Food Processing – Food Industry Disruption Spells Opportunity for Ingredients Companies

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Food Processing – Food Industry Disruption Spells Opportunity for Ingredients Companies

The combination of 3G Capital’s ongoing acquisitions, margin pressure from discounters like Aldi and Lidl and the expectations of activist investors has thrown consumer packaged goods companies in the food space squarely on the defensive. Most have reacted by going into cost-cutting mode, slashing entire layers of marketing and R&D talent from their organizations. But the imperative to innovate is like risk—it doesn’t get eliminated within a system but rather redistributed to different components. Eventually CPG firms will realize that they can’t cost-cut a path to growth, but in the meantime, their focus on bottom-line efficiency spells an opportunity for ingredient companies to absorb the marketing and R&D talent the CPG firms are shedding and thus become the new source of insights into, and products tied to, consumer behavior.

Full Story: Alejandro Folmer, Jason Hecker and Bernhard Scholl: “Can Ingredient Companies Benefit from Disruption in CPG Companies?” on foodprocessing.com (13 November 2017).