How the demand for personalisation is changing manufacturers' business models

By Niamh Michail

- Last updated on GMT

© GettyImages/Merlas
© GettyImages/Merlas
As consumers increasingly want personal experiences and craft products, food and drink manufacturers are expanding their business models with pop-up stores, cafes and joint food service ventures, says Euromonitor.

“As post-global financial crisis consumers become more judicious about when and where they indulge in less healthy activities, indulgent items are forced to become more interesting, tied to craft or novelty," ​said head of packaged food research at market research company Euromonitor International Pinar Hosafci.

This is in part due to the fall in “everyday indulgences​” such as carbonated soft drinks, chocolate or cigarettes, Hosafci said.

The demand for complexity, craft and novelty is growing everywhere, and consumers are willing to pay a premium for high quality “enhanced functionality​”  or a personalised variant of their favourite food items.

Alternative business models

“With that, we see a surge in alternate business models, in particular subscription models and meal kits, which provide tailored and personalised solutions for consumers who want to indulge and experience without the hassle of going through the shop.

"In many cases, such customised forms of delivery also help consumers to avoid intolerances and allergies associated with consumption of specific ingredients.”

Chocolate manufacturer Lindt has significantly bolstered its store portfolio over the past five years. Its stores now account for 10% of its revenue and it has set itself the aim of becoming the world’s largest premium chocolate retailer by 2020.

Food service

The explosion of food sold through food service and branded stores, which is outpacing growth in mass channels, is also making manufacturers take note.

According to Hosafci, this is because consumers’ emphasis is shifting from possession to experience.

The seeking experience trend is manifesting itself in various forms in the food industry, including the value placed on the dine-in experience, increased demand for global cuisines and unique shopping spaces, authentic recipe-based cooking and sharing packs,” ​she said.

Greek yoghurt start-up-turned-giant Chobani first opened a yoghurt bar in New York back in 2012 and has followed up with a second café in Target stores. The café sells sandwiches, soups and desserts made with natural ingredients. “It is a test kitchen for Chobani while representing an innovation destination for consumers,” ​Hosafci told FoodNavigator.

Meanwhile, Danish dairy manufacturer Arla, which has been supplying McDonald’s with organic milk since 2007 for use in its drinks, expanded its partnership in August 2017 and launched a line of co-branded milk bottles as part of McDonald’s Happy Meals menu.

Unilever, Nestlé and Ferrero also have cafés and pop-up stores where visitors can design their own food, which helps build brand loyalty through experience.

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