lifetime in business, we have seen a relentless increase in customer power. Customers are already the masters in the market-place, and in the coming years their power will increase even more.

Yet it’s clear to me as I listen to customers, that the meat industry is not yet giving its customers what they want. 

Yes, of course it has changed — but the changes are far from enough to meet fully the needs of today's customers. And to the extent that those needs are not being responded to, opportunities are being passed up. Ground is being lost, perhaps for ever.

The future for meat is in not resisting customer power, but in yielding to it and profiting from it.

I'd like to talk about five specific ways in which I believe the meat industry is failing to fully engage the customer. These have to do with nutrition, safety, taste, saving work, and value.

Nutrition

One of the big trends of the past 30 years has been the increasing focus by customers on the health dimension of what they eat. 

Once there was an unquestioning assumption that meat was good for you — and the more the better. It was a sign of affluence to eat more meat: people judged their own prosperity by how many times a week they could put meat on the table.

Now, in most of the Western world, meat — in common with every other foodstuff —has to justify itself in health terms. This has created major trends in consumption, which the meat industry has been sluggish in taking aboard. The trends are very clear. They include preferences for:

less fat;

less red meat;

less meat of any kind as a proportion of the meal; and indeed,

less overall protein intake and less overall calorie intake.

To what extent have these trends been responded to, by the meat industry? 

Not enough, is the short answer.

For instance, meat is still too fat for customers' tastes — especially for customers in certain countries. Why? Because the producer, rather than the customer, remains king: producers are slow to change traditional methods of production to fit changing customer preferences. The aim should be to get ahead of the curve, not to trail always reluctantly behind it.

The difficulty in responding to the customer’s shift from red meat reflects the particular structure of the meat industry. In reality, of course, there is no "meat industry". There are several industries, each one concerned exclusively with the interests of its own particular meat. This structure means that when there is a shift of preference within the overall realm of meat, this can be a survival issue for one industry and a growth opportunity for another.

So it may be that the time has come for a move by producers away from exclusive dependence on one meat product. Perhaps, instead of saying "I am in the beef business" or "I am in the pigmeat business", producers should be moving towards thinking "I am in the meat business". Such an approach would facilitate the shifts in production that changing customer preferences would indicate.

Being market-driven, to my mind, includes a readiness to redefine what business you are in.

The wish for meat to become a smaller proportion of the meal presents a different challenge again. This trend suggests to me that the future for meat lies not in quantity but in quality. The quantity goes down, the quality goes up — and perhaps, as a result, the overall value increases.

Part of the issue here is whether you see meat as a commodity. So long as you do, you will be driven by quantity — and so long as you do, the overall price trend will inevitably be down. But if you can get away from the straitjacket of regarding meat as a commodity, you tend to concentrate not on quantity but on how you can best satisfy the needs of the customer.

This might well result in a much smaller meat industry, turning out less meat but of higher quality, more geared to customer needs and emerging preferences. Because of this focus, a smaller meat industry could actually produce more revenue.

Organically-produced meat is a niche product now, and an expensive one. It is, however, a niche which — if you listen to the market — it would make sense for the meat industry to encourage. Organically-produced meat could well emerge from its niche and become mainstream. That could be an opportunity for the meat industry overall, not a threat.

The real threat to the meat industry lies in the last preference I mentioned — towards less protein, and fewer calories overall. If people effectively eat less, the market inevitably shrinks. But even here there is a bright side: it does not mean that people therefore inevitably spend less.

Safety

is the second way in which the meat industry is failing to listen to customers.

Once, customers took safety for granted — but not any more. From listening to my customers, I know that safety is now paramount with them. This is true all over Europe, where as you know we have had in recent years a number of well-publicised food scares. But I think it is also true in America. And the one lesson we can all learn is that on the safety issue the customers will always win — whether they are right or wrong from a scientific point of view. They will win because they have the power of the purse, and they are now fully determined to use it.

So it is in the vital interest of the meat industry that customers are fully and properly informed of the scientific facts about meat. But this is not to say that customers want propaganda — whether it’s "feel good" advertising campaigns that are short on facts, or of research findings produced by people in the pay of producers. Customers are not fools, and they will not thank you for treating them as such.

What customers need, in the context of food safety, is hard fact and reliable fact.

By hard fact I mean such information as the source of what they are buying. In my company, when the BSE beef crisis struck in Europe, we'd already had a traceability scheme for four years. We could tell customers precisely what farm the meat they were buying had come from, and we did — through signs over the shelves. The trust this built up meant that in the time of crisis, our customers felt confident enough to stick by beef — and eventually, even to increase their buying.

Full traceability is now totally accepted as the way forward in keeping customers informed. There's a lot more that can be done. 

For instance, recent research by the world-renowned Trinity College Dublin, sponsored by my company, means we can now use DNA typing to trace food ingredients right back to their source. This has been commercialised under the name of TraceBack by the company IndentiGen. 

Increasingly, customers expect this kind of sophistication, and once again, it's up to the meat industry to get ahead of the curve.

The other kind of information customers want is reliable scientific fact. 

The meat industry must realise that the only kind of scientist a customer will listen to these days is an independent scientist — not one that works for a producer or who is funded by a producer. Funding of food scientists must be at arms length. If it is not, the price will be that food scientists will no longer be believed. And that can happen, I stress, irrespective of whether what they say is right or not.

Taste

is the third area where the meat industry has failed to keep up with its customers.

People eat in the first place to survive. But soon that changes. With increasingly affluence they eat to enjoy. Taste is now a key satisfaction measure in all food, and I am not sure the meat industry has paid enough attention to this. Producers who are customer-driven must seek to influence the factors that affect taste, all along the way from the field to the table.

The end-product is not meat, it is taste. And the number of ways in which taste can be reduced, or even destroyed, is quite daunting. We are talking about how the meat is produced in the first place, how it is treated along the long road to the customer, how it is processed, how it is stored — and indeed, and by no means least, how it is cooked.

The end product is taste. How much does the meat industry believe that? How much does it act on it? I suggest there is room for more effort.

Saving work for the customer

is an area of massive change, particularly in recent years.

The emerging truth here is that people, for whatever reason, want to spend less time preparing food.

They want food that’s easy to prepare, or food that’s already prepared — either completely or partly.

They are less and less interested in buying food that has to be recycled over several days — they want to buy for one meal at a time.

Also, the changing structure of families means that people are cooking for fewer people. Instead of a norm where one person cooked for maybe five or six, now the tendency in Western societies is for people to cook for just two or three. Very often, a person just cooks for themself.

This adds up to the most dramatic change in the food business for generations. People still want to eat, but they do not want to prepare food. This has profound implications for catering, for retailing, and for food production.

I see the shape of the food business over the next 20 years being determined by this change. People in the food business who are market-driven will make their plans and lay out their strategies in the light of it.

The meat industry, if it truly has its eye on the future, should be doing so too.

Now I come to my fifth and last lesson from the market-place. The issue of

Value

When you see meat as a commodity, you become fixated on price. And very often it is a price that is fixed, not by market forces, but by negotiation at a level far removed from market realities. Too often, this becomes a price determined by what the producer wants to receive rather than what the customer wants to pay.

From what I've said already, it will be obvious I believe the future is with prices determined by customer needs rather than producer wants.

I believe the overall context will be one in which, if producers can't deliver what the customer wants at a price the customer is ready to pay, then some producers will go out of business. In the long run, I cannot see the price of food being sustained by purely political considerations — as it has so often been in the past.

It then becomes important to be aware of what customers value, of what they will pay for.

I mentioned earlier four key considerations for customers. However, don’t think that these are all things people will pay for.

Customers won't pay for food to satisfy their nutrition requirements, neither will they pay for it to conform to their needs on food safety. These matters are paramount concerns for them, certainly. For that very reason, they are make-or-break issues: if they are satisfied, they will consider buying; where they are not satisfied, they will increasingly refuse to buy at all.

So the cost of adapting to nutritional preferences, and the even greater cost of assuring food safety to a level of confidence never before demanded, are not things the meat industry can expect to get a payback for. They are, in a real sense, merely the cost of getting into the competitive arena in the first place. Money you spend on this is not marketing, it's insurance.

On the other hand, people will pay for taste. Remember: meat is not the end-product but taste. People will pay more for more satisfaction, and taste is their measure of satisfaction in food. It is also, increasingly, the basis on which customers make their choice.

So taste is worth pursuing not just as something people will pay for; it has to be pursued, because in food it is the main competitive ground of the future. It's worth remembering, too, that an important aspect of taste satisfaction is novelty. That is a challenge to producers of food and food ingredients.

In addition, people will pay to reduce the work they have to do with the food they buy. As time goes on, people can be expected to pay more and more so they have to do less and less.

So in future people will judge food value on two key factors: the taste satisfaction they get and the amount of work they must do to get that satisfaction. They are looking for maximum taste satisfaction with the least work input. Along both these parameters they will be prepared to spend.

One of the things food producers should realise is that, in the future, people may spend more on food — but less of that spend may come the way of the producer. But if producers play their cards properly, enough of the spend should come their way to make life worthwhile.

Let me sum up:

I believe the future of meat is with the customer. 

I believe that in the past the industry has crippled itself with a restrictive mind-set that saw meat only as a commodity, whose price was to be maintained through political rather than market forces.

If the meat industry doesn't change that mind-set, the future I see for it is one of gradual, consistent decline. 

But if the industry can become truly market-driven, then the future opportunities are very considerable indeed.