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More consumers favor evolving preferences such as health and wellness, safety and social impact on their path to purchase, and both retailers and manufacturers need to respond accordingly.
That’s the overall message conveyed by the results of a study conducted by Deloitte Consulting, the Grocery Manufacturers Association and the Food Marketing Institute, and discussed during the second day of GMA’s Leadership Forum this past weekend at The Broadmoor in Colorado Springs, Colo., in a session entitled, “Driving Growth Among Disruption: Capitalizing on the Shifting Consumer Food Value Equation,” moderated by FMI SVP Mark Baum.
The study, which included more than 5,000 consumers and 40 industry executives, revealed that more consumers are including a wider set of drivers in their purchasing decisions. These “evolving” drivers – health and wellness, safety and social impact” are overtaking the historic drivers of taste, price and convenience as the leading reasons for choosing particular products over others.
Deloitte’s Tom Phillips sees the shift as a “big, nuanced” move toward these new drivers. Overall, 51 percent of consumers surveyed emphasized these evolving preferences more heavily over traditional drivers, Phillips noted.
Perhaps most significantly, this shift is consistent across all ages, income levels and geographic regions. For example, these evolving drivers are cited by 52 percent of consumers age 18 to 34 and 35 to 49, and 51 percent of those age 50 to 80. Further, consumers are defining “safety” as being free of harmful or artificial ingredients, clean labeling and nutritious content.
“It’s not a niche area for business – it’s something that needs to be addressed,” said panelist Beth Ford, EVP and chief supply chain and operations officer for dairy co-op Land O’Lakes.
Carolyn Sakstrup, VP of Target’s guest center of excellence, noted that Target is forging partnerships with multiple manufacturers to create products for its “Made to Matter” brand that address these in-demand product attributes.
Jim Borel, EVP at DuPont, asserted that transparency is essential in this new normal: “If you don’t provide the information, consumers assume the worst.” Ford argued that technology in food makes consumers uncomfortable: “It’s a marketing and communication challenge, because the facts are quite friendly.”
Rob Aukerman, president of North American commercial operations for Elanco, warned against overreacting to preference changes lest manufacturers invest heavily in what may turn out to be soft trends. Aukerman argued that the study results demonstrate a demand “for choice in the marketplace.”
In response, Borel urged manufacturers and retailers “to work together to tell these great stories in a way that resonates with consumers.”
That will ultimate determine who wins and loses in the years to come, as good communication will define what a company is to consumers, Ford said, and success will belong to “the companies that are the most agile in responding to consumers.”
Sunday’s other concurrent sessions included “Using Digital to Enhance the CPG/Retailer Partnership” and “Leadership 2020 and Beyond.”