US Consumers are Switching Focus to Transparency and Health & Wellness, Says Report
27 Jan 2016 --- Consumers are placing an increasing fixation on transparency and health and wellness when buying products at the expense of traditional factors, such as price and taste, according to a new report.
The report, called “Capitalising on the Shifting Consumer Food Value Equation” has been published by accountancy firm Deloitte in consultation with the Food Marketing Institute (FMI) and Grocery Manufacturers Association (GMA).
Its publication comes amid a struggling US food and beverage market where consumer spending remains broadly flat.
The report has identified a raft of new purchasing decisions, such as health and wellness, safety, social impact, experience and transparency, as key motivating factors behind today’s consumer spending.
These new factors, replacing the traditional motivating factors of taste, price and convenience, are forcing marketers from companies like PepsiCo, Coca-Cola and Mondelez to change their focus.
Jack Ringquist, the global products leader for Deloitte, said: “Contrary to conventional wisdom, it’s not just the millennials or most affluent putting these evolving drivers in the mix.
“Our research reveals that the preference for these attributes does not differ by generation, income level or region, but is pervasive across these groups. The US consumer has changed in a fundamental and impactful way, and people’s preferences are becoming even more fragmented than the food industry may have anticipated.”
In total, the wide-ranging research polled 5,000 consumers, and interviewed top executives from 40 companies.
According to the study, marketers face an added challenged that these new motivating factors are not easy to define.
For example, health and wellness is not solely focused on nutrition and health but consumers also weight in factors such as whether the product contains organic and natural ingredients it contains.
Likewise, consumers deem the safety of a product to refer to a swathe of factors such as the absence of allergens and the accuracy of the labelling.
Transparency, which consumers equate with companies offering clear labelling and trusted certification, was pinpointed as an “overarching” influence on today’s consumer behaviour.
The changing landscape, according to the report, will lead to consumer tastes being more fragranced, which will offer ample opportunities for manufacturers if they can produce new technologies to meet changing consumer demands.
Those manufacturers which will win out will be ones that provide added value, according to the report.
Jim Flannery, senior executive vice president of operations and industry collaborating with GMA, said: “Today’s consumers have a higher thirst for knowledge than previous generations and they are putting the assessment of that information into their value equation.
“There is no doubt that the consumer value equation has changed — as taste, price and convenience are now only the foundation with the need to leverage the emerging value drivers. Brands that win with consumers will likely be those that provide the information they seek, well beyond what is on the label.”
By John Reynolds
