Clean label opportunity: Kerry defines five behavioral consumer segments

12 Mar 2018

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12 Mar 2018 --- Kerry has unveiled its latest comprehensive clean label consumer research which defines five behavioral consumer segments, each with a unique outlook and opinion on clean label. The Irish food and nutrition giant surveyed 702 US consumers to better understand their opinions on nutrition, ingredients and sustainability, as well as how these factors influence their opinions on clean label.

The defined segments have different nutritional and functional need states, clean label requirements and purchase behaviors. Meanwhile, according to the in-depth research, there are similarities in clean label opinions but no “one-size-fits-all” solution.

Demand for clean products continues to grow
The clean label movement marks an undeniable transformation of consumers around the world, as was concluded in a Kerry webinar broadcast at the end of 2017. It is driving change within the food industry as a whole and catalyzing producers, manufacturers, retailer and foodservice operators to respond with new and improved products.

As the industry continues to evolve, understanding what consumers want has become critical to success and many food producers have published their no-no lists and clean label standards.

Kerry says that ingredients, nutrition, and sustainability provide the architecture for defining clean label products, which can include organic, natural, free from artificial ingredients and GMOs, low sugar, added functional ingredients and sustainable manufacturing.

The food and beverage industry needs a more granular view of consumer demands and priorities, according to Kerry, which has unveiled its in-depth report on Natural Products Expo West 2018 in the US.

Five consumer segments have emerged, differing in awareness, understanding, and importance of clean label as well as demographics and psychographics.

According to Kerry’s new report, understanding clean label behavioral drivers will help formulators develop targeted solutions that align with different consumer priorities and need states.

Kerry has broken it down into five segments which are as follows:
Label Seekers: Young, affluent and educated millennials from ethnically diverse backgrounds. They have a higher focus on certifications and claims. Clean label is extremely important to their lifestyle and they demonstrate a willingness to pay more (77 percent). They view their food choices as an extension of their image and social status.

Lifestyle Shoppers: Highly affluent, educated and older millennials and Generation Xers, who are predominantly white. Brand and store choice dictate clean label preferences. Already a clean label consumer and their choices are predominantly influenced by the natural and specialty stores they shop at and the brands they purchase.

Casual Investigators: This segment covers diverse age and financial groups, representative ethnic population. These consumers want to make healthier food choices and casually seek to know more about clean label and may be slow to adopt.

Wellness Watchers: These are older, female-driven, boomers plus, college educated and are typically white. They are interested in what’s on the label and making choices that are good for their health. Nutrition is the key priority.

Thrifty Traditionalists: This may be someone who believes “If anyone’s going to tell me what to eat, it’s my doctor.” Older, male-driven, boomers, retired, college educated and typically white. This segment is least likely to change current food habits. Unfamiliar with clean label and find it less important.

“The relevance of nutrition, ingredients and sustainability differ for each of the clean label consumer segments. Understanding the underlying need state is key to target these diverse consumer segments with specific clean label solutions,” says the report.

“The Label Seeker embodies the millennial generation, seeking products that are ingredient-safe, nutritionally superior, and sustainable. On the other end of the spectrum, a clean label solution for the Thrifty Traditionalist should focus primarily on the reduction or elimination of negative ingredients.”

The diverse consumer segments are at a unique point in their clean label journey, points out Kerry, breaking it down as follows:

• Label Seekers are current consumers of clean label.
• Lifestyle Shoppers have unconsciously been the pioneers of the clean label lifestyle based on their brand and shopping habits, rather than careful label consideration.
• The Casual Investigator seeks ingredient acumen.
• Wellness Watchers demand nutritionally geared clean label solutions.
• Thrifty Traditionalists are the last to jump on the clean label wagon.

“Understanding these diverse consumer segments to develop targeted clean label solutions will help brands differentiate in a crowded marketplace,” the report continues.

Speaking to FoodIngredientsFirst, Soumya Nair, Director of Marketing Insights, Kerry said: “The consumer segmentation reveals underlying motivations and needs states that trigger specific food and beverage purchase behaviors. A singular revelation of the segments depicts the heterogeneity of Clean Label that exists among Americans. Leveraging the unique priorities of each of the segments with regards to nutrition, ingredient specificity, and origin will reveal opportunities to the industry; for instance, targeting nutrition specific Clean Label benefits to the Wellness Watcher or appealing to the Casual Investigator with specificity and information.”

The five consumer segments are on a Clean Label adoption curve that discloses their current Clean Label state of mind. Current product messaging, claims, and certifications resonate most with the Label Seekers who soak in media information and are quick to adopt new food and beverage trends. Alongside the Lifestyle Shoppers, the Label Seekers have a clearer expectation from food and the industry; and influence manufacturers to make changes to their portfolio and/or formulation. While the Thrifty Traditionalists are the hardest to adopt a Clean Label Lifestyle, the remaining two segments (Casual Investigators and Wellness Watchers) offer a great opportunity for manufacturers; who can cater to their needs with education and nutrition-focused benefits.

“It is a challenging time as the industry begins to respond to consumer expectations of Clean Label. With ingredients being top of mind and front and center of the product formulation, reformulations will play a big part,” Nair explains. “Suppliers will play a critical role in guiding their customers in their Clean Label transformation by providing insights into consumers, expertise in reformulations, and most importantly with ingredients that are traceable, sustainable, and safe.”

However, The Clean Label transformation of the food industry is no longer only about removing unacceptable ingredients but encompasses nutritional benefits as well as sustainability. Suppliers and manufacturers are in a unique position to influence what Clean Label will look like in the future. “There is an opportunity to clean up labels, and additionally offer a truly Clean Label product to the consumer who expects healthy, nutritious, and wholesome food,” adds Nair.

Kerry’s research was conducted last year with the goal to determine consumer preferences with a mix of quantitative and projective/qualitative techniques used to explore the topic. The respondents were primary shoppers who were "ingredient-conscious": i.e., they paid attention to the product label and considered ingredients while grocery shopping.

Just last month, the Kerry Group reported higher earnings and revenues for 2017 with “mindful” eating driving growth. Revenue at the Irish food technology and ingredients company increased by 4.5 percent to €6.4 billion (US$7.9bn) and adjusted earnings per share rose by 5.5 percent to 341.2 cents. The company benefited from a 4.3 percent growth in its business volume.

By Gaynor Selby