How to keep up with discounters in the food industry

The food industry is serving one of the most dynamic and continuously growing markets. Keeping up with trends and new technology can be extremely challenging for any company, regardless of the segment.  And recent advancements in the food industry have made it exceptionally difficult and cost intensive to stay at the technological forefront and remain competitive.

In this article we’ll look at how discounters have begun shifting standards and shaking up the food market, and how voestalpine Engineered Products  can help food producers keep up.

DISCOUNTERS ARE ON THE RISE

Discounters are by far the fastest growing grocery retailers on the market. For example, from 2015 to 2020, Schwarz Group, the largest discounter chain in the DACH region, has increased its turnover rate by 50%. That’s about $40 billion USD!

Recent upheavals in the global economy have discounters pushing for leading positions in food retail. Covid, the war in the Ukraine, and inflation have all caused prices to rise. So, while many trends influence the food market (for example, vegan, vegetarian, and organic diets), the biggest change is in consumers’ demand for cheaper alternatives to common convenience stores, in particular discounters and their new standards.

CHALLENGES POSED THROUGH DISCOUNTERS

This change in the food market is posing some major challenges for food producers. The most significant change is price dumping: Retailers attract customers through lowered prices, and lower prices can mainly be achieved by initially buying cheaper products.  This price-lowering pressure is transferred from retailers to food producers, who must increase their production efficiency to survive. But not only do retailers demand lower prices for food products, they also expect the same products to offer longer shelf lives and adhere to the highest hygiene and quality standards.

HOW CAN FOOD PRODUCERS KEEP UP?

With discounters demanding reduced prices and improved quality to increase their profitability, the challenges facing food producers may appear insurmountable.  While some producers might rashly consider using cheaper production equipment to save on initial outlay costs, they will likely pay heavily for the total cost of ownership. A safe, reliable, and high-quality production process is ultimately also the most cost efficient.  This is where voestalpine Engineered Products can really make a difference for our customers.

Our Meat Grinding Technology, for instance, use materials with a very high wear resistance, allowing for an essentially higher overall production run (with reduced need for maintenance breaks). This gives our customers an enormous advantage over their competitors, who are forced to make costly production breaks to replace inferior grinding parts.

The use of high-quality materials for our Meat Grinding Technology not only helps our customers save on production costs, but they also offer superior hygiene standards:  With improved durability and a longer lifetime, voestalpine grinding tools provide a far smoother cutting surface. At first glance this may seem insignificant; but in a clean-room environment, any additional surface area on a blade allows more bacteria to form. This can significantly reduce the finished product quality and shelf life.

With such superior features, voestalpine Engineered Products such as our Meat Grinding Technology give our customers the edge they need to keep up with the demands of discounters.

WHAT DOES THE FUTURE HOLD?

Current market developments clearly show:

1. Price is king.
2. Quality is more important than ever.

Food producers who embrace these developments will be well-positioned to keep up with the pressure of the market. It is therefore crucial for producers to optimize their manufacturing processes by getting the best advice and using the best technological solutions.

At voestalpine we have always worked closely with our customers to help them identify their critical production issues and figure out the optimal solutions. This is how Engineered Products, like our Meat Grinding Technology, opens the door to tailored-made solutions. Because at voestalpine, we’re committed to keeping our customers one step ahead.

FIND OUT MORE

If you’d like to discover more about how we can help you and your business, contact us today. You can also meet us personally at the exciting Interpack Processing and Packaging Leading Trade Fair from the 4^th to 10^th of May 2023 in Düsseldorf, Germany