How to Create Consumer Demand in the Food Sector

Canada’s grocery sector has been in a state of flux since the beginning of the pandemic, and the inflationary wars that have emerged. During this period the media have referenced the term “Greed Flation” without acknowledging that since 2015, though the cost of food has increased 32.3%, the price per litre of gasoline has increased 64%,[1] and freight charges have a big impact on foods S.R.S.P.

It is every food entrepreneur’s dream to get listed. Though it has always been the brand’s responsibility to generate demand, it is no more evident than it is today. Here are just 3 key challenges FMCG brands face moving forward:

  1.  Market Growth: Circana forecasts food and beverage volume growth of between zero and 1% this coming year.[2]
  2. Consumer Purchasing Trends: 88% of shoppers have switched to lower price brands in response to increased prices, and 52% plan to continue brand switching.
  3. Consumer Behaviour: 84% of shoppers spend more than +30 minutes preparing for their regular grocery trip.[3]

So, what can brands do, especially those managed by entrepreneurs? Here are 4 strategies on:

How to Create Consumer Demand in the Food Sector!

1. Introduce Innovative New Products

There has never been a year like 2024 in which the FMCG sector lacked innovative new products. According to Mintel’s Global New Product Database, through the first five months of 2024, 35% of global CPG launches were “genuinely new” products, while 65% were “renovation” launches such as line extensions, reformulations, new packaging, or item relaunches.[4] Innovation is critical to the brand’s bottom line and boosts overall growth.

2. Establish Your Distinct Target Audience

By having a distinct target audience, businesses have a better understanding of where they need to focus their time, and resources to connect with those more likely to purchase their product. Brands need to understand how consumers shop:

  • 73% shop in-store or online (81% of online searches are unbranded).
  • 27% are exclusive in-store shoppers.[5]

Brands would be wise to engage with new Canadians. They represent an estimated incremental spend of $3.4B on FMCG,[6] and ethnic stores have experienced +14% dollar volume growth over the past year, 52-week, 08/10/24.[7]

3. Create a Trade Promotions Program

Consumers are on a mission, namely, to get in and out of the grocery store as quickly as possible. Businesses have a responsibility to support the retailer, and in the process help them increase category sales. Here are just 3 means on how they can support the retailer:

  1. Promotional allowance: Promote the brand 3-4 times per year. 49.2% of dollar sales in 2023 were sold on promotion, representing an 11% increase.[8]
  2. In-store Sampling Program: Thirty-five percent (35%) of consumers who try a sample will buy the sampled product on the same shopping trip.[9]

Incorporate a coupon program, 72% of shoppers have increased their use of coupons, and plan to do so in the future.[10]

  1. Create Flyer Advertisement: 86% of eating occasions have been sourced from home over the past year.[11] Consumers are flipping through flyers for savings. Thirty-five percent (35%) of shoppers seek out meal inspiration,  and 49% seek out grocery store flyers as a source for these meals.[12]

4. Generate Awareness With The Consumer

Consumers are planning their grocery trips in advance and at all costs trying to avoid impulse purchases as research reveals this purchase costs the consumer on average $2,000 USD a year.[13] Products must be competitively priced, offer great value, and be as transparent as possible to register on the consumer’s radar screen. Here are just 3 means on how brands can generate consumer brand awareness:

  1. Create a Social Media / Influencer Campaign:

Instagram, Facebook, and YouTube are the top platforms for achieving the highest return on investment. On average, brands make $5.78 for every $1 spent on influencer marketing.[14]

  1. Create a Monthly Blog

Blogging is identified as the best content marketing strategy to build brand awareness. Brands that prioritize blogging experience 13X more ROI than brands that don’t.[15]

  1. Create Bold Colourful Packaging Utilizing QR Code:

Bold and vibrant colours, such as yellows and oranges are attention grabbing and can draw consumers in from a distance. QR Codes are recognized to be more transparent with the consumer and increase  brand transparency. Ninety-four percent (94%) of all consumers are  more likely to be loyal to a brand when they commit to full transparency.[16]

There may be some relief coming to Canada’s food wars. Canada’s Consumer Price Index rate in August hit +2.0%, the first time since 2021, yet CPG inflation has been trending well below CPI for the past 7 months. For August 2024, the CPI index hit 2%, and the CPG index hit 0.8%.[17]

“In 2025, consumers will place greater emphasis on sustainability and ethical business practices. Brands that prioritize eco-friendly products, sustainable packaging, and transparent supply chains will see stronger consumer loyalty”. [18]

[1] StatsCan Numbers Offer Proof Trudeau Government Not Worth the Cost, www.torontosun.com, May 2024

[2] Circana Sees Volume Growth Struggles Continuing in 2025, www.foodbusinessnews.com, August 2024

[3] 2024 Mid-Year Promotion Trends and Shopper Insights, INMAR Intelligence, August 2024

[4] Innovation on Hold, www.foodbusinessnews.net, July 2024

[5] Unlocking Canada’s Omnishopper, Grocery Business, July / August 2024, Carman Allison

[6] New Canadian and Multicultural Insights, Numerator, May 2024

[7] Demand Landscape Overview, Environics Analytics, 2024

[8] Value vs. Volume – Changing the Conversation, www.grocerybusiness.ca, Carman Allison, January / February 2024

[9] Do Free Samples Really Increase Sales? www.fizz.co.uk, March 2024

[10] 2024 Mid -Year Promotion Trends & Shopper Insights, Inmar Intelligence, August 2024

[11] Circana Research Reveals 86% of Eating Occasions Sourced from Home Over the Past Year, www.preparedfoods.com, September 2024

[12] 2024 Mid-Year Promotion Trends & Shopper Insights, Inmar Intelligence, August 2024

[13] Impulse Buying: What It Is and How You Can Avoid It, www.cnbc.com, July 2024

[14] Influencer Marketing ROI: How to Measure Your Campaigns, www.storyclash.com, April 2024

[15] Blogging Statistics – 31 Stats You Need to Know in 2024, www.blog.hubspot.com, December 2023

[16] How to Build Loyalty and Trust with Brand Transparency, www.emarsys.com, June 2024

[17] Nielsen IQ, Market Track Canada All; Channels, Monthly Periods ending Aug 24, 2024

[18] Consumer Confidence and Spending in 2025: What Businesses Can Expect, www.bizinp.com, September 2024