Will consumers maintain natural products industry values as times change and new challenges such as coronavirus emerge?
New Hope Network NEXT Data and Insights and Informa Health and Nutrition seek to answer questions like this with new tools launched during the COVID-19 crisis.
Here’s a look at the new natural consumer behavior indexes and what natural products industry professionals can learn from them.
Natural products industry consumer behavior indexes
What are the natural consumer behavior indexes?
The natural consumer behavior indexes measure any changes to self-reported consumer behavior happening during the coronavirus pandemic.
Why establish these indexes?
Business plans and models require deep marketplace understanding. COVID-19 has caused massive disruption to nearly all market aspects CPG brands operate within; and the rapidly evolving nature of the pandemic is causing nearly continuous changes to already disrupted markets. Improved access to information about the market will help businesses to make more efficient and effective decisions and this will help the entire industry better serve customers and create greater stability and certainty throughout the supply chain. These indexes were created to track consumer behavior as they adjust and adapt through these uncertain times. We have existing pre-coronavirus survey data that measure these same core consumer behaviors, so it’s a perfect opportunity to track consumer behavior changes compared to a benchmark.
Please describe what NEXT Data and Insights is measuring. Is it behaviors or attitudes? What’s the difference?
Ultimately, behavioral data reflects observed results from the marketplace with measures such as point-of-sale retail sales. When this data isn’t available or doesn’t monitor customer behavior, market observers often turn to survey data. In the survey world, researchers often measure consumer values (long-term qualities guide judgment of right and wrong, good and bad), attitudes and beliefs (more malleable or flexible likes and dislikes that can shift through time) and self-reported behaviors (statements of what one has done or tends to do). These indexes measure self-reported consumer behavior.
Why should natural products industry businesses watch these indexes?
Well, it’s important to assess the overall health of the industry and a view into consumer behaviors is one data point to keep monitoring. It’ll help give brands, manufacturers, other stakeholders, a good understanding of how consumers could be shifting. And when we see some dramatic shifts in the index, NEXT Data and Insights and the Informa Health and Nutrition teams will dig in further to surface additional insights to explain the changes. Watch for insights in the weekly Natural Products Industry Health Monitor and other content on sister websites including newhope.com, naturalproductsinsider.com, foodbeverageinsider.com and vitafoodsinsights.com.
How did NEXT Data and Insights develop the indexes?
This is born out of years of understanding and watching the natural products industry evolve. There are various behaviors that NEXT Data and Insights researchers monitor and assess, and the team has identified eight behaviors that appear to be drivers of natural products industry growth and consumer engagement.
Let’s break them down one by one.
- What does the total consumer natural products industry (NPI) behavior index measure?
The total consumer NPI behavior index is an aggregation of core consumer behaviors that drive natural products industry growth. Within the index are eight behaviors that get rolled up into the total consumer behavior index. Represented as statements such as, “I am willing to pay more for environmentally responsible practices or socially responsible practices” or “I pay more for high-quality ingredients and prioritize natural brands and ingredients.” Ultimately there are eight statements consumers evaluated based upon the degree to which each statement reflects their behaviors. These eight statements are then grouped into three aggregate measures of eco-social behaviors, nutritional quality behaviors and a total score.
- What does the eco-social consumer behavior index measure
The eco-social consumer behavior index measures environmental, community and other externally focused behaviors:
- I believe buying can be a moral decision.
- I am concerned with how livestock are treated.
- I am willing to pay more for products that demonstrate socially responsible practices.
- I am willing to pay more for products that demonstrate environmentally responsible practices.
- What does the nutritional quality consumer behavior index measure?
The nutritional quality consumer behavior index measures personal health and other internally focused behaviors:
- When making food choices, I prioritize natural brands, products or ingredients when possible.
- I buy food which was grown in a way to maximize its nutrition (such as local, organic, free-range).
- I value who grew my food and how it is made.
- I pay more for high-quality ingredients.
And how do these come together to create the natural products industry index? Is anything else included to arrive at this number?
NEXT Data and Insights does the bucketing; surveyed consumers aren’t aware, which helps researchers detect additional nuances as to where self-reported consumer behavioral shifts are happening. And lastly, it’s a measure that’s based on top two box responses on a five-point agreement scale that has been indexed to 100, in which 100 represents NEXT Data and Insight’s benchmark from a 2017 survey before COVID-19 emerged.
Here's an example of the natural consumer behavior indexes.
How often does NEXT Data and Insights measure consumer behaviors?
NEXT updates this index weekly via a tracking survey that started the week of March 30.
Who are the consumers that NEXT Data and Insights contacts and how?
The survey goes out to a convenience sample of 1,000 unique adult consumers each week. The results are directionally representative of U.S. adult consumers and are weighted by age, gender and U.S. region to be representative of U.S. Census figures.
Back to the basics. What is an index?
An index measures changes across time against a benchmark. In this case, the benchmark NEXT Data and Insights is comparing to (2017 consumer behavior data) represents “normal times.” So, tracking this index weekly compared to normal times allows researchers to view shifts (subtle or dramatic) as they happen. This sends a signal to the data watchers to home in and dig in deeper to find data to support hypothesis as to the reason for documented changes.
What is the baseline index point for each of these indexes that we’ve been talking about?
This all goes back to responses that showed the strength of consumer behavior of the natural products industry in a survey that NEXT Data and Insights conducted in 2017. Researchers took those same top two box responses for each of those eight questions and have been comparing the weekly scores against those 2017 results. This 2017 survey was rigorously sampled to be representative of U.S. adult consumers and to match U.S. Census on age, gender, income and geographic region.
Natural products industry engagement indexes
What are the natural products industry engagement indexes?
The natural products industry engagement indexes are based on New Hope Network’s tracking trends expertise in the natural products industry. New Hope Network NEXT Data and Insights tracks about 50-plus trends currently and updates them every year as trend watchers assess their understanding of shifts in the industry through Informa Health and Nutrition trade shows, networks and various content sourcing and creation activities. As new trends surface, we add them to this existing trend framework that has been building throughout the years.
The natural products industry engagement index is a rolled up index of those 50 trends that are representative of core trends and innovations fundamental to the natural products industry, and we layer that over a social media and mass media listening tool that tracks these trends representative of the natural products industry. Think of trends such as clean label, traceability, transparency, agricultural improvements, regenerative agriculture or nutritional trends such as brain health, digestive health and eye health. All of these are being tracked through two indexes.
- The total mentions index tracks whether total number of media mentions (keywords that define the top 50 trends representing the natural products industry) are up or down compared to the pre-coronavirus benchmark.
- The net sentiment index tracks whether the benchmark ratio of positives to negative sentiment of all the mentions is up or down.
Why establish an index that tracks how consumers are having conversations?
Social media and mass media are great indicators of what is top of mind for consumers and what is newsworthy. This is a helpful data input to track the relevance of conversations core to the natural products industry with consumers and media. This index is one data point that helps track the cultural shifts that could take shape in society as the world responds to the coronavirus pandemic.
Why should natural products industry businesses watch the total mentions and sentiment indexes?
Similar to the other indexes NEXT Data and Insights has developed, we want to provide insights on a weekly basis. This is a very volatile and dynamic space and we are just starting to lay the foundation and the groundwork of ultimately being able to answer questions about the future. The indexes allow us to spot market shifts and then take steps to explore what is driving them and provide a deeper layer of insight. These indexes will help inform these long-term answers we at New Hope Network, Informa Health and Nutrition and, of course, industry stakeholders are eager to understand.
How did NEXT Data and Insights go about developing these natural products industry engagement indexes?
Leveraging the New Hope Network trend framework, we created keyword searches for each of the 50 trends and for the industry at large. Using social and mass media analysis tools, we identified all references to these industry and trend terms, tracked them over time and indexed them to provide a simple means of monitoring changes in consumer engagement.
Let’s break them down one by one. What does the total mentions index measure?
The total mentions index tracks the total number of times a sentence of insight-rich text is found in the consumer base index based on the keyword search criteria submitted through Netbase.
What does the net sentiment index measure?
The net sentiment index tracks the score that expresses the ratio of positive to negative sentiment about a topic.
Here's an example of the natural products industry engagement indexes.
How often does NEXT Data and Insights measure industry engagement?
Both the NEXT sentiment and total mentions indexes are tracked and updated weekly.
And who are the consumers that NEXT Data and Insights contacts and how?
We aren’t contacting or interviewing consumers, instead we are using tools to listen to and quantify the types of content they are creating online. The NEXT Data and Insights team uses its unique view of the market to define industry trends and analyze them through Netbase, a social listening platform that mines our keywords representative of the natural products industry across platforms such as blogs, Twitter and various news feeds.
What is the baseline index point for each of these natural products industry engagement indexes?
The baseline benchmark point from which we are tracking changes is based on the average of three weeks (one week in October, November and December) 2019. Total mentions and net sentiment are tracked against these pre-coronavirus benchmarks.