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Study: Transparency increases brand loyalty among grocery shoppers

Article-Study: Transparency increases brand loyalty among grocery shoppers

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Research from Label Insight and Food Marketing Institute found that customers trust transparent brands and will pay extra for products that provide more information.

Grocery shoppers exhibit loyalty to products that create deeper relationships through information exchange, a new report from Label Insight and Food Marketing Institute (FMI) revealed.

The Transparency Imperative report found that 75 percent of shoppers are more likely to switch to a brand that provides in-depth product information beyond what’s provided on the product’s label. When shoppers were asked the same question in 2016, just 39 percent agreed they would switch brands.

FMI, with support from Label Insight, developed this report to define what transparency means to shoppers and how it impacts their food retail purchases. The Transparency Imperative further delves into different attitudes and behaviors among health-conscious shoppers, digitally engaged shoppers, and various generations of shoppers. 

Recognizing these consumer audiences, the report recommends the steps brands should consider to further embrace transparency; relay information beyond just ingredients; understand the specific needs of key shopper groups; meet the increased expectations of online shoppers; and track changing consumer preferences as this trend progresses.

In the report, 86 percent of shoppers agreed that if food manufacturers or retailers provided access to complete and easy-to-understand definitions for all ingredients, it would create more trust. Nearly as many shoppers, 80 percent, said they are more likely to be loyal to a brand that provides more in-depth information. More than half of shoppers (54 percent) said they are willing to pay more for a product that has additional product information.

“The new shopper mindset requires brand owners to think about their products well beyond the traditional label and respect a more digitally-minded consumer,” said Doug Baker, FMI vice president of industry relations. “The study offers several considerations for how to make the best use of these findings, but overall, they require companies to recognize and communicate the importance of transparency and perform a thorough review of their unique consumer audiences and commerce channels.”

What is transparency?

The vast majority of consumers (69 percent) said it is extremely important or important that brands and manufacturers provide detailed information such as what is in their food and how it is made. Interestingly, online shoppers (80 percent), college graduates (76 percent) and higher grocery spenders (75 percent)— those who spend $125 or more per week—were more likely to agree with this sentiment.

When asked to further define what elements define transparency, older generations (baby boomers and Generation X) are more likely than millennials to focus on a complete list of ingredients, ingredients descriptions, and nutritional information. Millennials also focus on these indicators, but they are more likely than older generations to look at allergen information, certifications and claims, explanations of ingredient usage information, and other details such as animal welfare, fair trade and labor practices.  

“We titled this report The Transparency Imperative because as we executed the research to bring the key findings of our 2016 studies current, we see clearly that transparency is only becoming more important to consumers,” said Patrick Moorhead, chief marketing officer for Label Insight. “Their attitudes and preferences, particularly with the growth of e-commerce, make it clear that transparency is critical to growth and our industry must take action.”

The research is based on an online survey of a random sample of 2,022 U.S. grocery shoppers who are 18 years of age or older. The research was conducted via an online nationally representative sample from May 15 to 22. The report can be downloaded for free.

Source: Food Marketing Institute 

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