In today’s low growth food industry, looking beyond the core business may be the best way to kickstart higher profitability. Many food manufacturers spent the 1990s divesting non-core business acquired in the heyday of the late 1980s, but it could be time to invest judiciously in niche markets.

Major food and beverage players should balance the battle for market share with more focused efforts to mine profitable niche markets, says Promar International. “Pouring resources into capturing or recapturing market share may be a time-honoured tradition, but it won’t cure what ails branded food and beverage companies,” said Tracy Carlson, project manager of Promar’s new study on reinventing the food industry. *

According to Promar, the emphasis should be on how to break free of this advance-and-retreat mindset to look for opportunities outside the conventional stamping ground. Companies also need to resist the urge to manufacture goods that happen to suit their production facilities rather than the needs or desires of consumers.

*The new report Beyond The Share Battle: Reinventing categories for topline performance and profits can be purchased in the research store. For more information please click here.