We’ve seen a plethora of articles lately talk about the rising cost of food and drink and how inflationary pressure will impact on household spending. Much of this discussion has focused on understanding how much value and volume is being lost as a result of people trading down from brands to own label, from mainstream to discount retail, buying more on promotion or minimizing expenditure in other creative ways, such as cooking from scratch and substituting out of home eating with in-home meals.
Our own research earlier this autumn showed an increase in the variety of tactics people are using to save on Food and Drink. We also saw a significant increase in number of people looking for offers as a way to reduce their expenditure. At the same time, over a third of consumers are taking more drastic measures, such as reducing quantities of food consumed in order to save, while 6% of the population have become users of food bank services.
Much less focus has been dedicated to these consumers who are already shopping at the ‘cliff edge’. In recent qualitative research we have come across several consumers who have already exhausted all available avenues to minimizing expenditure, yet prices in stores are still going up, even at the discount end of the market.
In such circumstances we are seeing these consumers spend inordinate amount of time doing their weekly shop, comparing prices across a range of retailers, only buying own label or brands on promotion. Some households avoid going to stores in person and prefer to shop online because price comparison is easier and carries no risk of embarrassment if needing to put things back as the weekly budget has been reached.
Uniquely, we also see a variety of entirely new considerations impact on shopper behavior. For example, in relatively expensive categories, such as meats, cooking time and method have now emerged as major influencing criteria. If a cut of meat takes longer to cook, even if perhaps affordable on a price per KG basis, it is likely to be dismissed. Similarly, forward planning in meal preparation will see the same heated oven being used to cook meats and produce for several different meals.
As alluded to in our previous article, consumers are no longer focused on price alone and are looking for more novel ways to save money. The industry commentary has led many manufacturers focus on price and promotions as sole tactics, while not enough attention is dedicated to finding different ways in which products can help save the consumer money more holistically. For example
- Are there parbaking solutions that can be introduced that means end consumer investment in electricity is kept at minimum?
- What temperature are my products cooked at – does this prevent people from using the oven for other meals?
- Can I provide alternative temperature/cooking time scenarios so that consumers can adjust cooking to optimize oven usage?
- Can my product be stored in ambient conditions as opposed to fridge/freezer, saving this space for other products?
- Is there a Sous Vide application available for my products that helps minimize long cooking times?
- Are there improvements that I can make to my product that significantly enhances its viable shelf-life?
Expanding on this line of thinking is something we would advocate, and if you do find that you have genuine added value to offer, we recommend you focus on communicating the holistic value of your product. While distressed consumers will dedicate vast amounts of energy in researching most cost-effective solutions, there are many more consumers who are merely scanning price and promotional labels and decide on the basis of very limited information. Successful brands will need to cut through this ‘auto-pilot mode’ and communicate on benefits beyond price.
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