Market research firm Nielsen says that the global coronavirus (COVID-19) outbreak could further drive demand consumers' demand for local produce.
Due to the rapid spread of COVID-19, some markets have taken extreme measures to protect their populations by issuing widespread quarantines, halting manufacturing and disrupting supply chains. And even in some markets that haven’t taken such severe measures, demand has been disrupted due to consumer precautions.
"Globally, there is likely to be an impact on product and brand choices being made at the checkout due to these changes. And this impact may break longtime purchase habits irreversibly," Nielsen said. "In recent years, consumers have generally displayed strong preferences for local dairy and fresh produce brands and products versus those coming from further afield.
"Amidst the ongoing COVID-19 crisis, anxieties around origins of products and ingredients are likely to fuel increased demand for even more local sourcing."
Nielsen explained that consumers need to be reassured. More than ever, it said, shoppers want to understand the supply chain, with complete transparency from farm to factory to distribution, and they want details of the measures being taken to assure their safety. Promoting a product’s local origins could help manufacturers and retailers assuage some consumer concerns.
Consumers surveyed in Italy, India, Thailand, Philippines, Egypt, Saudi Arabia, United Arab Emirates, Pakistan and the U.S. all displayed a stronger preference for local products and are likely to further increase their consumption of these products, it said.
Meanwhile, consumers in countries that did not have a strong preference either way could well now tip the demand scales in flavor of local products. These include Hong Kong, Taiwan, Singapore, New Zealand, Belgium, Germany, United Kingdom, Ireland, Israel, Netherlands, Norway, Russia, South Africa, Mexico and Costa Rica.
The opportunity for local brands will lie in fortifying their positioning by providing visibility into their on-the-ground operations, supported by distinct communication around their ‘equally local’ supply status, it said. Global quality assurances, large scale production to meet stock-up demand, verified health claims, industry body certification and track records of satisfying consumer needs could all help multinationals emphasise their origin benefits.
"Driven by necessity or the need for greater transparency, local brands and retailers are optimally placed to alleviate and deliver against consumers’ product sourcing concerns," Nielsen said."Local business will benefit from sharper messaging reinforcing supply chain visibility and focused distribution to reach consumers."
Source: Produce Business UK