Ricardo Migueláñez, Editor of Qcom.es and Wiki Spanish Food
Social media is the Spanish agri-food industry's leading method of communication with consumers, according to 31% of the 107 sector executives surveyed in November and December 2014. The results of this survey were detailed in the report entitled Challenges and outlooks in Spain's food and beverage industry, drafted by consulting company KPMG, in cooperation with the Spanish Food and Drink Industry Federation (FIAB).
Social media played a bigger role than point-of-sale marketing (30%) and promotional actions through traditional media, such as TV, radio and the press (20%).
This result implies that the digitalization process is advancing notably, even in food distribution and consumption, driving a significant transformation in decision-making by customers, since the new environment enables them to be permanently connected and to access the information they need, as well as the experiences and opinions expressed by other users, and vice versa. In short, the consumer, who is connected online, shifts or can shift from being a passive agent to a participatory one.
According to the survey, the executives surveyed believe there are three main factors that will impact consumer behavior in the food industry in the coming years: the price of the selection (28% of the total), the proximity of stores (26%), and e-commerce (26%). Other factors they consider important include social media (14%) and the capacity to raise awareness about promotions with coupons, etc. (6%).
For Carlos Peregrina, Head of Consumption and Distribution at KPMG in Spain, “Digitalization is, without a doubt, one of the greatest challenges faced by the food and beverage industry, together with goals such as internationalization and efficiency. New channels for sales, payments, social media and others related to the internet must be part of strategic decision-making by sector companies".
In this regard, the report suggests that it is imperative that agri-food companies adapt their logistics to customers' needs while also providing an optimal online purchasing experience. This is also something that most companies are not doing, according to the results of this survey regarding companies' current investment priorities.
According to the executives polled, the main priorities in capital expenditure at food and beverage companies are related to cost efficiency processes (29%), geographic growth (19%), advertising and marketing (19%), the acquisition of new businesses/companies (18%), IT (6%), sustainability initiatives (6%) and, lastly, social media (barely 3%). It's very clear: companies are aware that it's an important and strategic challenge, but they have hardly any money to invest in this area.
Presence and challenges
It's not enough to be more or less static or more or less dynamic online and on social media. According to Jorge Sainz, Director of Management Consulting at KPMG in Spain, companies with a presence on social media "face the challenge of being able to incentivize, participate and collaborate in the entire decision-making process so as to maximize value for their customers. To that end, it's necessary to analyze the various phases of the decision-making process during the customer's life cycle, from traffic generation to conversion and sales, the final goal being retention and development of the relationship with them".
According to Mauricio García de Quevedo, General Director of FIAB, "An industry like food and beverages, which has to compete in a global market, provide the best products in the best way to the population, and maintain customer loyalty, must address an infinite number of new sources of opinion and information to maintain its role as the country's leading industrial sector".
For this sector to advance in e-commerce, the positive experience buying online will be the most important factor, according to 49% of the food and beverage sector companies surveyed. Other important factors are logistics adapted to the customer's needs (30%), the development of new mobile apps (10%), manufacturers' direct online channel (6%), the collective collaboration initiative with other companies, etc. (4%), and payment methods (1%).
Having a presence and communicating through social media, such as Facebook, Twitter and other channels is, for companies in general and for the food and beverage sector in particular, not only a way to achieve greater exposure to potential consumers (and that success can be replicated worldwide), but also to address new risks "which many companies are not aware of and don't know how to face", says Javier Santos, Head of Cybersecurity at KPMG in Spain. On the social media map (the Social Web), which is constantly expanding, Santos identifies 15 categories which, according to their functionality, and for informational purposes, we include below:
Collaborative websites (Wikipedia, Wikispaces);horizontal social media (Twitter, Facebook, Google+); communication apps (WhatsApp, Skype, Line); search engines (Google, Yahoo, Bing); games (World of Warcraft, Farmville, The Sims online); virtual worlds (Kaneva, Second Life, Habbo); crowdsourcing tools (Yahoo Answers; TweetBrain, Waze); mobile operating systems (iOS, Android, Linux); RSS (Feedly, FeedBurner, Bloglines); direct streaming (Ustream TV, Periscope, Meerkat); video (YouTube, Vimeo, Blip), audio (iTunes, Spotify, Tidal); aggregators (Digg, FriendFeed, StumbleUpon); images (Instagram, Pinterest, Flickr), and blogging (Wordpress, Blogger, Tumblr).