California farmers and ranchers should look to emerging consumer food trends for signs of what may eventually drive public policy, and for marketing opportunities for their commodities.
That was the message from Dennis Albiani, vice president of Sacramento-based California Advocates, a legislative and regulatory advocacy firm that has worked on recent agricultural issues. He spoke about consumer attitudes facing farmers and the food business during the California Farm Bureau Federation 2015 Leaders Conference in Sacramento last week.
Citing the opinion of a food professional who tracks these markets, Albiani said specialty foods, including foods marketed as organic and natural, will become 30 percent of the market in 15 years. The rationale behind this thinking, he said, is that young consumers who grow up with these products today will continue the trend into their adulthood.
"Fifteen years from now, they’re going to be our key consumers," he said. "In 15 years, that’s who we’re selling to. And so where are the trends going, and what are their demands? That’s how we need to start thinking: What do they demand?"
One of his jobs, he explained, is to spot where those trends are going and where public policy may be heading as well.
He noted that while California implemented Proposition 2 in January to give egg-laying hens more space in their housing, the animal welfare trend has been going on for 15 to 20 years. The market for specialty eggs—including organic, cage-free, omega-3 and vegetarian-fed—also has been growing for the last three years, regardless of Proposition 2, he said, adding that he does not see either of these trends abating.
He shared an example of how Coca-Cola Co. dealt with changing times and consumers’ evolving tastes. Although the soda company started with just Coca-Cola as its main product, during the years, it introduced Diet Coke, Coke Zero and several other soda varieties.
But with the carbonated-drinks market continuing to shrink, Albiani said the company had to start diversifying its portfolio, first by getting into the juice business by purchasing Minute Maid, and then diversifying further into energy drinks and ready-to-drink coffees. The company also added dairy to its expanding portfolio in recent years by partnering with a dairy cooperative to acquire a stake in a milk protein drink.
"The point is, a company like that is moving the trend," he said. "They’re saying, ‘I want to continue to survive and to grow.’ They have stockholders who are demanding that. They have to keep going into the categories where the consumers are."
In trying to address public policy issues, Albiani said California agriculture needs to be aware of today’s food trends and understand that those trends will start to drive regulatory issues.
Emerging trends, he said, tend to start at the local level—in communities, cities and counties—before they take hold nationally. Some of them start with nongovernmental organizations, such as universities or nonprofit groups that release reports on a variety of subjects. People advocating for issues outlined in the reports typically find support from elected officials or people running for political office who are courting votes, he said. In adopting a position, they are then obligated to deliver on their promise once they become elected or re-elected. So what may have been a small, local issue could gain traction or gain broad adoption affecting a wider population, he added.
He suggested that agricultural organizations do more work with academics, think tanks and organizations to produce their own credible reports to start guiding the trends, including on topics such as water management and turning agricultural byproducts into energy.
Farmers and ranchers should also look for opportunities in emerging trends "to value-add, to reap more return from your commodities and your products, and differentiate yourselves," he said.
(Ching Lee is an assistant editor of Ag Alert. She may be contacted at clee@cfbf.com.)