NCI Cereal Innovators Webinar Series | Featuring Megan Stanton
Megan Stanton, Associate Director of Food & Drink at Mintel.
Each month, NCI updates the “Cereal Innovators” series that offers insight into the world of baking and cereal grains. During this week’s webinar, participants learned about “How Bakery Brands Can Navigate the Wheat Crisis.” This week’s presentation featured Megan Stanton, Associate Director of Food & Drink at Mintel.
Stanton began by introducing three core ideas that are essential to Mintel’s vision for battling the wheat crisis (shortage): 1) be clear on your [brand’s] value proposition; 2) remember the “lipstick effect”; and 3) plan for future supply challenges. These were all expanded upon as the webinar progressed, and tied into the real world, whenever possible.
Percentage of product launches containing wheat as one of their top three ingredients, 2017-2021.
Before she delved into that, though, she wished to recap what she means when she uses the term “wheat crisis.” In short, it refers to the ongoing storm of conditions that are making it more expensive and difficult to reliably source wheat. She described how inflation (which is has caused wheat prices to soar), climate change (droughts and floods affecting the quality and yield of wheat crops), and the conflict in Ukraine (Russia supplies almost 30% of the world’s wheat, and the conflict has severely disrupted that) all are forming the so-called “wheat crisis” being mentioned. This is especially concerning for bakeries, due to the fact that five of the top six wheat-heavy products are products made in bakeries.
Because of this, bakeries and brands need to adjust accordingly to these industry disruptions and changes in order to remain competitive. Stanton suggested a variety of ways that they can do this, with the first involving price. Specifically, looking at it from three perspectives: price points, functionality, and the psychological implications of differing prices.
Customer rationale for buying bakery products amidst price increases.
Stanton suggests that, in the midst of needing to raises prices on goods due to rising wheat prices, brands should remain entirely transparent about doing so. They should not focus on minimizing the effect the price change will have on customers, but should instead explain exactly why they’re doing it. It’s also important for brands to “remind” consumers why they need their product. Reminding customers of the key benefits (especially in a nutritional sense) the brand’s products provides helps reinforce their value against the rising prices of the products. However, she noted that it’s important for brands to offer value beyond product benefits; methods such as highlighting the brand’s heritage or support for local communities are both great ways to do so.
There are other action steps brands should take to adjust to the market changes, according to Stanton. The first is providing a connection/dependability to what she describes as an “anxious world.” In this case, she means appealing to the psychological benefits consumers seek from these products rather than just presenting them as rational purchases. She also suggests that brands position bakery products as an “affordable luxury,” which refers to the “lipstick effect” from above. Doing so appeals to the psychological need in the consumer’s mind to treat themselves to small, affordable treats.
Percentage of customers in various countries that believe climate change will affect what they eat/drink.
These actions are those that Stanton believes brands need to take now. Beyond those, though, there are additional steps that brands need to take in the future, as well. The first of these future steps includes switching over to more climate-resilient ingredients. That way, future climate events – like what’s occurring right now – won’t have as drastic of an impact on the supply chain. She also stated that highlighting ingredients that both benefit consumers and the environment is important, as that helps build its appeal for an increasingly environmentally-conscious society.
Additionally, Stanton also noted that brands should focus on the functional benefit of alternative ingredients in their baking. This is useful in helping to mitigate future supply or pricing issues. Related to this, she stated that certain ingredients (oats, pulses, etc.), which are increasing in usage amongst the baking profession, can be used to help offset the rising costs of wheat through their functional and environmental benefits.
Finally, perhaps the most important action step: investing in regenerative agriculture. With only an estimated 60 years until the world’s topsoil is eliminated and is thus unable to grow crops any longer, farming practices need to change, which is where regenerative farming serves as a potential solution. Using this tactic could also help reduce input costs (ex. fertilizer) and reducing carbon emissions. These benefits can also be communicated from brands to consumers, which will likely garner support for these regenerative farming practices.
The Northern Crops Institute greatly appreciates Megan Stanton’s professional input and involvement in our webinar series. At NCI, we continue to fulfill our mission to support regional agriculture and value-added processing by conducting educational and technical programs that expand and maintain domestic and international markets for northern grown crops.
For more information about future webinars offered at NCI, click here.
To view this week’s webinar, click the recording below.