21 September 2001

Consumers not so price-conscious

CONSUMERS are less price sensitive than often believed, with an increasingly lower proportion of household income spent on food.

David Hughes of Imperial College, Wye, told the conference that consumers spend 12% of their income on food, but by 2010 thats expected to fall to 8%.

"As spend declines the relative importance of price declines too. If it were all about price, UK beef would be doomed, as we cannot be the lowest cost producers."

However, there is a growing gap between income haves and have nots and the have nots will continue to want discounted food, added Prof Hughes.

There will be an increasing interest in health and well-being with people more aware of the influence of diet on health. Environment and safety concerns will be important to consumers.

Convenience is also an important factor. "This is a time issue. People are willing to pay someone else to prepare meals." They eat fewer proper meals, preferring snacking and only take 15 minutes at home to prepare a meal.

"The beef industry must develop products to meet these lifestyle needs."

Contradicting that is an increasing interest in food as a status indicator, with premium meals at weekends and the influence of TV chefs. This will see a revival of the importance of taste, with consumers seeking local and nationally branded food, said Prof Hughes.

Red meat consumption is under pressure, but beef has resisted the pressure of BSE.

However, the trend of eating out and take-aways may not be good news. The food service industry wants low cost so favours chicken and often uses imports.

"To secure a future for beef it needs a short, fast, transparent and seamless food chain. Too often, particularly in the beef sector, it is price confrontational and disjointed, " said Prof Hughes. &#42