Social media and the food and beverage industry

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MAI SIGUE-BISNAR

Social media, once dismissed as a passing fad by most people, is now more important and ubiquitous than traditional print advertising. Well-known social media platforms are now marketing giants and they are offering businesses valuable information about their customers and connecting with them free of charge (mostly) and in a convenient way.

In his International Food and Beverage report entitled “Hunger for growth: Food and Beverage looks to the future,” Grant Thornton Partner and National Leader for Food & Beverage Simon Hunter said that the social media is now considered more important than traditional print advertising in promoting these goods.

His report revealed that nearly half (49 percent) of all food and beverage industry executives say social media is the main method of attracting and retaining customers, while print advertising got 46 percent. The company website is viewed as the most important at 78 percent.

Other digital tools such as email, online advertising, search engines and digital coupons are also being used to engage with customers, reflecting growing customer demand for accessible product information dissemination.


While this is a trend worldwide, Filipinos tend to use the internet in the Philippines to do research on food and beverage and then go to the nearest store or mall to buy them. Filipinos just love webrooming.

Webrooming, which means searching online but buying in brick-and-mortar stores, is still preferred by Filipinos. (Webrooming is different from showrooming, or searching in physical stores but buying online.)

Nielsen Philippines said trust is the main reason for this. Filipinos want to see and hold a product physically before they buy it. Moreover, webrooming satisfies the instant gratification yearning among the young.

SM Supermalls, the biggest mall in the country, said that people who go to the malls for food and beverage contribute 25 to 30 percent of its sales, up from only 5 percent in 2004.

SM Supermalls Senior Vice President Steven Tan said that many of them go to the malls to socialize more than to shop, which was why they also market them as lifestyle centers with coffee shops and parks.

Online grocery shopping, however, still has a low market penetration rate of 1 percent in the Philippines, similar to other Asean countries except for Singapore. South Korea is the highest in Asia with 51 percent online penetration for packaged foods and 35 percent for fresh produce.

Nielsen Philippines identified the top three barriers in the country to online food and beverage shopping: choice (there is still a limited differentiated array of choices for packaged and fresh foods and beverages online in the Philippines); infrastructure (few online sellers who can promise same-day delivery) and ease of payment (less than 10 percent of Filipinos have credit cards).

But, does this mean that the online food and beverage shopping and online grocery shopping would falter in the Philippines?

Among active internet users in the Philippines, 97 percent have social media accounts, enabling digital marketers to target them in their future promotions.

Confidence among Filipino consumers continues to be the highest in Southeast Asia and second in the world, edging up 2 points to a score of 119 in the first quarter of 2016, according to a Nielsen Global Survey of Consumer Confidence and Spending Intentions last year.

The consumer confidence index measures perceptions of local job prospects, personal finances, and immediate spending intentions, among more than 30,000 respondents with internet access in 63 countries.

Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism.
Interestingly, the Visa eCommerce Consumer Monitor 2014 revealed that nearly nine out of 10 Filipino consumers do their “shopping” online. Convenience, price, and deals were cited as the top reasons for online shopping.

However, the top three categories for online transactions in the Visa Monitor are bill payments, fashion-related items and movie tickets. Food and beverage still lag behind in online transactions among Filipinos.

I am not sure if Filipinos will buck the worldwide trend on online food and beverage shopping. There is a slow uptick in this area, but the active use of social media is likely to influence the trend away from webrooming into online shopping.

Mai Sigue-Bisnar is a partner, Audit & Assurance, and head of Markets Group at P&A Grant Thornton. P&A Grant Thornton is one of the leading audit, tax, advisory and outsourcing firms in the Philippines, with 21 partners and over 850 staff members. For your comments, please email mai.sigue-bisnar@ph.gt.com or PAGrantThornton.marketscomm@ph.gt.com. For more information about P&A Grant Thornton, visit our website www.grantthornton.com.ph.

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