Moore’s Law:
Food consumption is changing, Moore’s Law for computers predicted (accurately) the ever expanding affordability of computers. Now, it may be time to stop adding ‘more’ and start to concentrate on value?
Gordon Moore made his famous observation in 1965, just four years after the first planar integrated circuit was discovered. The press called it “Moore’s Law” and the name has stuck. In his original paper, Moore predicted that the number of transistors per integrated circuit would double every 18 months. He forecast that this trend would continue through 1975. Moore’s Law has been maintained for far longer, and still holds true today.
Intel Corp. Moore’s Law. URL: http://www.intel.com/research/silicon/mooreslaw.htm
How does this effect the food industry?
The virtuous circle of added features = added cost for premium food is been challenged. Moore’s law for computers maintained that costs would remain stable while benefits continue to increase. With food this is not the case, largely this is due to scalability, most premium food is produced by relatively small producers who are unable to increase production without compromising.
2009 is going to be a very challenging year for small to medium sized producers, find ways to maintain the origins of what makes their product special and make afforable is going to be their greatest challenge.
Personally, focusing on what make is special has got to the priority, but finding way to become more efficient is absolutely critical.
Analyses ALL costs, a number could be shared with other like minded business that have similar challenges. Costs that ‘behind’ the product; sales, admin, transport, bulk buying packaging and ingredients.
There is likely to 5 to 10% deflation in fresh food 2009.
Ignore Moore’s Law at your peril if you are food producer – re-alignment with consumers is urgently needed to stay with their new financial reality.
Rob Ward
http://www.foodmarketingnetwork.com/services
