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The Customer Is Always Right (Or, At Least They Are The Ones Who Pay You)

There is an old adage in business that “the customer is always right.” If you have ever worked in retail foodservice, or retail anything, you know that consumer tastes have evolved at a rapid pace over the last decade, and sometimes figuring out where the consumer is at is quite difficult. They are discovering preferences they didn’t know they had. They are acutely aware of the supply chain, but maybe not its complexity. Despite the paradox of choice making consumers unhappy and less fulfilled in some cases, typical grocery stores now have around 50,000 SKUs i.e. choices, with many individual categories being saturated with too many choices as well.

Food consumers are not always rational. They don’t always have the time to fully understand the science behind product formulations or the realities of sourcing high quality ingredients in the supply chain. Brands are meant to communicate with consumers in an emotional way and are meant to help tell these stories in a concise, relatable way so the consumer can make an informed decision.

Take milk as an example. Dairy is big in our state of Wisconsin, but cow’s milk has been losing market share to plant-based milks. This is in part because plant-based milk companies and brands are meeting a growing consumer demand for more choices on different occasions, consumer perceptions about the environmental consequences of animal agriculture and consumers seeking more innovation in flavors, packaging, etc. You could ask whether the consumer is “justified” or not in their rationale for pursuing plant-based milk alternatives, but that is not really a business question. The business questions in this case are “How can we speak clearly and concisely to our target consumer so they understand our products’ advantages? What are the ways we can innovate to provide products that meet a real or perceived consumer need?”

Finding out what resonates with the consumer when developing/launching products necessitates high quality market research around what categories are accelerating or declining, what claims are resonating with consumers, how packaging is driving sales and what new product launches say about innovation in the category in question. If you don’t have the budget for market research data from groups like Mintel or SPINS, you can gather feedback about products by interacting with target consumers through farmers markets, demos at grocery stores and shop alongs.

Food businesses should align their products and branding with their target consumers and should use market research to understand what the marketplace is asking for. Acquiring and keeping customers is what drives successful businesses and customers’ preferences must be met in order to have a financially viable business. Customers may not always seem to make the “right” choices from every food business owner’s perspective. However, at the end of the day, customers are how you get paid.

And now, our roundup of the best food and beverage finance news, events and resources from around the web…

Food and Beverage Business Models

Business Model Insights

Raising Capital

Raising Capital

Grocery Store Shopping

CPG/National Brands

Grocery Store Produce Section

Market Trends

 Regenerative Agriculture

Farming and AgTech

Mergers and Acquisitions



Industry Events

Categories: Insights Newsletter