Brands vs Price

An interesting piece of research from MarketingCharts.com:

Food Brands Losing Relevance; Consumers Demand Healthier, Lower-Priced Choices

Today’s consumers want to have a greater say about food ingredients, safety and quality, and believe food companies should be responsible for keeping people healthy and addressing societal nutrition issues, according to a recent study of consumers in five countries by Ketchum.

The “Food 2020: The Consumer as CEO” study examined the perceptions, expectations and considerations about food among consumers in the the US, UK, Germany, Argentina and China, and sought to provide an outlook on the food industry by the year 2020.

At least half of the 1,000 consumers surveyed say they want more consumer involvement in the use of ingredients and additives; the source of ingredients and the treatment of animals; nutritional content; and who should be responsible for food safety and quality.

With the exception of China, fewer than one-third of consumers are interested in being involved in making food easier to prepare or shop for.

Consumers around the world expect food companies to be responsible for their health and well-being, the survey found. Across all countries, 75% respondents say they would like to see food companies place a great emphasis on creating foods that reduce the risk of major health issues in the future.

Additional findings and country differences:

• Taste, quality and price are the top consideration in choosing foods, except in China where health benefits are most important. Across all countries , 74% of consumers cite taste as a key consideration, but China gives taste least consideration (69%). In China, 78% of consumers said “health benefits” are key, compared with just 53% of respondents from other countries.

• Knowledge, taste and availability are key barriers to healthier eating. When asked what factors, beside cost, prevent them from buying healthier foods, 44% of consumers cite “knowing what’s truly healthy;” 43% cite taste; and 35% cite availability. Consumers in Germany, Argentina and China are more likely to cite knowledge as a barrier, while consumers in the US and China cite taste. The top barrier in the UK is availability.
• Consumers want good taste, but also want to know more about their food. In all countries surveyed, 63% of consumers want to be able to recognize all of the ingredients on a food label and 34% want foods to be made with as few ingredients as possible. Concern about what’s on the label is highest in Argentina, where 73% want to recognize all the ingredients. Consumers in China are least concerned about recognizing ingredients, though still more than half (52%) want to.
• Brands are losing their relevance -except in Argentina and China. Only one-third of consumers cited “brand name” among factors they consider when buying food. Brand name lags well behind factors such as quality, price, health benefits, value, convenience of preparation and taste. In both Argentina and China, 45% of consumers said brand was a key factor.

• Consumers want local food, but they’re not willing to pay for it in terms of either cost or taste. Two-thirds (66%) of consumers think at least some of their foods are from other countries, but just 17% of consumers said they “don’t care where food comes from” as long as it’s affordable and tastes good. Consumers in Argentina are the most likely to care about food sourcing, with more than 60% disagreeing with the idea that taste and cost trump food origin. Consumers in China are the least concerned about sourcing, 30% agreeing that they “don’t care where food comes from” as long as it’s affordable and tastes good.
• Consumers think food companies should help solve societal issues related to food and nutrition, and they are willing to pay for it - within reason. Globally, more than 40% of consumers said they would be likely to pay more for food if it would improve the quality of water and food and bring medicines to those in need. Consumers in China and Argentina generally are more willing to pay for food if it could help others around the world. Sixty-five (65%) of consumers surveyed said that “improving human nutrition” would be their top priority if they were CEO of a global food company. “Making food that is safer” is a a close second (64%); and “making foods that taste great” is the third-highest priority (52%).

• Consumers want food companies to take away the temptations that lead to obesity, but don’t want to eat less. Forty-five percent (45%) of consumers think food companies should play a role in addressing obesity, with more than half of those in Argentina and the UK holding this view. 63% of consumers believe food companies should help reduce obesity by decreasing junk foods; while just 21% think companies should reduce portion sizes. 56% of consumers think companies should help reduce the risk of major health issues and disease by making foods with more nutrients per calorie. Consumers in Germany and China aremore likely to think that food companies should try to reduce health risks by linking good food choices with lower healthcare costs.

The 2020 Food Landscape

Consumers expect how they choose and shop for food to be different by 2020, but they still expect food companies to be responsible for their health and well-being:

• 43% of consumers believe that the kinds of foods we eat in the year 2020 will be different than what we eat today.
• 39% believe the way we shop for food will be different.
• 56% would like to see the food industry come up with easier ways to identify healthy foods on restaurant menus
• 53% would like restaurants to offer healthier foods.

“Consumers want more information about ingredients and health benefits from both supermarkets and restaurants,” said supermarket expert Phil Lempert, who helped Ketchum develop the survey and analyze the data. “Food companies should be aware of these expectations as they focus on product development in the future.”

While 78% of consumers say they would like to get their foods from local farms or companies by the year 2020, most expect even more of their foods will come from other countries by then - with 34% of consumers expecting most or all of their food to be imported by 2020, compared to 21% who think most or all of their food is imported today.

“Food companies often ask consumers about food preparation and convenience, but the areas where consumers want more control are the ones where food companies are least likely to seek consumer input,” said Linda Eatherton, partner and director of Ketchum’s Global Food & Nutrition Practice. “These survey results indicate that food companies are asking the wrong questions.”

About the survey: The survey polled 1,000 consumers in the US, UK, Germany, Argentina and China and included 200 respondents from each country. Among respondents in China, half resided in cities and the other half resided outside of cities. The survey was conducted through online distribution at various times in each country, with all taking place between the end of July 2008 through the end of August 2008.

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