The price of raw materials is high with low consumer switching cost. However, the increasing demand for healthy and organic food is creating openings for smaller competitors to enter and hide from the pricing
However it doesn’t have a large impact on the food industry as such as consumers need to purchase food in order to survive. Although they may decrease quantity of foods they choose to buy, they are still willing to purchase basic foods that will sustain their health. Consumers are more likely during an economic downfall to spend their money on foods they require rather than want. The company as a result obtains an advantage from its competitors as they produce long lasting food options, which allows consumer’s to save during tough times. This highlights an opportunity for the company as they produce healthier and simple food varieties which many customers desire.
Another facet to the drive of the food marketing business is competition. The food industry is a war zone made up of so many big names we are familiar with: Kellogg, Post, Pepsico, Coca-Cola, Campbell, to name a few. It is of utmost importance to these companies that they outperform and always stay a step ahead of their rivals. For example, when PepsiCo announced a program in 2010 to cut salt in their products by an average of 25% and promote less sugary drinks, Coca-Cola planned to take full advantage of what they viewed was a foolish decision by PepsiCo by pushing their own marketing even further. These “food giants” are so focused on moving forward and beating out competition they often overlook the impact their products have on the
The history of grocery stores in the United States is complex and full of competition and innovations as consumers' ever-changing tastes dictate who rises to the top. Some grocers compete on the basis of cost leadership, like Walmart, who’s slogan is “Everyday Low Prices”. Other grocers seek a blue ocean strategy by serving rural food deserts like Dollar General. Trader Joe’s, however, utilizes a unique differentiation strategy via distinctive product offerings and exceptional customer experience. Founded in California but expanded nationwide, it is the perfect middle ground for many shoppers between limited SKU boutique organic grocers and a typical American mega-grocery chain.
The secrets of Trader Joe’s Have you ever thought about what you eat every day, and how the foods were taken care of and raised? The people who care what you eat daily are likely to go to the Organic supermarket, and The Trader Joe’s is one of those organic supermarkets. To sell the items as much as possible, the Trader Joe’s always try to encourage people to stay longer. By staying at the store longer, customers take a look at their products and buy them.
Level of Rivalry: High The level of competition is intense in the grocery industry. The organic foods niche grows at a rapid pace attracting a lot of competition to this industry. Stiff competition is provided by giants like Trader Joe and Kruger who are entering the organic market which was once a specialty of Whole Foods. Over the past year Whole Foods slashed prices
• Increased competition o More stores offering natural and organic foods a lot cheaper o There is also the option to get natural and organic foods online • Whole Food store prices are too high o Customers go to competitors that sell the same products for cheaper o The company is planning to cut 1,500 jobs or 1.6% of the workforce, just added 9,000 jobs last year, to make cuts in the stores and company. • Cannibalization of stores o Sales growth at stores open at least a year is 1.3% o Customers are being brought to the new stores from current, better established chains o The old stores are not getting quality maintenance and have poor customer service • Brand equity being demolished with the opening of a new chain, 365 by Whole Foods Market, to sell
The demand in the food caused the growth in the food products and in the number of companies providing food product for people. It’s common knowledge that quantity does not always imply quality. As the industry, they always make money because people will buy food, even during a hard major money-based problem. On this day, people just care about the price and the company’s
PROBLEM IDENTIFICATION Whole Foods Market was created as a grocery store to serve as providing healthier options for consumers (Whole Foods Market History, 2016). Whole Foods has recently begun a target of the younger demographic, such as millennial that are increasingly becoming more concerned with the food they are putting in their bodies (Low, 2015). However, there is a large shift happening within the retail industry, including grocers concerning consumer behavior (Lewis & Dart, 2010). The problem Whole Foods is having though is the lack of adaption they are having to the changing society. Having a younger demographic with such high price and quality items is causing a disconnection with consumers and brand loyalty.
By entering the supermarket channel, Natureview can leverage its brand image to expand its consumer base. According to the survey, 67% of households consider price as a barrier to purchase organic food products and 44% of the customers like to have wider selection of organic products in supermarket, lower pricing and 6 assorted flavors at supermarkets will attract these customers and help generate higher sales. The main drawbacks of this strategy, as pointed out by the exhibits, is higher costs involved in marketing and advertising. Although, its true this will help us reach to a broader customer base who shop both at supermarkets and organic foods. Consequently, this marketing strategy would help promote the brands implicitly to organic chain shoppers also.
Sustainable packaging is another key focus, with the company striving to use recycled and recyclable materials whenever possible (Whole Foods Market, 2023). This commitment minimizes the environmental impact associated with packaging production and
Opportunity abounds in the natural and organic sector of the food industry. The WhiteWave Food Company, however, has focused solely on growth through expansion. While this has provided economies of scope both in product diversification and geographic diversification, it will not supply the economies of scale needed for WhiteWave to become a cash cow in the industry, like Kraft, General Mills and Danone. Economy of scale is important in competing against bigger companies as it provides more efficient plant operations, better bargaining with suppliers and the opportunity to strengthen its relationships with retailers of all sizes. WhiteWave can stay true to its natural and organic roots, while fending off bids to be acquired by the larger firms, by shifting its corporate-level and business-level strategies to achieve greater economies of scale.
Opportunity to get better prices on food In this case, changing suppliers would be the winning
The Amazon and Whole Food Market, Inc. deal with health and nutrition health products. However, they have been facing a lot of competition from their rivals in the market. They have come with new strategies in the market which will help them to stay relevant in the business. They have introduced new products in the market. They have come up with an online platform where they are able to market their products.
