The combined purchasing power of minorities in the U.S. exceeded $3 trillion in 2011 and is projected to reach $3.6 trillion by 2015, according to a new Food Marketing Institute (FMI) white paper, and thus it is imperative for food retailers to adjust business processes and growth strategies to adapt to this shifting environment.
The analysis, Impacting Sales: A Holistic Approach to Supplier Diversity in the Food Retail Industry, recommends that an effective means of reaching minority populations is for food retailers to ensure their supplier sources include companies that are at least 51 percent owned, operated and controlled by minority, women, veteran/service disabled veteran, and/or LGBT individuals. The report urges businesses to move away from the notion that Supplier Diversity is simply a “do-gooder” strategy; and rather must be considered as a sustainable business practice, a competitive advantage and a necessary means of increasing market share.
As the U.S. Census reports, minorities will be the majority by the year 2050, and new projections are indicating this may be in effect as early as 2043. “The changing demographics of our nation’s consumers create substantial opportunities for food retailers to rethink their business partnerships and strategies, especially in the food world, given the array of consumer palates,” Tim Williams, director of Diversity Affairs for Safeway Inc. and chairman of the 2012 FMI Supplier Diversity Committee, said. “Companies must look to leverage the diversity of both their staff and their suppliers in order to tap into multicultural markets on a daily basis.”
The report, sponsored by Campbell Soup Company, Coca-Cola Refreshments, Unilever and Kellogg Company, presents case studies of Fortune 500 corporations with nationally active Supplier Diversity initiatives. It demonstrates how varied suppliers provide added value and enhance corporate objectives, such as increased revenue and supply chain cost savings.
FMI President and CEO Leslie G. Sarasin noted, “Companies find that messages conveying strong company support of Supplier Diversity resonate with minority consumers across the supply chain and are a powerful means of building brand equity, driving brand loyalty and creating a distinct, competitive advantage.”