Not many people would argue the importance of data in running a business
It’s the crux of proper accounting and a pillar of successful expansion. It’s instrumental in hiring and firing. Intuition matters too, of course, but in the end, it’s data that will show whether or not a gut-based decision was the right one.
In the food and beverage industry, data is also important because it helps us understand consumer trends. That’s especially important in an era where what people want is changing more quickly and more often than ever before.
The coronavirus pandemic has muddied the waters somewhat (actually reversing trends in some cases, like the renewed popularity of boxed mac-and-cheese and other off-the-shelf meals), but fast-moving trends are a phenomenon that pre-dates the pandemic. The rise of social media, internet influencers and emerging technologies (think artificial intelligence and internet of things) are a few of the major factors fuelling the fire.
Know your data
As mentioned above, there’s more than one type of consumer data. But even within the broader scope of data that provides insight into consumer trends, it’s useful to make subdivisions.
At one end of the spectrum, we have aggregate market data, or “third-party data.” Aggregate market data comes from market research, including focus groups, surveys and studies from think tanks like Nielsen and Deloitte.
Market data largely shows us the directions of consumer behaviour in a retrospective way. It’s a very macro approach and, to be fair, one from which companies have benefitted for decades. For many years, it was the only reliable source of knowledge about the direction trends were headed.
Now, however, we have consumer data based on the interactions a company has with its individual consumers, also called “first-party data,” and its new cousin “zero-party data,” which is based on data consumers consensually share with a company. It’s real-world data that, in some cases, can even provide real-time insights. It’s not macro at all — it’s micro to the extreme. It can track an individual’s transactions, clicks, content and all of these combined to reveal preferences and predict behaviour.
Data in this category comes from direct experiences consumers have with a company’s communication channels, such as a mobile app, e-commerce platform, a customer care centre or even experiences provided by employees. They can even take innovative forms — for example, Coca-Cola’s freestyle soda machines, which are both a soda dispenser and a “communication channel.” They let consumers mix any flavours contained in the machine, but crucially, they also tell the company which flavours are being mixed — as well as when, where and how often — helping the company understand how consumer behaviour is changing and informing better product strategy and marketing efforts.
Quality, not quantity
This article isn’t meant to inspire companies to make a mad scramble for as much consumer-based data as possible. Quality is more important than quantity. In fact, too much data can be an obstacle, if there’s so much that you can’t discern signal from noise.
In a world where digital experiences can help companies track and collect a vast amount of consumer data, it is easy to start piling up an unprecedented amount of information. True power (at least in business) comes not just from having data, but knowing how to use it to gain a competitive advantage.
It’s not about collecting as much data as you can, but about collecting data that will explicitly serve your purpose and goals as a business. For food and beverage companies, there are a couple of clear paths to that result.
One is to simply buy data from carefully chosen sources. By forming a business partnership with retailers and other alternative channels and providers, you can gain access to useful data that could tell you, for instance, what other products are often purchased in tandem with your own, how, when and where your product is being consumed, how it’s performing against competitive products, and much more.
The other way to get valuable, consumer-based data is to create your own direct-to-consumer experiences. In some pursuits, this is the gold standard, as it results in uncorrupted, first-party data that you have total ownership of. In the past, generating your own consumer data was, in most cases, inefficient and unwieldy to the point of being cost-prohibitive.
Today, with the incredible capabilities available through software services and IoT devices, it’s a very real possibility, and one worth considering for any company with an eye toward growth. The beauty of these solutions is that you don’t need to have a D2C experience that reaches 100% of your consumers. You need just a “window” into the market that will allow for insightful tracking of consumer behaviour.
Ride the data wave
The ability to speedily gather, analyse and act on massive amounts of information — “big data,” as it were — is permanently changing the food and beverage landscape. With new technology and new applications constantly coming into play, nobody knows exactly what the industry will look like even 10 years from now.
Given the many success stories of digital adoption we’ve already encountered, though, along with the clear dangers of innovation lag, there’s no reason leaders in the field (from small-time entrepreneurs to FSTE 100 execs) shouldn’t be taking advantage of what’s on offer today.
About the Author
Bruno Guicardi is President of CI&T. CI&T is your end-to-end digital transformation partner. As a digital native, we bring a 25-year track record of accelerating business impact through complete and scalable digital solutions. With a global presence of 3,000 professionals in strategy, research, data science, design and engineering, we unlock top-line growth, improve customer experience and drive operational efficiency.