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NATIONAL REPORT — When buying food and beverages, the traditional drivers of taste, price and convenience are still important to American consumers, but a new set of factors is also emerging.
According to the findings of a new study conducted by New York-based Deloitte, the Arlington, Va.-based Food Marketing Institute (FMI) and the Washington, D.C.-based Grocery Manufacturers Association (GMA), roughly half of Americans surveyed (51 percent) weigh “evolving drivers” — including health and wellness, safety, social impact, experience and transparency — in their purchasing decisions, in addition to the traditional drivers of taste, price and convenience.
The study, entitled “Capitalizing on the Shifting Consumer Food Value Equation,” also revealed that this new reality is true regardless of demographic factors.
“Contrary to conventional wisdom, it’s not just the millennials or most affluent putting these evolving drivers in the mix,” said Jack Ringquist, principal and global consumer products leader for Deloitte Consulting LLP. “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 U.S. 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.”
The joint Deloitte, FMI and GMA study addresses several implications of the shifting value equation for the food and beverage industry — one where some brands will “double down” on their strengths and focus more specifically on the more-traditional needs, while others will invest more and explore evolving needs. These implications include:
- Consumer tastes and preferences will continue to fragment.
- Retailers’ role influencing consumer purchase decisions will continue to increase.
- Smaller, newer companies will leverage new technologies, third-party relationships and improve engagement to earn consumer trust.
- Larger competitors within the industry will adjust to fulfill new, unique value propositions.
- Market success will be determined by building purpose-driven competitive advantages.
“Food retailers are inherently ‘shopper advocates,’ and they respect that their customers want both genuine and transparent shopping experiences,” said Mark Baum, FMI's chief collaboration officer. “Our study sheds light on how companies can better understand the intersection of these new consumer food values and their own growth strategies.”
The study also showed a shift in the way people think about food safety. Americans no longer define the concept of food safety based on near-term risks to their health. Instead, nearly three-quarters of the consumers surveyed (74 percent) believe that a definition of food safety limited to “one that will not cause any immediate, physical harm” is insufficient.
Consumers now link health, wellness and transparency with their definition of food safety, Deloitte said, and include factors such as "free from harmful ingredients" (62 percent), "clear and accurate labeling" (51 percent) and "fewer ingredients, processing and nothing artificial" (42 percent).
“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,” said Jim Flannery, senior executive vice president, operations and industry collaboration for GMA. “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.”