The food market: supply

Spectacular growth

For centuries, the challenge of producers was to respond to ever-increasing demand due to population growth. Technological innovations first appeared in Europe in the late 18^th century and the industrial and agricultural revolutions of the following century enabled sustained growth of agriculture and livestock yields. At the same time, food conservation techniques and modes of transport became more efficient.

In the 1960s, industrialised countries saw numerous agri-food companies grow very rapidly. The 1970s were defined by mass production and consumption of food products that were becoming ever cheaper, while supermarkets played an increasingly important role.

Supply, however, did not solely depend on large food industries. Artisans and small businesses did not disappear altogether. On the contrary, the demand from some consumers for non-standardised food enabled bakeries, for example, to stand out and to offer other kinds of products and services.

The idea of supermarket own brands emerged in the 1990s with the aim of competing with the major brands. These own brands copy the products of leading brands, but are sold at a lower price as they do not entail advertising costs. Own brands are most often manufactured by small and medium-sized businesses and ordered by a distributor.

Supply is currently more than sufficient in industrialised countries and offers most consumers an unprecedented range of products.

Targeted supply

The variety of products now available for purchase all year round is greater than at any time in history. International trade and efficient production chains facilitate the continual replenishment of merchandise. Supply is constantly renewed. In the United States, over ten thousand new products appear each year. Low price food rubs shoulders with premium products on the same shelves. Even if price is not the only criterion when it comes to shopping, it is a question of offering goods at affordable prices in order to remain competitive.

Suppliers draw on socio-demographic data to attract new customers and expand their market share. Differentiated products are designed by age or gender. Immigration also generates new demand and a growing trade in ethnic products. Another more recent strategy requiring more flexibility on the part of companies involves responding to consumers’ specific demands. If the demand for chicken fillets in Europe rises, the producer adapts. The fillets are delivered as soon as possible to the supermarket, while the rest are frozen and shipped around the world.

Supply follows the demand by some consumers to move away from industrialised products and fulfils the quest for authenticity or other benefits. ‘Healthy’ food, rich in vitamins, minerals and other substances, or low in fat and sugar, are taking up more and more shelf space. Locally-sourced, organic or fairtrade products, for years the preserve of specialist shops, can now be found everywhere. At the same time, certifications and designation of origin labels proliferate. Consumers are spoiled for choice, to the extent of being overwhelmed.