Parents want healthy products for their children. People like tasty food. And baby boomers are acutely aware that time is not on their side.
We've heard all this before. Is there any new news in the world of consumer research? What are consumers looking for?
They want convenient, healthy, tasty, low-cost food that somebody else prepares. Can your store provide that?
"You have to know who your shoppers are, and how they would define value," said Michael Sansolo, senior vice president at the Food Marketing Institute in Washington, D.C. Even premium products like organic produce and specialty groceries can factor into a customer's value equation—if you define "value" as a part of one's personal creed, and not just by how much or how little they want to spend.
That said, money is still on most consumers' minds. "The mood has been very clear for months," Sansolo noted: Recent global events have made shoppers wary, weary and a little freaked out.
Cutting costs is the biggest motivator among average mainstream consumers, according to research conducted by Marketing Analysts Inc. and presented at FMI's annual conference in Chicago in May. To save money, folks are doing everything from clipping coupons and looking for specials to making value retailers like warehouses and Wal-Mart part of their weekly shopping rounds.
"The No. 1 story is how the retail channels are shifting," said food industry consultant Phil Lempert of Santa Monica, Calif.
A February report from McKinsey & Co., "Competing in a Value-Driven World," found that across demographic categories, consumers are shopping more often and spending more money at value retailers. Even consumers who identified "quality" as their primary driver of store choice reported spending 17 percent of their weekly grocery dollars with value merchants, who have doubled their share in the last decade.
Some categories, including baby goods, health products and pet care, have "gone to value," and McKinsey advised conventional retailers to let them go, adjust their pricing and shelf-space allocation, and devote their energy to their core competencies and the "battleground categories" like cereal, meats and dinners, pasta and bakery.
Natural retailers may find this advice less threatening than mainstream supermarkets will. "Natural foods merchants have a built-in niche simply because of what and who they are," Sansolo said. The natural channel customer is more loyal than the mass-market shopper, and more likely to define "value" in terms of healthy, fresh food; minimally processed packaged goods; and locally grown products.
On the other hand, mainstream supermarkets are gunning for natural merchants' customers, grasping for the high margins of natural and organic foods, supplements and personal care products. As value grocers take market share from conventional grocers, so conventional grocers may be out to take share from you.
Consumers will stick with you, experts say, if your store offers them a valued experience they can't get elsewhere.
"Be famous for something," Sansolo said. "A natural foods store may start out with that going for them already. Understand what makes you successful today."
Savvy retailers, Lempert said, worry less about shaving a penny off prices and more about achieving the right product mix, cheerful employees and smart merchandising. McKinsey consultants advised, "Get credit from the consumer for value delivered."
In other words, make sure customers are very clear on your pricing of the key items they use to compare overall store pricing. One way is to include them in the discussions of promotional and assortment strategies that often are limited to manufacturers and retailers. Ask them what they want.
"It's not the product," Lempert said. "It's how people feel when they go into your store that makes the difference, and the retailers who get this are the ones who will succeed."
So what makes consumers cheerful? More than half of American households represent what the The Hartman Group, based in Bellevue, Wash., calls "midlevel" organic consumers. They make regular purchases of organic and natural products, are building a list of preferred organic brands and want to learn more about how to eat.
Bill Shepherd of The Hartman Group told a session at Natural Products Expo West in March that core organic consumers respond most strongly to messages of authenticity, knowledge and brand, and less to those about convenience and price. Peripheral consumers—the 37 percent of American shoppers who really don't know beans about organics—are all about convenience and price, and midlevels move back and forth, depending on the item.
Information Research Inc. estimates that one of every five meals is eaten on the run. Helping this trend along is the small appliance business, which, according to the Wall Street Journal, is rolling out gadgets to facilitate car cuisine: coffee mugs and teensy fridges that plug into the dashboard; blenders and coffeemakers that dispense into mugs that are sized to fit in a cupholder.
At the other end of a busy family's day, prepared foods ease the transition back into the house. "Fast healthy food" has been flying out the door at Cream of the Crop, a natural products store in Oceanside, Calif., said owner Diane Najjar.
A recent presentation from ACNielsen pointed out that half of all heads of household are too tired to cook a real evening meal every night, and two-thirds are looking for faster ways to do household chores. Nielsen said shelf-stable entrées are up significantly (up 66 percent year-over-year as of fall 2002), as are refrigerated entrées (a $1 billion category, up 20 percent); frozen biscuits, rolls and muffins (up 56 percent); and breakfast bars (up 26 percent). Single-use cleaning products like antibacterial wipes and mops have been a huge hit on the mainstream side, up 54 percent.
With new support for the connection between diet and health hitting the news wires on a daily basis, another driver, according to FMI's Sansolo, is "the concern of Americans for how they are eating. They want to eat better; they're struggling about how to do it."
Store manager Jim Goddiess of Sandy's Fine Foods in Westerly, R.I., sees customers trying to teach their families better eating habits at the same time as they improve their own. "They're coming in and they're reading the labels, not only for themselves but for their children."
Supermarket guru Lempert said he believes consumers remain confused by the National Organic Program, but he also thinks concerns continue to mount about health claims, food safety, irradiation and GMO issues. "We're going to see a rise in consumerism. Questioning of our food products is reaching the mainstream," and those questions may bring new consumers into natural foods stores.
"Treat the organic consumer as mainstream and pragmatic, not idealist or extremist," said Shepherd, and they will treat you as a trusted wellness provider.
At the same time, however, we're witnessing the redemption of forbidden foods: Meat is back. Butter is back. Bacon, of all things, is hip. The well-adjusted retailer will reward indulgence as well as healthy living, said Kevin Coupe of MorningNewsBeat.com.
"The people with the money are still spending it," Goddiess said.
Like the urge for value, these factors cut across demographics. And like value, they succeed if you meet the customer where he or she is, rather than trying to transform your store into something it's not in an attempt to beat the big value boys at their own game.