Factors like market saturation, ageing and static populations, threat of low cost competition from emerging economies etc. are not completely new and their march has continued for the past several years. However, the crisis has brutally demolished any hopes of a gradual change and time to adjust to the new landscape.

Consumer and Govt spending is likely to remain under pressure for the foreseeable future and therefore demand for better value will be widespread and remain intense.

This situation can easily be seen to be mainly negative /threatening, but while undoubtedly painful for many consumers /businesses, it also presents opportunities for the innovative and the courageous. In Schumpeter’s words, today we see the perfect time for creative destruction / reconstruction in several industries.

In this series of short blogs, I will share some generic and a few industry specific thoughts on opportunities for creating profitable disruptive change.

There are many strong indicators pointing to an inconvenient truth – in many developed economies, waste or overconsumption in food and drink sectors is widespread. However, few established players, brand owners or retailers, seem to be willing to face up to the implications of dramatic reduction in volumes.

1. Between 30-50% of fresh / chilled food gets wasted in the UK. There are several factors, but a key one is offers like Buy One Get One Free.

2. The steadily increasing % of population that is overweight / obese in Europe and US.

3. An estimate from the recent Parliamentary committee report showed that the total alcohol sales in UK are 40% higher than the volume that can be consumed if all adults consumed the maximum weekly guideline quantities every week. This is not unique to UK and applies to several EU countries though the % varies.

4. Bottled water sales in W Europe have declined dramatically as consumers become aware of environmental consequences of packaging and transport involved in the sector (especially when compared to tap water).

So some of these sectors could see a significant portion of demand disappear for ever driven by stricter regulatory controls on promotions or shift in consumer attitudes. These challenges are as relevant for brand owners as they are for retailers.

I firmly believe that the implications are wide ranging, and product, pricing, promotions, supply chain all will be affected. Environmental and socio-economic implications of such waste / overconsumption are significant and the impact is not confined to corporate P&Ls.

The responses so far from both brand owners and retailers have largely been tentative. Brand owners have streamlined brand portfolios, e.g. Unilever selling many tail brands. Retailers have used Category Management to rationalise SKUs / offer more manageable choice on shelf.

But don’t you think the real opportunity lies in thinking more radically, e.g. ways of redesigning the entire value chain consumer back to fit in with the context today / in future rather than just tinkering with the models that evolved mainly during the 60s/70s/80s?

I believe it is possible to create a much better solution by applying fundamental principles of Lean thinking in combination with new technology and collaboarative networks of the key participants – consumers, retailers, brand owners and their suppliers.

Quite possibly, the spoils / benefits won’t be shared in the same way in the new system as they are today and therefore this requires the courage to free oneself from the vested interests and orthodoxy that naturally build up in industries and organisations.

Fortunately, responsible marketing is beginning to gather momentum. Different brands and businesses are correctly identifying aspects of responsibility most relevant to them and trying to do the right thing, e.g. Coke with water conservation, Unilever with Palm Oil, WalMart with carbon emissions etc.

What could we achieve if the envelope could be pushed much further to tackle the deep rooted challenges head on?