Build Trust to Build Sales Volume

Build Trust to Build Sales Volume

Just released data indicates that processed and pre-packaged foods sales are going down. Maggi recall impact is considered as one of the major factors. If this is so, it is a serious message for food companies. This indicates that consumers will trust authorities’ verdict more than the brand. I Personally, I feel there is more than one reason for the downfall in sales. Which I will discuss later in this article.

Let me start with what industry leaders are saying in various forums. The major factor cited for decline of the processed food sales is negative publicity about processed foods due to Maggi recall incidence. This raises a fundamental question. Why companies are not able to build the trust between them and consumers? Why consumers still doubt the product integrity?  What is the trust level between consumers and food companies? Why the trust level is so low that by one incidence whole industry feel the ripple effect. It is the basic question which industry leaders have to think and introspect.

In my view, food industries in India have not addressed the fundamental issue of food business i.e. trust.  Think about it. What was the impact of sales on Amul after Maggi incidence? Both are powerful brands, but are they equally trustworthy?

Ask your neighbors, friend and well-wishers.  I asked this question to many consumers in market, the answer was clearly in favour of home grown cooperative organization. This raises a fundamental issue. Why large brands are not able to develop trust among the consumers. Why consumers trust one brand more than the other?

It is also important to note that consumers are becoming more and more sensitive towards food safety and health impact from what they are eating. Issue of synthetic milk, adulteration food items like spices, edible oil, sweets, antibiotic residues in milk, meat, etc., wrong labeling and misleading claims and duplicate products in markets are all shaking confidence of common man about packaging foods. Consumers are openly discussing about quality of food available in market. Most of the new products are just cosmetic changes in the form of color and flavor of earlier variants. They are not addressing the changing needs of consumers’.

On the one hand food industry is demanding more and more additives to be permitted under food laws, whereas on the other hand consumers are looking for more and more natural food for consumption. This itself indicates that there is a serious disconnect between consumer expectation from processed foods and the thought process of food industry leaders.

It is not that food industry is not aware about consumers’ expectation. Food Companies are very much aware but they use all creative ways and means to hide the facts from the label which are not liked by the consumers. For example, companies write everything except the name of chemicals used in foods. Sometimes, creative ways are used to gain the consumer confidence about the product. In fact, the law itself allows companies to hide the facts.  When incidences like Maggi happen, consumers take precautionary steps and starts avoiding pre-packaged foods as much as possible. Ask any consumers, whether he will prefer pre-packaged food or freshly made, you will get the answer about consumers’ preference.

Social media is playing very important role in consumer education. Any negative story about any brand is flashed across millions of consumers even before company can react to the development. This shakes the confidence of consumers towards processed foods because no one wants to put her or his health or health of the family at risk.

Once the consumer stops eating a particular brand or product he moves to the alternate option. This psychological shift will be very difficult to regain. Meanwhile competitors also play their role in encroaching on the tainted brand territory and do everything possible to attract consumers towards their products or brands. In case of Maggi no other noodles company and no industry association came in support of Maggi to convince consumers’. In fact many were trying to take full benefit from this crisis, otherwise why there was no action on behalf associations with consumer groups  to gain the consumer confidence.

It means when there is any food safety issue everyone plays the role to get maximum benefit from the crisis. Unfortunately, no one addressed the consumers concern about food safety and no one is keen to assure the consumers’ about what industry is doing to ensure food safety and adulteration issues. This further shakes the consumer confidence and she or he moves away from products which he cannot trust.

Trust is the biggest asset in food and health business. I feel, food industry and industry associations must work with single focus on how to win the trust of consumers’. This cannot be done just by advertisements. It should be based on action against companies supplying substandard and adulterated products. Industry associations must relook into their functioning and also work to debar the companies which are violating food laws and not delivering safe food to consumers.  Will associations do it? Why they will not do it is also an important question? Are consumers not important for them?

Other factors for decline in sales are food inflation. When essential commodities are going beyond the reach of common man; it will be difficult for common man to spend on non-essential processed food items. What is the role of industry associations in controlling food inflation? Unless food inflation is under check, no industrial activity can flourish.

 

It is high time industry should focus on trust building exercise to win back the consumers. Industry needs consumers’ for its own survival. Consumers have alternate options but industries do not have any. They have to come back to consumers. Trust, not the government policies, is the only linkage which can improve the sales of processed foods.

Think about it.

Disclaimer: Views are personal.