Does the food industry really understand consumers? That's a topic of intense speculation, but it's extremely hard to prove anything.
To be really certain you'd have to get systematic by surveying consumers about key topics, asking the same sets of questions to retailers and suppliers, and carefully comparing responses to find gaps.
Which is exactly what we did.
This week SN presents findings of research that shows how shoppers and the industry are getting their signals crossed on some important topics.
SN polled its trade audience and simultaneously received consumer feedback from two partners with national shopper panels. Those partners are Phil Lempert, SN contributing editor, and Every Day with Rachael Ray Magazine.
The findings, among other things, show the industry underestimates the depth of some important consumer trends. One example involves local foods. Asked how important it is to consumers that their primary store offers local foods, some 38% of industry participants said “very important.” That response shows a recognition of the trend, but it falls short of the 52% of consumers who said it is very important. Retailers were much closer than suppliers to the consumer answer, as 47% of retailers but only 28% of suppliers said local was very important to shoppers.
In another case, when asked if shoppers modify recipes to make them healthier, some 8.2% of industry respondents said: “Yes, every time they follow a recipe.” But that was way off the mark because some 20% of consumers said they do it every time.
Meanwhile, on the topic of whether consumers consider themselves more or less health conscious today than a year ago, 84% of the industry said yes. That was close but still short of the overwhelming result: 96% of consumers said they consider themselves to be more health conscious.
These findings indicate the industry is trailing when it comes to understanding the full extent of consumer shifts. The danger in miscalculating consumer swings is potentially severe. Consider what's happening on the economic front.
While the majority of shoppers are still challenged by hard times, higher-income consumers are beginning to spend more freely on discretionary merchandise, ranging from upscale televisions to high-end pet items, according to a recent report in USA Today. That media outlet also pointed to the first stages of a restaurant recovery fueled by this trend.
How quickly will food retailers recognize and adjust to these spending shifts? Depending on market location, some will need to quickly rebalance their focus on value with different efforts to attract these higher-end consumers. But a lesson from the aforementioned survey is that the industry may be lagging in response times because it's underestimating consumer swings.
The goal should be to get the best reading possible on shopper preferences so the industry can confidently act while opportunities are best.
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