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The Good Grain Company - an online Retailer Case Study

Autor:   •  May 28, 2018  •  5,947 Words (24 Pages)  •  290 Views

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ii. Increasing awareness of food intolerances7

Diagnosis of celiac disease and gluten-intolerance has grown, as awareness by both consumers and health professionals has increased. Organizations like the Canadian Allergy Association inform consumers on allergies and sensitivities, as well as alternatives to common foods; as a result, the gluten-free product market has experienced growth. More than 15% of North American households use gluten-free products, and over 15% of consumers eat gluten-free as part of a healthy lifestyle, not necessarily because of dietary restrictions. 13% of consumers buy gluten-free products for non-medical reasons as a result of consumers’ perception that gluten-free is healthier. Between the increase in the prevalence of allergies and the growth in health-conscious consumer buying power, gluten-free products are expected to rise, along with other health food items.8

Consumer Analysis

Primary Target Market

The Good Grain targets a category of health conscious individuals commonly referred to as the LOHAS market, an acronym for Lifestyles of Heath and Sustainability.9 LOHAS is a niche market in which consumers prioritize health, fitness and self-improvement.10 They are interested in both organic and green products as well as dietary supplements. Individuals of the LOHAS market always invest in healthier alternatives and this trend has grown substantially as 58% of Canadians are more inclined to buy healthier versions of food products.11

Within the LOHAS market, there is a group known as gluten-avoiders who, despite not being medically allergic or sensitive to gluten, choose to buy gluten- free products as a result of the perceived health benefits. According to Agriculture Canada, gluten-avoiders account for 22% of Canadians.12 Teff’s high-quality nutritional value matches gluten-avoider food preferences as it offers a healthier, gluten-free substitute for starchy grains and unhealthy baking flours. Approximately 33% of gluten-avoiders have mentioned a willingness to spend more for a healthier product and accordingly, The Good Grain targets gluten-avoiders as users of healthy substitutes in common recipes13.

Secondary Target Market

The Good Grain recognizes the need for gluten-free products for consumers who suffer from gluten allergies or sensitivities and require a lifelong gluten-free diet. Celiac disease is the driving force behind gluten-intolerances and affects approximately 1% of the population, or 340,000 Canadians, while gluten-sensitivities affect 6% of Canadians.14 This market relies on gluten-free items to substitute for wheat products. The Good Grain effectively targets individuals with gluten intolerances by providing a nutritious and delicious replacement that suits their dietary needs.

Why We Appeal to Both

i. Strong Online Presence

The Good Grain prides itself on its quick, straight-to-your-door delivery system, and its easy accessibility through its user-friendly online store and straightforward, efficient ordering process. Additionally, as 47% of Canadian consumers conduct online searches of products they are interested in, it is paramount to build and maintain a strong online presence to remain competitive.15 The Good Grain has done so through up-to-date website maintenance and excellent online customer service that delivers immediate responses to customer inquiries.

ii. Sustainability & Corporate Responsibility

At The Good Grain, we believe in a ‘give back’ philosophy toward social welfare. The Good Grain's primary target market, the LOHAS group, values environmental safety, sustainable living, and social responsibility and justice.16 Approximately 55% of Canadians purchase or would purchase one product over another based on which brand demonstrated a philosophy dedicated to social responsible and/or sustainability.17 To appeal to our targeted audience, The Good Grain has created an initiative whereby 1% of annual profits will be donated to the Ethiopian farming communities who manufacture our teff. We have partnered with the Sasakawa African Association, an organization dedicated to raising money for underprivileged African farming communities and ensuring “a more food-secure rural Africa with increasing numbers of prospering smallholder commercial farmers”.18 This initiative, of which consumers can receive more information from our website, illustrates The Good Grain’s ‘give-back’ philosophy, and will generate greater market appeal.

Competitive Analysis

Direct Competition

The Good Grain’s direct competition is teff retailers such as Bob’s Red Mill and TeffCo. Bob’s Red Mill is a well-established international brand with a strong online presence that has experienced significant sales of both grain and flour teff. Each 24oz bag is sold online for $6.39 and $7.29 in grain and flour form respectively. Bob’s Red Mill sells wholesale to Bulk Barn and Loblaw’s. Bulk Barn sells teff in flour form only, while Loblaw’s retails Bob’s Red Mill’s teff in both grain and flour. Bob’s Red Mill does not exclusively sell teff but rather, it offers a wide variety of grain products founded under the philosophy of “preserving nutrition through tradition”.19

Indirect Competition

Our indirect competitors are other types of gluten-free grains and flours. Quinoa has been a force in the health food industry for almost a decade and its price continues to rise as demand increases. Quinoa is comparable to teff in grain form, as both are versatile products, and both can be used as a wheat substitute in similar ways. Quinoa appeals to the health-conscious consumer and, as result of its growing popularity, the grain is sold by many brands and is available at most grocery stores.

Gluten free flours occupy the same niche market as teff flour. Most grocery retailers offer a variety of gluten-free flours made by both health food brands, like Bob’s Red Mill, and regular household brands, such as Robin Hood.

Bob’s Red Mill’s quinoa and gluten-free flours pose a potential threat to The Good Grain. It is sold at major grocery retailers, and holds a significant share of the market as a result of its established brand and extensive company exposure. While several gluten-free substitutes exist, The Good Grain does not have much competition in the area of teff and teff flour other than Bob’s Red Mill and TeffCo.

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