Why Do Grocery Shoppers
Buy Certain Brands?
By Lynne Cooke
What brands are grocery shoppers buying most frequently nowadays? What made them buy those brands as opposed to others?
A new consumer survey provides a snapshot of the purchases and motivations in select product categories: beverages, snacks, coffees/teas, cereals, and cleaning products. The first brands that shoppers put into their grocery carts were Vitaminwater, Chex Mix snacks, Starbucks coffee, , Kashi cereal, and Lysol cleaner.
“There is no question that shoppers are influenced by both merchandising and promotions,” said Janet Eden-Harris, chief marketing officer Boulder, Colo.-based Market Force Information which conducted the survey. “In the six product categories we studied, new trials ranged from 29% to 52%. This means that at least one third of consumers were influenced to buy a product they had not planned on buying in the last 30 days.
“Even more intriguing were the reasons that consumers listed for trying these new products,” she continued. “Four out of 10 said the new item caught their eye on the shelf (merchandising), and another three in 10 said a promotions such as coupons, 2-for-1 specials, or end cap promos induced them to buy. Advertising was cited in just 8% of cases.”
The findings emerged from a New Brand Trial survey conducted in January among a network of 300,000 independent mystery shoppers and merchandisers. Nearly 6,000 consumers responded to a series of questions designed to shed light on which brands drove the most new product trials and why.
Starbucks coffee was the No. 1 brand tried by consumers in the coffee/tea category, earning twice as many mentions as No. 2 Dunkin’ Donuts coffee and No. 3 Celestial Seasonings tea. Chex Mix and Ritz virtually tied for number of new product trials in the snack category, with a third more mentions than No. 3 snack Fiber One.
In the beverage category, Coke’s vitaminwater was the most commonly mentioned new beverage purchase in January, followed by V8 and SoBe. Kashi and Special K led mentions in the cereal category, with both scoring significantly higher than No. 3 Cheerios. Lysol, Swiffer and Clorox all scored comparably high marks for new product trials in the cleanser category.
It is probably no surprise to any veteran CPG marketer that, when the consumers were asked what made them pick up and buy a new product in the categories studied, four in 10 said “they saw it on the shelf or display.” Promotions such as coupons were mentioned as driving factors by another three in 10. Referrals by friends was the next most popular reason driving new product purchases, and advertising was cited by just 8% of survey respondents. There were some differences by category, with cereals being the most responsive to promotions and couponing, and snack purchases influenced most by merchandising.
“I think there are two important takeaways from this study,” said Eden-Harris. “First, our consumers are spending a lot of time in stores. Almost 90% of consumers ‘stock up’ shop at least once a week – and almost 30% stock up close to twice a week. That’s in addition to the one or more times a week that most consumers expend as a ‘fill-in trip.’ That leads to the second take away: in-store merchandising and promotions really work. While advertising clearly plays a role in making consumers comfortable with a brand and likely makes them more willing to try something new, it’s the merchandising and promotions that they remember, compelling them to pick up that new product.”
The survey revealed that coffee was tried more frequently than any other product. Eighty-two percent of respondents said they drink coffee or tea, and cited traditional brands such as Folgers, Sanka, Lipton and Nestea as the brands they currently have on their shelves at home.
But, specialty coffee and teas enticed more consumers to try a new brand or flavor in early 2010. Out of the 2,000 who responded to this portion of the survey, 52% said that they had tried a new brand or flavor of coffee or tea from a grocer in the past 30 days. Their purchases ranged across a variety of brands, with 15 brands receiving 10 or more mentions. Starbucks coffee garnered the highest response in the coffee/tea category with 81 mentions. Dunkin’ Donuts coffee received roughly half that number with 43, followed by Celestial Seasonings and Folgers with 35 and 34 respectively.
Beverages had the most brand name recognition among the categories surveyed. In fact, beverages, including health and energy drinks as well as sodas, received the largest number of brand name mentions of any category sampled. Out of the top 17 brands that dominated in the beverage category with 10 or more mentions, Pepsi accounted for five of them, including Pepsi, Dr. Pepper, Mountain Dew, Sierra Mist and Gatorade.
Crackers, popcorn, chips and pretzels are consumer favorites, as seven in 10 of respondents said they have those at home. Consumers seem very open to try other sorts of snacks. Forty-four percent of them reported trying a new brand of snack in the last 30 days. The leading brand of snack consumers remember trying in the past 30 days was Chex Mix, followed closely by Ritz and Fiber One. All three have been very successful in extending their iconic brands into multiple flavors and even multiple categories.
Kashi and Kellogg’s Special K cereals were the two brands mentioned most frequently as new cereal products tried by consumers in the past 30 days. In fact, they had more mentions than any brand across the six categories researched, with 127 and 123, respectively. General Mills’ Cheerios brand rounded out the top three with 80 mentions. The nearest competitor was
Post’s Honey Bunches of Oats with 24 mentions, one-fifth of what was garnered by the two cereal leaders.
The trial purchases of cleaning products were dominated by iconic brands. Consumers were slightly less likely to try a new cleaning product than snacks, coffee or beverages, with 29% of them reporting that they bought a new brand in the past 30 days. When they did try a new cleaning product, long-standing brands won out – Reckitt Benckiser’s Lysol was mentioned most frequently, followed closely by Procter & Gamble’s Swiffer, and Clorox, with 29, 28 and 27 mentions, respectively.
Market Watch
‘New Frugality’ May Endure
In Post-Recession Economy: Survey
By Rose Anthony
Recession-driven consumer behavior – increased savings, deferred consumption and weakened brand loyalty – is unlikely to change as the economy improves.
A “new frugality,” born of The Great Recession and evidenced by two consecutive years of declining per capita consumption, is now becoming entrenched consumer behavior that is reshaping consumption patterns in ways that will persist, according to a new survey of 2,000 U.S. consumers by Booz & Company.
“In this changed environment, marketers need to develop deeper insights into shopper attitudes and behaviors in order to better align their product, pricing, and marketing communications strategies,” said Matt Egol, a Booz & Company Partner.
This new consumer spending report, the second issued by Booz & Company since the early days of the recession in October 2008, confirms a picture of pervasive retrenchment in consumer spending that spans a broad range of consumer product categories. But the survey also suggests that increased frugality may have become learned behavior, making many Americans more cautious and discerning consumers.
What is more, the study suggests that these behaviors are “sticky,” and unlikely to quickly change as the economy shows signs of improvement. For example, in the next 12 months just 9% of consumers intend to spend at pre-recession levels on household products, 10% on mobile phone service, 11% on health and beauty products, and 18% on apparel, clothing, and shoes. Moreover, nearly two-thirds (64%) of consumers say they’ll shop at a different store with lower prices even if it’s less convenient for them.
“Frugal behavior is now considered trendy by many shoppers, and will continue for years to come,” said Egol. “In this changed environment, marketers need to develop deeper insights into shopper attitudes and behaviors in order to better align their product, pricing, and marketing communications strategies.”
Here are some examples of changed consumer attitudes:
- About two-thirds of the respondents (65%) say they now consider saving to be more important than spending, and that they frequently use coupons.
- More than half (55%) say they would rather get the best price than the best brand.
- More than half of consumers surveyed reduced discretionary spending on a range of categories, including dining out (58%), consumer electronics (53%), apparel (53%), and media and entertainment (51%).
What’s more, these attitudes are translating into strong behavioral change going forward:
- Nearly two-thirds (64%) of consumers say they’ll shop at a different store with lower prices even if it’s less convenient for them.
- Only one-third (32%) of respondents believe that their household financial status over the next twelve months will change for the better, reinforcing focus on frugal shopping behaviors such as deferring spending, trading down to lower price points, or buying their favorite brands during promotions.
Several other consumer behaviors characterize the “new frugality.” Highlights include:
Shopping itself is less impulsive and more disciplined. Recession-habituated shoppers are more inclined than ever to do research before going to the store. This was especially true, the survey revealed, in three categories: Health and Beauty (83%), Household Products (82%) and Food and Beverage (79%).
Another study conducted this past Fall by Booz & Company in collaboration with Grocery Manufacturers Association, found a comparable proportion of shoppers conducting research before they shop, with a focus on finding the best prices, clipping coupons, and reading circulars for what is on sale. The “Shopper Marketing 3.0” study also found that many shoppers use price breaks to justify buying the brands they love.
The shift to private label products has accelerated and shows no signs of slowing down. In fact, Booz & Company analysis shows that private labels are likely to continue to take share from brand names. Said Egol, “Retailers are unlikely to give brands back the shelf space that private label has taken given their dependence on private label for profits. In addition, consumers are reporting generally positive experiences when trying private labels, so for some consumers they are becoming preferred brands.”
However, the move to lower price points overall, while pervasive, is not universal. Generally, shoppers are opting for lower priced brands in apparel, household products, and food. But they are less inclined to “trade down” when purchasing alcoholic beverages, tobacco, and health and beauty products.
The survey sheds light on the challenges faced by consumer marketers and retailers emerging from the recession. Specifically, faced with the same basic economic trends, consumers are behaving differently with respect to their attitudes toward value and loyalty. Booz & Company identified six distinct, new consumer segments that can help interpret how customers shop in terms of brand loyalty, retail format loyalty, and online behaviors. These segments range from “Shopper 2.0” – young consumers who tend to buy online, regardless of product category, who are price sensitive with few brand or store format loyalties – to “Loyalists,” largely male, who are loyal to both brands and the stores where they shop, but are also avid users of the Internet for research and buying.
“This more cautious consumer approach to spending began even before the recession came into full swing but has since picked up speed,” said Booz & Company Partner Andrew Clyde. “As manufacturers lured consumers with new promotions, consumers traded down and liked the experience. As the economy recovers, marketers need to better target their strategies to preserve the value of existing brands, and avoid destroying value through too blunt a competitive response across segments.”
For retailers and consumer products manufacturers, Booz & Company identifies specific areas to spur growth and profitability coming out of the downturn:
- Building marketing strategies and tactics that address where and why consumers shop – rather than relying too heavily on demographics-based approached used for advertising buying.
- Determining differences in consumer behavior across product categories, offline vs. online shopping occasions, and specific retailers/etailers.
- Differentiating marketing messages and promotional offers to more price conscious consumers vs. those who place greater value on brand or convenience.
- Engaging shoppers along the full path to purchase, rather than treating online and in-store interactions as silos.
Milestone for VideoMining
VideoMining Corporation, the leading provider of in-store intelligence for retailers and consumer product manufacturers, is celebrating its 10th anniversary. The company utilizes its breakthrough in-store measurement platform to help its clients optimize their shopper marketing and merchandising strategies.
Retailers and manufacturers have relied on VideoMining for actionable insights about shopper behavior. For example, helping retailers improve the store layout or helping manufacturers understand the impact of a secondary display or a change in packaging.
“We help our clients see how shoppers are really responding to their marketing and merchandising strategies,” Dr. Rajeev Sharma, Founder & CEO of VideoMining.
explained. “Understanding these responses can help match the needs of their target shoppers, and often even minor tweaks, such as moving a display by a few feet or adding new signage, can make a huge impact.”
The company has several syndicated programs in partnership with top retailers to deliver ongoing shopper insights. The company’s client list includes major consumer product manufacturers such as PepsiCo, Kraft, Kellogg’s, Anheuser-Busch InBev, Hershey Foods, Dr Pepper, Kimberly-Clark, Coca-Cola, Wrigley, General Mills, Nestle, Altria, ConAgra, Clorox, and Sara Lee.
More Belt Tightening
When it comes to small things people can do each day to save money, consumers are still acting cautiously, according to The Harris Poll of 2,576 adults surveyed online in January by Harris Interactive. In fact, almost two-thirds of U.S. adults (63%) say they have purchased more generic brands in the past six months to save money while an additional 12% say they have considered doing so.
As far as CPG brands are concerned, there are other things Americans are doing or have considered doing in the past six months to save some money: almost half (45%) say they are brown bagging lunch instead of purchasing it, with 8% having considered doing so; 34% say this is not applicable to them. One-third of Americans (34%) have switched to refillable water bottles instead of purchasing bottles of water, while 10% have considered doing so.
Health-Conscious Shoppers
Those who follow name-brand diets or have healthy lifestyles spend, on average, more than $3,400 on groceries per year. In contrast, those who eat largely low-fat foods, regardless of brand, as a lifestyle choice spend just over $800. That’s the key takeaway from a new study by Catalina Marketing’s Pointer Media Network.
According to the report, the unprecedented number of Americans trying to lose weight can be a coup for food makers if campaigns are focused on the most relevant consumer segment. For example, consumers with healthy eating habits spend 47% of their total grocery budget on weight-management products. They buy a lot of meat substitutes and frozen low-fat desserts. “Devoted dieters” spend, on average, $1,244 on weight-management products – 38% of their total grocery budget.
FEBRUARY 2010
Key Challenges on Agenda of Food Industry Summit
By John Karolefski
Meeting the challenges of today’s marketplace will be the theme of the fourth annual Food Industry Summit hosted by the food marketing department of St. Joseph’s University March 11 in Philadelphia.
Today’s shopper will be on the mind of marketers and retailers as they present their experiences and perspectives on a range of topics: the changing consumer, new store formats, the economic downturn, private label, food safety, urban supermarkets, and more.
One of the speakers, Jeffrey Brown, President and CEO of Brown’s Super Stores, was a guest of First Lady Michelle Obama at last week’s State of the Union Address in recognition of his work in building supermarkets in impoverished urban areas. At the conference, he will explain how he manages to serve shoppers in “supermarket deserts” where residents have no alternative to buying groceries in poorly-stocked bodegas and high-priced convenience stores.
“This conference is where you can get a solid reading on what the issues are and what you should be worrying about,” said Mark Lang, a professor of food marketing at the university. “You can get insights from successful companies on how to think about these issues and how to respond to them.”
He said many executives need help with the challenges in the marketplace. For new ideas and guidance, they will be looking to today’s business leaders such as Brown, owner of 10 ShopRite stores.
Other speakers will include:
- Scott Young, Senior Vice President of Retail Sales for Coca-Cola North America
- Andre Hawaux, President and COO of ConAgra Foods
- Mike Salsburg, President of Campbell’s Sales Company
- Fred Morganthall, President of Harris Teeter
- Pam Bailey, President, Grocery Manufacturers’ Association.
“We specifically have a program with at least two manufacturers, two retailers, and an association executive,” said Lang. “One reason we do that is for the knowledge and expertise from different parts of the industry value chain, upstream and downstream from each other. Sharing information is important to the different members of that chain. Manufacturers are always trying to find out what issues retailers are experiencing, what are they doing, and how are they responding. Retailers want to know what manufacturers are dealing with.
“Also, everyone likes to hear information about customers. In the end, Kraft’s customer
and Acme’s customer is the same person. Each of them wants to hear what the other one knows about that same person. There’s a great deal of overlap in terms of customer insights and knowledge.”
One of those shopper segments is Gen Y consumers. That demographic group, Lang said, presents a big pending change that the food industry is just starting to get its arms
around. They’re not going to be like a Baby Boom consumer. They’re going to be a different food consumer.
“Another thing is the future of private label,” he went on to say. “It has made significant inroads in our business. It’s not looking like it is going to go away when the economy improves. It is actually entrenched significantly into the consumer’s pantry and preference set.”
The emergence of private label, he said, is something that brand manufacturers and retailers cannot ignore. The former has to figure out how to compete with store brands, while the latter needs to determine if the chain is sufficiently committed to private label.
“We’re also seeing a lot of new [retail] formats being tested beyond just the lifestyle stores,” said Lang. “We’re seeing the smaller express formats which have a great potential as a reasonably priced, quick-visit store. They’re being tested, and a lot of people are interested.”
Market Watch
Shoppers Will Spend More to Go ‘Green’: Survey
By Lynne Cooke
Consumers are willing to pay more for a variety of products that are “green,” says a new survey from Burst Media.
Additionally, the survey revealed that nine of ten (90%) respondents have incorporated some level of “greenness” into their daily lives – few (8.8%) are 100% “green” and most are aspirationally “green” having incorporated a few “green” behaviors into their daily life. To help lead “green” lives respondents cited the internet as the best source of information on “green” products and practices.
The survey was administrated in lat December to over 1,500 adults 18 years and older.
Burst Media provides advertising representation, services and technology to independent
Web Publishers.
According to survey results, consumers are willing to pay a premium for products they know are made out of “green” or environmentally friendly, organic materials. Not surprisingly, aspirationally “green” and 100% “green” consumers are the most willing to pay a premium.
The aspirationally “green” consumers are most willing to pay a premium for food and household products they know to be “green,” including produce (66.6%), juices and other bottled drinks (61.1%), household cleaners (59.2%), laundry detergents (58.7%), and packaged food (58.2%). Meanwhile, among the 100% “green” respondents, over 80% are willing to pay a premium for all product categories, including food, garden/landscaping supplies (84.4%), home improvement supplies (84.0%), bedding (83.3%), and health and beauty products (82.0%).
More than one-third (39.4%) of respondents cite the Internet as the best source of information on “green” products and practices, followed by television (18.4%), friends and family (9.2%), newspapers (7.1%), magazines (6.5%), and books (4.6%). While men search for information on alternative energy and “green” technologies, women look for healthy recipes, recycling, simple living, and natural remedies.
More than half (56.6%) of all respondents believe to some extent advertising claims that promote a product as “green” or environmentally friendly. However, one quarter (25.1%) do not believe the claims or find them confusing or misleading. Only one out of ten respondents (10.0%) say they never believe “green” claims made in an advertisement. Two-thirds (67.5%) of aspirationally “green” respondents believe “green” claims in advertising, compared to 58.2% of 100% “green” respondents, and 32.3% of respondents who are not “green” at all.
Interestingly, women in all key age segments are more likely than men to purchase a product that is advertised as being “green” or environmentally friendly. However, men still lead women for being completely “green” – 12.1% versus 5.3%, respectively.
“Green consumers are turning to the Internet,” said Chuck Moran, chief marketing officer for Burst Media. “This poses an incredible opportunity for advertisers who are marketing “green” products online. But it is important for marketers to recognize that consumers have different ‘green’ messaging needs as ‘green’ can mean one thing for women and something very different for men. With a clear and direct message, advertisers can take advantage of the internet to reach these ‘green’ consumers.”
Interestingly, there is a distinct difference in the motivation to go “green” between aspirational “greens” and those self identified as 100% green. While aspirational greens clearly point to working for a better environment (61.3%) as the reason for incorporating “green” behaviors into their daily lives, only 38.1% of 100% greens point to this cause. Among respondents who are “100% green.” reasons include “to live a better quality of life” (36.6%), good for the community (35.4%), desire to make a difference (32.9%), and to set an example for others to follow (31.5%). Among this segment, being “green” identifies a lifestyle rather than personal activity.
Hispanic Network to Help Brands
More than 20 major brands have signed with the Latinum Network, the first-ever business network devoted exclusively to helping corporations understand shoppers that comprise the estimated $850 billion U.S. Hispanic market. The brands include Clorox, Kraft Foods, Mazola, Nestle, Sara Lee Corporation, Splenda and others outside the CPG arena.
The Latinum Network, developed by EcoNet Ventures, enables CMOs and other designated executives to share best practices, improve inter-company collaboration, participate in cutting-edge research and pool resources to leverage their collective buying power. As such, Latinum aims to serve serves as a barometer of consumer and corporate trends. For more information, visit www.latinumnetwork.com.
