Courtney Buerger Schmidt, Wells Fargo Food and Agribusiness Sector Analyst, Protein and Dairy
Lee Ann Pearce, Wells Fargo Food and Ag Sector Manager, Specialty Crops, Tree Nuts, Wineries, Grapes

February 27, 2019

Social media has changed the way that people around the world obtain and digest news, or “fake news”, along with the speed at which the news becomes public. The reality is that social media has taken on a much larger role in product visibility and promotion, especially if the demographic target is the younger generations. So, if you haven’t stopped to think about how social media directly and indirectly impacts the Food and Agribusiness industry, you might should.

The majority of Americans are using one or more social media platforms¹. Facebook and YouTube dominate, but others such as Instagram are experiencing accelerating growth rates. Not surprising, the younger generations already have heavily embraced social media with 88% of Americans aged 18−29 years old using at least one social media site¹. And, while usage drastically decreases to 37% for Americans aged 65 and older¹, this percentage still represents a significant piece of the pie.

Beyond keeping up with family and friends, social media has become a low-cost way for a business to promote a consumer product. Various studies have shown social media to be effective for improving customer relations and increasing sales, and it can be used alone or in addition to more traditional marketing approaches.

In today’s competitive environment, many consumer products companies have realized that it’s not enough to simply sell consumer products, but must also sell experiences that allow consumers to interact with their product − see it, touch it, taste it, and have an enjoyable time while doing so. This “experiential” type of marketing has become so critical for some companies that they have commissioned social media influencers ─ individuals who have built a substantial online following as reviewers, bloggers, brand ambassadors, and thought leaders ─ to give their product(s) visibility.

Following are examples that span four different Food and Agribusiness sectors, and demonstrate how much visibility can be achieved with social media.

Dairy: something old feels “new” again

This past September, 21 year-old Kylie Jenner, reality TV personality and makeup tycoon, tweeted the following:

While this tweet might range from comical to astonishing, the impact of this tweet is likely more far reaching than you would expect. Breaking it down: Kylie Jenner has over 25.5 million Twitter followers that could have potentially viewed this tweet. For perspective, 25.2 million viewers recently viewed the ESPN broadcast of the College Football Playoff National Championship featuring Clemson against Alabama.

Is it a fact that Kylie Jenner had truly never eaten cereal with milk before, or perhaps just could not remember doing so since she normally eats dry cereal? Bottom line, it really doesn’t matter. What this young and popular Twitter user did was indicate that cereal with milk was well worth trying. And, while this single tweet won’t turn around the multi-year decline of milk consumption, it likely caused a respectable number of her followers to try cereal with milk again. And, since enjoyment of particular foods, especially basic, affordable foods, normally creates a pattern of consumption, chances are, the dairy industry will benefit.

Wine: focusing on the experience

Because social media provides a direct link between a business and its customers, the wine industry has rallied around social media since they frequently sell experiences such as private events at the vineyard, in addition to their wines.

Recently, one of our colleagues visited a winery that has only been in business for a few years. Prior to her visit, she did her usual website research, but found the winery’s website underwhelming. Therefore, she also expected the winery’s sales to be underwhelming. Instead, her research proved tremendous growth in sales across the few years they had been in business.
When our colleague sat down with the winery owners, she was astonished to learn that the winery had only one outside sales person, virtually no distribution, and also had never garnered attention via high scores in the most popular wine publications. So, she was certainly curious to learn how they had accomplished strong sales success.

The owners explained that their main marketing strategy was highly dependent upon social media to gain exposure for the winery and their wines. Through integrated use of both Facebook and Instagram, they strive to get individuals to visit their winery, and then ensure an amazing tasting event for every attendee. Once they have the captive attention of their visitors, the winery encourages them to become a member of their wine club, and counts on Facebook and Instagram to keep wine club members engaged by promoting winemaker dinners in key markets, new wine launches, winery news, and regular images of visitors and large groups enjoying their wines. And, of course, they hope that their wine club members will further share these posts to broaden the exposure.

The winery owners indicated that their wine club members have an average age of 30, compared to an industry average of 50-60 years of age. And, with this knowledge, and continuing success, the winery decided that marketing through traditional distribution and online via their website was non-essential.

Eggs: from ordinary edible to superstar

It’s not uncommon these days to sit down in a restaurant, only to notice someone snapping a cell phone photo of their just-delivered meal. Since humans are both visual and social creatures, food photo posting is considered great sport by “foodies”, and is changing consumers’ relationship with food. As indicated in the chart below, half of Americans now take pictures of their food.² And, most would agree that viewing a tempting photo and a few raves about a restaurant via social media automatically increases their consideration of that restaurant.

In 2018, the unsuspecting egg gained superstar notoriety in the UK, and growth in egg sales is being attributed in part to social media. Spending on eggs by the British public surpassed £1 billion for the first time in 2018, with 6.6 billion eggs having been purchased. This represented nearly a 5% increase in egg sales during 2018.³ UK egg supplier, Noble Foods, which owns egg brands including Happy Eggs, said, “[growth] was driven by eggs becoming a ‘highly desirable social media superstar’, particularly when rich oozing yolks are paired with items such as the ubiquitous avocado toast”⁴.

And, with the start of the New Year, it appears that the egg’s stardom has not faded. In mid-January, 2019, in the space of just over a week, a photo of a brown egg set a record as the most-liked post on Instagram ever, with more than 21 million people having hit the heart button to show their love for the oval-shaped object.⁵

After the brown egg went viral, social media users everywhere spurred on the visibility by creating all kinds of memes addressing the brown egg. #Egg had more than 6 million posts, and #EggGang had more than 28 million posts. Celebrities like Ellen DeGeneres even joined in on the social media fun surrounding the egg⁶.

It was all in good fun, including the original post of the egg, but in the end, who wins? Simple answer: poultry farms producing eggs.

Beef: niche cattle farmers make direct connection with niche consumers

Traditionally, cattle ranchers have had limited marketing options, and the majority of calves were sold at the local auction barn, or to brokers. Cattlemen wishing to create a niche, premium product, such as grass-fed or Wagyu beef, had few outlets due to lack of connection with niche consumers. The resurgence in local farmers markets helped with connectivity, but geographic limitations meant ranchers could still only touch a small percentage of end consumers.

Facebook is now providing ranchers with a direct connection to a large number of end-users since a sponsored ad can promote their niche-branded beef to thousands and thousands of Facebook users. And, a well-managed business Facebook page allows a rancher to continually communicate with, and engage, their core customers to keep their product top of mind.

As an added benefit of the Facebook engagement, end consumers satisfy two of the current food trends: 1) they gain the information about the origin of their food, and 2) they gain confidence that they are supporting area farmers and ranchers by eating locally grown food.

Social media exposure isn’t always positive

While we’ve illustrated four examples where proactive social media usage is furthering product visibility and resulting in sales, not all social media exposure is favorable. First, just as positive posts spread quickly via social media, so do negative posts. With the speed of information delivery, a company’s misstep and associated product recall can negatively taint a brand and tank its sales in no time.

Second, The World Economic Forum cited digital misinformation as a top global threat in 2018⁶. In today’s political climate, Americans have grown more skeptical of news gained via social media (and in reality, other forms of media as well; hence the popularity of the term “fake news”.) According to a 2017 survey, only 18% of Americans said they trusted news from Facebook most or all of the time⁶. But, the problem is that it’s sometimes hard to distinguish between credible and false news. To substantiate this point, A different survey from late 2016 gave respondents six headlines, three accurate and three false. Respondents judged the false headlines to be “somewhat accurate” or “very accurate” 75% of the time. This was only slighter lower than the 83% for the accurate news headlines.⁶

Unlike some higher profile subjects, such as politics, false information spread about food is lightly regulated. This creates a weakness for the Food and Agribusiness industry. And, so, the industry, and players within, should be cognizant of this threat, and remain committed to quickly address any issues that arise.

Conclusion

While social media remains baffling for many, and opportunistic for some, the reality is that social media is enabling a lot of consumer product companies to increase their brand visibility, heighten their perception, and generate revenues. Incorporation of social media in a marketing plan may or may not be a favorable tactic for all companies – it often comes down to the industry, type of product, competitive environment, and target market. Should a target demographic heavily focus on the younger generations, social media presence is likely a must to continue visibility and growth. However, if the target demographic also includes boomers and older generations, it’s important to keep in mind that social media is just one tool in the marketing toolbox, and a comprehensive marketing plan with many vehicles will be required to effectively reach the entire target audience.