Before our summer break, I’d like to focus on something that has implications for agriculture and food and many other categories: demographics and the incoming changes.
This is one of my favourite topics, as I always wonder about the links between population changes and societal and economic impacts. The United Nations recently released its updated projections for the end of 2100. Unlike the previous forecast, where the population was not expected to peak in the foreseeable future, the estimation now is that we’ll observe a decline as soon as 2080.
Event more starking is the following graph where the “under 18s” population is expected to have already peaked and to be exceeded in number by the “over 65s” before 2080.
Beyond the graphs, agrifood players have to plan ahead in order to face the (many) consequences of this epochal change. Among them are (and that’s only a few):
1 – The need for new growth models not based on conquering new markets and on population growth: this is a long-term problem as even if the population reaches a peak, new consumers, notably in Africa and Asia, will still emerge as middle-income earners and will seek consumer packaged goods. Still that will represent a big paradigm shift for food and agriculture companies where growth is still mostly linked to selling more “stuff”.
2 – The shift to healthier food products: that’s something engaged by the largest players, notably through portfolio rotation and acquisitions. This will amplify, and eventually turn from “better for you products” to using new ingredients/crops with health benefits, creating eventually a competition between agriculture, food and health companies.
3 – A pivot to services: as Apple did move from selling more hardware to a finite number of consumers to selling them services, agrifood companies could leverage their data and insights to create services to enhance the consumers experiences (through health benefits and beyond).
As I said, that’s a “big topic”, something that most leaders have to seriously consider now and start making plans on how they will shift their business.
