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An industry that is making America proud!
Two weeks have passed since Hurricane Katrina's devastation was
felt on the Gulf Coast. News reports continue to monitor the
thousands of homeless and hungry as the nation tries to figure out
just what went wrong with our warning and rescue services.
But there is another story that isn't making the news - and
should. Retailers across the country are helping our fellow Americans.
Wal-Mart jumpstarted the national fundraising with a $15 million
donation and is setting up "mini-Wal-Marts" in the hurricane zone
offering products including food, water, clothing, diapers, baby
wipes, baby formula, and bedding at no cost to those in need.
Safeway is matching employee contributions and has already
delivered an initial check for $100,000 and has donated 10,000
American Red Cross Emergency Preparedness Kits.
Supervalu donated $50,000 and is delivering food, water and other
supplies to the region.
Food Lion made a donation of $250,000 and sent four truckloads of
water and food to Picayune.
Brookshire Grocery is matching donations up to $250,000.
Meijer sent three trucks loaded with food, water, juice, and baby
formula to the neediest areas in Mississippi.
Grocery Outlet chartered a plane loaded with 20,000 bottles of
water and 27,000 cans of food - enough to feed 25,000 people.
The list of retailers and their efforts could go on for pages,
and I apologize in advance to those that I have not listed here
because of space. Your efforts and donations prove to all of us just
how great an industry we are - and I for one am very proud to be part
of the food world.
For more information about helping and donating money and goods
to the Red Cross Hurricane Katrina effort
click here.
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The FMI U.S. Grocery Store Shopper Trends 2005 is available.
Click here
for more details.
The 14th Annual Trade Promotion Practices and Emerging Issues Study
is now available from ACNielsen. To purchase a copy,
click here.
The FMI/Rodale Shopping for Health survey of consumers is available.
Click here for more details.
ACNielsen's latest Private Label Trends Report is now available. For
information,
click here.
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September 13, 2005
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Turning Data Into Knowledge
On the long list of ways in which Florida and Alaska look
incredibly different, add this new entry: their shoppers may be
further apart than their locations.
Florida's population, not surprisingly, boasts a larger
percentage of people above age 60 than any other state in the union.
Alaska, in contrast, has the largest percentage of boomers and the
second largest percentage of people under 25 (Generation Y or the
millennial generation.)
Of course, finding differences between Florida and Alaska is
hardly surprising. It may be more surprising that Arizona, another
state with a large population of retirees, also boasts a very large
population of Generation Xers.
Brian Numainville, senior director of research and public
relations for Nash Finch, produced an altered look at the national
marketplace with a creative approach to some widely used statistics.
By combining census data with shopping behaviors identified in FMI's
2005 U.S. Grocery Shopper Trends and
Shopping for Health, Numainville produced insights into how
different merchandising approaches may succeed in different parts of
the country or even an individual state.
Understanding all the shifts, large and small, in population
characteristics from state to state or market to market can help the
entire food industry best understand how to serve the increasingly
differentiated needs of today's shoppers. Age may be only one
factor, but it's one worth considering.
In either case, the impact on the types of stores and products
these consumers will use promises to change dramatically and very
soon. It's why data matters.
(In the interest of full disclosure, Brian Numainville is
chairman of FMI's Consumer Market Research Committee.)
CLICK HERE
TO SEE THE STATES WITH THE HIGHEST PERCENTAGE OF EACH GENERATION
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Sports Marketing: Time to Get in the Game
If you think a half-pipe is a quick smoke and Watkins Glen is a
peaceful setting for a picnic, then it's time to get a handle on a
new era of sports marketing - a multi-billion dollar business that's
catering to the nation's continually growing fan base.
Sports marketing isn't a new concept. It started in the late
1800s when an enterprising tobacco company first put baseball cards
in packs of cigarettes. But it really took off in the 1970s and 1980s
when Major League Baseball and the National Football League became
big business. Now, NASCAR has become a passion among a broader
spectrum of people than marketers thought possible.
Like any other business, sports marketing is constantly evolving,
rife with corporate sponsorships and a huge return on investment for
those who work on the fundamentals - identifying which sports offer
the greatest return for CPG companies. Until now, this was a
difficult issue to address accurately because of the dearth of
information that linked sports fans with their shopping and
purchasing behavior and what types of consumers follow different
sports.
To help guide CPG marketers through the maze of sports marketing
and to help sports executives attract new sponsors, ACNielsen and
Nielsen Sports have developed FANLinks. This service identifies
interest in ten professional sports by members of the ACNielsen
Homescan consumer panel and links fans with their retail and product
purchase preferences. The National Football League recently became
FANLinks first client, a move that will put the NFL in a better
position to help its business partners optimize marketing strategies
by learning which products and brands are purchased by NFL fans and
where they shop for them.
The sporting arena has become too big and diverse for a
scattergun approach. Target marketing is essential in distinguishing
football fanatics and baseball aficionados from those enamored with
hockey, golf or stock car racing. ACNielsen is on the cusp of this
key research.
To learn more, contact me at
AnnMarie.Dumais@ACNielsen.com.
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2005 Gas Prices Changing How Consumers Shop
Newspapers and television news are continuing to report how the
impact of Hurricane Katrina will further drive up record high
gasoline prices. A survey of ACNielsen's Homescan consumer panel
completed in July, before Katrina's devastating effects were felt on
the oil industry, found households are combining errands, eating out
less often, and doing more at home in order to control the cost of
gas. As gas prices are expected to continue to rise as a result of
the hurricane, we predict that these findings are just the beginning
of a trend of more conservative shopping behaviors that should
continue through the end of the year.
The high price of fuel is impacting different consumer segments
to varying degrees, with a higher proportion of poor households than
affluent households stating that they are using coupons more often
(23% vs. 14%) buying less expensive brands of groceries (20% vs.
10%), opting for a lower grade of gasoline (19% vs. 12%), and
reducing spending in other areas "to a great degree" (15% vs. 5%).
Click on thumbnail to enlarge, or click here.
A higher proportion of affluent households than poor households
are shopping more in warehouse club stores (9% vs. 6%) and on the
Internet (7% vs. 3%). Not surprisingly, the affluent segment has the
highest percentage of households (26%) claiming to feel no impact
from higher fuel prices. For complete definitions of segments by
household size and income
CLICK HERE.
The longer-term impact may well create further opportunities for
one-stop-shop retailers like supercenters and warehouse club stores
to win more day-to-day shoppers. For supermarket operators, it's time
to promote the convenience of their store locations and the value of
their take-home meals. As more consumers do more at home, this trend
should underscore the opportunity for brands to enhance the at-home
entertainment experience.
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Decongestants and Cold Medicines Move Behind the Counter
Late last week, the U.S. Senate unanimously approved a new bill which
would require cold medicines containing the decongestant
pseudoephedrine (PSE) to be sold only from behind pharmacy counters.
The House of Representatives has yet to pass the bill, and if it is
signed into law by the President it would mean that consumers would
be limited to about 7.5 grams of the medicine per month, have to show
an ID and sign a log each time they purchase these products.
Supermarkets, drug stores and mass merchandisers had already
voluntarily begun the process of taking decongestants containing PSE
off the shelf and selling them from behind the pharmacy counter or
other secure areas. The state of Oregon went one step further and
just became the first state to require a prescription for these
products.
PSE is sought by drug dealers who use it as a key ingredient to
make the illegal drug methamphetamine, more commonly known as meth.
The unlawful market diversion of OTC products containing PSE
contributes to the growing problem of meth abuse. Drug dealers had
been obtaining large quantities of products containing PSE in retail
stores in three ways:
Smurfing - Many purchasers visit the same location
many times or shop in a large number of different locations.
Shoplifting - People remove products from the shelf
and leave without paying.
Shelf Sweeping - People remove all the shelf stock and
leave the store without paying.
PSE products are largely sold in tablets or capsules. They treat
nasal congestion caused by hay fever, allergies, sinus irritation,
and the common cold by opening nasal airways, relieving a stuffy
nose, and draining sinuses. Some popular brands containing PSE
include Sudafed, Sinutab, Afrin, Tylenol Cold, Advil Cold, Benadryl
Allergy & Cold Tablets, and others.
Several multi-regional retailers have pulled pill-form PSE
products from the shelf and are selling them behind secure counters.
They include Kroger, Safeway, Albertson's, Target, Wal-Mart Stores,
CVS, Kmart, Rite Aid, Walgreen's, and Long's Drug Stores. Nearly a
dozen states have introduced legislation requiring that all pill-form
PSE products be sold from behind the pharmacy counters without a
prescription.
Oklahoma was the first to do so in April 2004, and the effect on
sales has been noticeable. According to ACNielsen's Scantrack, sales
of PSE products in the Oklahoma City/Tulsa market in food stores with
over $2 million in annual sales dropped 44.7% to $3,068 for the 52
weeks ending April 23, 2005. Unit sales fell 39.6% to 657 during the
same time. For the entire PSE category in food, drug, and mass stores
(excluding Wal-Mart), annual sales of $1.3 million in 2004 was seven
percent lower than the previous year. Unit sales of 226,393 had a
nine percent decline compared to 2003. There was a decline of four
percent in dollar volume and six percent in unit volume in 2002
compared to the previous year.
Click on thumbnail to enlarge, or click here.
Moving these products behind the pharmacy counter and putting
other systems in place should prevent these unlawful practices. But
the financial impact to this $2.4 billion cough/allergy/sinus
products category remains to be seen. One scenario suggests that
consumers may just switch to non-PSE products on the shelf rather
than dealing with the hassle of buying PSE products at the pharmacy.
While another scenario may be that other states follow Oregon and
essentially convert over-the-counter cold and allergy medicines to
prescription drugs; which could make them even more profitable.
The Senate bill would take effect 90 days after it is approved
for products having PSE as their only active ingredient and in 2007
for all other products.
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The $99 DNA Kit: Will the supermarket become the center of whole health?
Lund Food Holdings, which operates both Lunds and Byerly's stores, is
testing cellf do-it-yourself genetic assessment kits to test five
individual conditions: Antioxidant/Detoxification; Bone Health; Heart
Health; Inflammation; and Insulin Resistance. Designed by Sciona
Inc., each condition kit retails for about $99, and consumers receive
a personalized report that is about 30 pages long. Sciona has decided
to use supermarkets (and pharmacies) as its primary method of
distribution to consumers.
Company president/CEO Russell T. "Tres" Lund III told us that his
plan is to create a link between the evaluations performed by Sciona
and his stores' food experts, which have long provided consumers with
diet and nutritional advice and information. The idea, which is a
good one, is to help shoppers understand what they can do in their
daily food choices to either maintain their good health or help
correct certain nutritional defects that the test may have identified.
The genetic information will be used by Lunds' dietitians to
create customized meals and menus for consumers - a process many in
the new age world call "nutrigenetics" - the interaction between
genes, diet and lifestyle. For many consumers it can help them focus
on the proper nutrition and exercise programs... but the key will be
for them to take the time to read the complete report and visit with
a dietician or other counselor.
Here's how the cellf product works:
Consumers collect a sample of their DNA at home using a simple
cheek swab, and send the sample along with a diet and lifestyle
questionnaire to the lab in Colorado, and will receive back (in about
three weeks) a personalized and confidential nutrition and health
assessment based on their genetic profile. The objective is to be
able to actually tailor one's diet not just to specific health
conditions but also to a consumer's genetic predisposition to have
certain maladies.
Sure, maybe we're watching a little too much CSI these days, but
this tool may represent something akin to a fountain of youth.
The science of DNA is moving rapidly, and we can only applaud its
discoveries. However, it will be important for those individuals who
take advantage of these types of tools (and we expect that there will
be many more companies who bring to market similar type of kits and
an expansion of types of diseases they test for) to be able to cope
with the findings. For example, how will a young vibrant athlete deal
with the discovery that he or she is prone to heart disease? For some
it's a lifestyle-changing event - making sure that the exercise
regimen and diet are strictly adhered to...while for others it may
signal the inevitable and a devil may care attitude.
The science may well be bulletproof, but how will our reactions
and emotions to the findings affect our day-to-day lives?
Tres Lund is on to something big. By offering these kits and the
follow up nutritional counseling (at no cost) his stores will be
forging life long, and maybe life saving, relationships with
shoppers. I guarantee that these shoppers won't be driving ten miles
out of their way to buy foods elsewhere in order to save a few bucks.
Lund's philosophy over the years has always been focused on building
long-term relationships with shoppers; we can only hope that more
supermarket retailers follow his instincts.
After all, as the 76 million baby boomers start turning 65 in
less than five years, there is no doubt that they will start to
embrace those products and retailers focused on health and wellness
solutions.
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Organic Private Label Becomes the Next "Big Thing" in Grocery
Not too long ago, store brands were easily recognized by their plain,
unattractive packaging, lack of quality, and limited selection.
Private label then evolved into its next phase by upgrading all of
these elements and attracting more customers. About twenty years ago,
A&P and Grand Union then pushed the category even further by
introducing private label products that were superior in quality to
the leading CPG brands with comparable pricing.
Organic store brands are the latest entry in the growth of
private label, and while still in the infant stage of development,
may well prove to be a formidable segment. Organic sales are expected
to grow more than 20% this year, and the Organic Trade Association
projects that U.S. organic food sales will reach $31 billion by 2007;
indications are that private label organics will proliferate and may
be at the forefront of the next generation of store brands.
Large natural product retailers such as Whole Foods and Wild Oats
led the way in branded organic sales and quickly saw the opportunity
to convert these dollars into their own store branded organic
offerings: Wild Oats Organic, Whole Kids Organic, and 365 Organic.
Now, mainstream grocery retailers including Kroger (Naturally
Preferred), Shaw's (Wild Harvest), Giant Food (Nature's Promise), and
Loblaws (PC Organics) see the opportunity, and have added these
organic private label brands to their portfolio.
Many of the private label organic product offerings are just in
the initial stages of distribution and as a result, much of the sales
and volumes are based on data that is too small to consider reliable.
However, we can note some significant trends that took place in the
52-week period in food, drug and mass (excluding Wal-Mart) ending
07/16/05:
In the Catsup Category, equivalized unit volume is down 0.9%
overall with private label down one percent. Organic catsup, however,
which represents just 0.16% of the category (up from 0.11% the
previous 52-week period) measured a volume increase of 36.5%, and
private label organic rose 8286.7%.
Click on thumbnail to enlarge, or click here.
Canned Soup, after a four-year trend of declining category
volume, actually turned a 1.3% increase - but its organic SKUs
(representing 1.3% of total category volume) showed dramatically
stronger growth of 51.2% during the same period. Private label
organic canned soup grew by 4841.6% in equivalized unit volume.
Click on thumbnail to enlarge, or click here.
Both natural food and mainstream grocery retailers are reaping
valuable benefits from selling organic private label products: they
help develop passionate shopper loyalty and provide higher margins
than branded organics. The number of consumers who want to eat
healthier foods and at the same time are looking for value will no
doubt be on the increase.
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Rice: The Impact of Low Carb vs. the USDA Whole Grain Recommendations
Over the past three years millions of Americans jumped on the much
debated low carb bandwagon as diet gurus, such as the late Dr. Robert
Atkins, preached eliminating carbs or at least reducing them as a
means to lose weight and live an energetic, healthy lifestyle. Rice
has been a staple food for about half the world's population for
centuries, but low carb Americans began scratching this staple off
their shopping lists, along with other starchy foods such as
potatoes, bread and pasta, as the low carb diet guidelines restricted
white rice completely and allowed brown rice only in moderation.
Coincidentally, in January of 2005, just as the sales of low carb
foods waned (according to ACNielsen LabelTrends both unit and dollar
volume were down by more than 10% in the 4th quarter of 2004), the
USDA released new dietary guidelines. One of the key recommendations
is for Americans to consume three or more ounce-equivalents of whole
grain products per day, with the rest of the recommended grains
coming from enriched or whole grain products. For the categories
adversely affected by low carb, this announcement fueled new life
into these struggling categories.
Looking at the entire rice category (which includes instant,
packaged and bulk, rice cakes, dry dinners, and canned) non-whole
grain rice and whole grain rice declined in dollar sales in 2003 and
2004, falling from $1.33 billion to $1.27 billion in the 52 weeks
ending 6/21/03 and then to $1.20 billion in the 52 weeks ending
6/19/04. A recovery in 2005, due to the USDA recommendation, brought
the category sales to $1.25 billion for the 52 weeks ending June
18th.
It is important to note that in analyzing just the whole grain
rices (instant, packaged and bulk) all have seen growth in dollar
sales from 2001 to 2005 and were barely affected by the Low Carb
phenomenon, while during the same period all non whole grain rice
sales declined. This trend suggests that rice lovers who are truly
focused on their nutritional intake did not leave the category
completely.
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Soft Drink Voluntary School Guidelines Just The Beginning
The nation's major soft drink companies, in concert with the American
Beverage Association, announced last month that they would adhere to
a set of voluntary restrictions on how they market their products in
the nation's schools. Under the new guidelines, the sale of
carbonated soft drinks in elementary schools will be phased out, as
well as the sale of all sugared drinks from middle schools during
school hours. The new policy applies only to new contracts, not
existing ones, which means that it could be years before the last
soda vending machine is carted off school property in the US.
The guidelines also still allow for the sale of all drinks in
middle schools after the school day, and the sale of diet soft
drinks, sports drinks, low calorie juice drinks, juices and water all
day. High schools are not affected by the voluntary guidelines,
though it is recommended that at least half of vending machine slots
in high schools be allocated to non-carbonated beverages such as
juice and water.
Even experts with long experience in the soft drink industry
concede that the voluntary regulations don't go far enough. Darryl
Brittain, a freelance synthetic organic chemist who has worked for
all the major soft drink companies as well as for companies producing
what are called high intensity sweeteners (think Equal, Splenda,
Sweet n Low), is on a campaign sponsored by Equal's manufacturer,
Merisant, to help position soft drinks sweetened by such
high-intensity sweeteners as better than those sweetened by High
Fructose Corn Syrup (HFCS).
Brittain says that while the guidelines are mostly aimed at
reducing the intake of HFCS by school-age children, kids would be
much better off if they just drank water. Natural and organic
beverages would be the best second choice, he said, though consumers
need to be careful about how much cane sugar is in these products.
The third choice would be diet soft drinks, he said, noting that
while they're not going to hurt you, they have no nutritional value.
Last choice should be HFCS-laden soft drinks.
The climate in which these beverage decisions are made is almost
certainly going to get a lot cloudier as various beverage companies
joust to be considered the ideal replacement beverage by school
districts that have been dealing with the soda companies. There are a
lot of machine slots and revenue at stake, and the ad campaigns are
almost certainly going to drown out the real intelligence in a
marketing cacophony.
Keep in mind that all this is happening while at the same time
the Center for Science in the Public Interest (CSPI) has called for
soda cans to include cigarette-style warning labels under the
following conditions: (1) to require that the labels of carbonated or
non-carbonated soft drinks containing more than 1.1 grams of HFCS or
other caloric sweeteners per ounce (A typical soft drink contains 40
grams of sugar per 12 ounces, or 3.33 grams per ounce) bear a series
of rotating health messages, and (2) to require that labels of soft
drinks that contain more than ten milligrams (mg) of caffeine per
12-ounce serving bear a health message and the number of mg of
caffeine.
However, the call for soft drink warning labels may not be
universally embraced by consumers. In a poll conducted by
SupermarketGuru.com, while more than nine out of ten respondents said
that there is a strong association between the intake of snack foods
and weight gain, those surveyed were pretty evenly split on whether
junk foods and beverages should carry warning labels. This could
represent a sense that consumers feel it is up to them to make such
choices or could simply reflect a feeling that the government is
getting too involved in peoples' lives from a regulatory sense.
Click on thumbnails to enlarge
Use this link if you've received the text version
for graph one (
http://www.factsfiguresfuture.com/enlarged/Sept05Soda1.gif) and this
link for graph two (
http://www.factsfiguresfuture.com/enlarged/Sept05Soda2.gif)
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Better Technology Produces Healthier Foods
From "slow-churned" ice creams to egg substitutes, food companies are
reformulating to meet America's nutritional needs once again. Some of
these new food products are designed to reduce cholesterol, stave off
diabetes, and protect the heart. But this time, these companies are
using new manufacturing technologies to achieve these goals instead
of artificial ingredients.
For example, fish oil naturally contains the omega-3 fatty acids
called EPA and DHA, which help maintain heart and vascular health.
These antioxidants don't taste good by themselves. But new
manufacturing processes make them palatable so they can become
ingredients in food. Grocery shoppers can buy liquid egg substitutes
containing DHA. They can also buy a carton of shell eggs loaded with
omega-3 fatty acids, because this ingredient was fed to the hens.
Supermarket shelves are carrying more whole grain products from
such atypical brands as Wonder Bread. Technologists have developed
whole grain flours that provide the same functionality (including
better taste) as refined flour -- but give important health benefits
such as protection against heart disease and reducing the risk of
breast and colon cancer.
Proteus Industries in Gloucester, Mass. has come up with an
all-natural process for reducing fat absorption in fried foods. This
technology relies on recovering 95% of pure and functional protein
from animal muscle, and then using it as a thin coating to block fat
from being absorbed during frying. One example is low-fat fried
chicken.
Mars has developed a proprietary process called Cocoapro that
preserves polyphenol, a powerful antioxidant. The company recently
released research showing that cocoa compounds, or flavanols, could
help treat diabetes, strokes and vascular disease. It has developed a
process to make synthesized flavanols, and is talking with
pharmaceutical companies about licensing production.
A new method of making ice cream called "slow churning" provides
the taste of full-fat ice cream in a light product. This taste and
texture comes from kneading fat molecules at a colder temperature.
The slow churn stretches and distributes the molecules widely so the
ice cream tastes like it contains more butterfat. The process
doesn't involve artificial sweeteners or fat substitutes.
Dreyer's Grand Ice Cream Holdings developed the slow-churning
process. Last year, it launched Dreyer's Slow-Churned Light Ice
Cream (sold west of the Rockies) and Edy's Slow-Churned Light Ice
Cream (sold east of the Rockies) in 16 flavors. Meanwhile,
Haagen-Dazs has recently introduced seven flavors of Haagen-Dazs
Light, which relies on essentially the same process (both companies
are owned by Nestle). The brands have half the fat and a third of
the calories of full-fat premium ice cream. Unilever Ice Cream in
May introduced Breyer's Double-Churned Light ice cream in seven
flavors. Its proprietary process is designed to deliver the creamy
taste of regular ice cream with half the fat.
Food companies are treading carefully in this brave new world of
reformulated products - but the advantages for those products can be
enormous. Consumers are reading labels more closely and deciding what
brands to buy based on their ingredients. In January of 2006, the
Nutrition Facts label will require Trans Fats to be listed, which
will bring even more attention to a product's ingredient listing.
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African Americans Do Shop Differently!
In the past month or so a number of electronic newsletters were
circulating about the errors of using mass-marketing approaches with
African American households. With a U.S. population base as large as
Hispanic households and growing at a much faster rate than White
households, African Americans do represent an opportunity for both
manufacturers and retailers willing to apply the right focus. As we
examine retail channel shopping patterns within our ACNielsen
Homescan consumer panel, we see a lot of evidence to support the fact
that "general population" mass-marketing is not appropriate for
African American households.
In 2004, African American households made more annual shopping
trips than non-African Americans (193 versus 185), but they spent
less per trip ($32 versus $38) partly because they purchased about
one less item per shopping trip. Within traditional retail channels
that we monitor, a higher percentage of African Americans shop
Drugstores, Dollar Stores, Supercenters, and Convenience/Gas Stores.
Like remaining households, the Grocery channel is the most shopped
retail format among African Americans, but fewer African Americans
than non-African Americans shop Mass-Merchandisers and Warehouse
Clubs.
Click on thumbnail to enlarge, or click here.
We also see differences in the frequency with which African
Americans shop retail channels and the amount that they spend per
trip. Generally speaking, they make more trips to the smaller,
convenience-oriented formats (i.e., Drugstores, Dollar Stores, and
Convenience/Gas Stores). Conversely, African Americans make fewer
trips to remaining channel formats. The rank order of their format
trip preferences are similar, except when it comes to Dollar Stores
where that format is the third most frequently shopped retail channel
with shopping frequency almost twice as high as remaining households.
Click on thumbnail to enlarge, or click here.
African Americans spend less per trip in all channels but Mass
Merchandisers, Dollar Stores, and Convenience/Gas Stores. Their
spending is notably less in Warehouse Clubs, Supercenters, and
Grocery Stores.
Click on thumbnail to enlarge, or click here.
Finally, we see dramatic differences in shopping preferences
within alternative retail channel formats. African Americans are
less likely to shop in Stationery Stores, Pet Stores, and
Hardware/Home Improvement Stores, while they are more likely to shop
in Automotive Supply and Beauty Supply Stores. African American
household penetration within Beauty Supply Stores is a whopping 45%
of households, compared to just 15% for remaining households. Sounds
like an opportunity for targeted product assortment within
traditional retailer formats that have a high concentration of
African American households.
The above information provides a glimpse of how the competitive
frame among African American households is much different when it
comes to retail format selection. This has significant implications
for retailers who are or would like to do a better job of serving
African Americans. Next month we plan to illustrate differences in
product purchasing behavior among African American households to show
the need for targeted marketing solutions at the category level.
And, new insights into this important consumer segment are on the
way. With our Homescan MegaPanel expansion taking our total sample
base to 125,000 households, one of the many planned new services
includes the ACNielsen Homescan African-American Consumer Panel,
delivering first-ever insights that will help marketers gain an even
better understanding of the differences in shopping/buying habits and
practices between African-American and non-African-American consumers.
For further information or to arrange a comprehensive
presentation on consumer shopping patterns, please contact Todd Hale
at thale@acnielsen.com or
859-905-4615.
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New Rules: Selling to the Higher Income Shopper
There is a new definition of luxury. For many consumers luxury has
transcended being about product and now is more about the
"experience"; creating new challenges and opportunities for those CPG
brands who want to capture the more affluent consumer.
According to Pam Danziger, president of the Stevens, Pa.-based
marketing consulting firm Unity Marketing, which monitors the luxury
marketplace, it's important for both marketers and retailers to
understand the need-states of these "new luxury" consumers if they
hope to maximize their profit potential.
Customer service needs to be the central focus of the luxury
shopping experience. When purchasing a luxury automobile, for
instance, the salesperson will treat the customer as if he or she is
the only person on the face of the planet, able to answer any
question and willing to go whatever distance it takes to fulfill the
needs of the customer.
"Someone shopping for a Lexus is looking for more than just a
car," says Danziger. "While it's true that the quality of the product
is important, so is the service they receive - both during and after
the sale."
A sampling execution of gourmet imported cheese at a kiosk set up
near the cheese counter will lead to impulse and incremental sales;
but even more important it serves as an educational "experience" for
a more sophisticated shopper.
Reviewing those specific categories that tend to be purchased by
more affluent households reveals the specific opportunities and
locations in store that should be enhanced by adding more
"experiential" support, including in-store education (seminars,
kiosks, trained staff and samplings) and more targeted displays.
Marsh Supermarkets is one retailer that understands "experiential
retailing." Their new store format has the perimeter of the store
divided into a series of connected smaller "shops" (including major
categories like meats, bakery and seafood) where more personalized
service as well as having a specifically designed ambiance gives
shoppers the "experience" of shopping in a gourmet store for their
day-to-day groceries. Each shop is unique in design and detail even
down to the color temperature of the lighting. For example, the
bakery is lit with soft warm golden lights, while the seafood
department next door is bright and almost bluish to give the
experience of cold, fresh water.
Segmenting the "experience" beyond product categories, Marsh has
installed 60-inch flat screen televisions throughout the store and
tunes in live local and major sporting events to reassure male
shoppers that they won't miss a single play as they load up their
carts.
To see a full motion video tour of Marsh's new format
CLICK HERE.
As mainstream retailers understand the experiential nature of
luxury consumers, the way they do business is starting to change.
Grocery retailers like Marsh, Trader Joe's and Whole Foods have come
to understand that a more satisfying shopping experience can
translate into bigger rings from consumers with more disposable
income. Many large chains are moving towards a more experiential
shopping experience as well and are finding success with higher
income shoppers.
Click on thumbnail to enlarge, or click here.
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Is the UK Nutrient Labeling System A Valid Model for the US Consumer?
Nutrition experts in the United Kingdom have created a new system
that ranks foods based on the quality of their nutrients. The goal of
the system is to create a clearer picture of the value of or harm
that can be done by different foods, especially those about which
there may be misconceptions.
For example, conventional wisdom says that oatmeal is a healthy
breakfast - but the nutrient ranking system will tell the consumer if
a particular brand's oatmeal product is loaded with sugar, sodium or
other ingredients that may, in fact, create a far less healthful
profile for that product. Negative ratings are based on the number
of calories, saturated fat, sugar, and sodium, while products get
positive scores based on protein, fiber and any fresh fruits and
vegetables that may be included.
The ratings scales were developed by a panel made up of industry
and consumer groups, as well as nutritionists, dietitians, and
staffers from both the UK's Scientific Advisory Committee on
Nutrition (SACN) and the federal Food Standards Agency (FSA).
According to the FSA, the model uses "what is described as a
'simple scoring' system, in which points are allocated on the basis
of the level of each nutrient in 100g of the food. This allows food
products to be classified on the basis of their overall points score.
The UK Agency is currently proposing that the definition of 'high
in saturated fat, salt or sugar' should apply to foods scoring four
points or more and drinks scoring one point or more.
In essence, food products will carry their own numerical ratings,
similar to movie ratings, so consumers can take a quick glance at the
rankings and tell where the product's nutrients put it on the
nutrition scale. The FSA suggests that before this information
starts showing up on food labels, these numerical rankings will be
seen in advertising - again, in much the same way that consumers can
tell the difference between a "PG" and "R" rated movies.
The FSA has said that the new ratings system is designed to
improve upon the current labeling model, which offers information
without context - many consumers simply don't know what an acceptable
level of sugar or sodium in a particular food may be. In addition,
the new ratings are seen as a more effective way of establishing
which foods should be eaten by children and which should not - an
issue that is as much on the front burner in the UK as it is in the
US.
Published reports in the UK speculate that if the system is
accepted in the UK, it seems likely that it could spread to other
European Union countries.
Creating a ratings system that provides this context - and some
badly needed perspective for consumers - would seem to be an
intelligent first step in creating a more informed class of shoppers.
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Who Reads Food Labels?
More than half of U.S. consumers regularly check food labels for fat
content and calories, but only a quarter look for additives and
preservatives, and only seven percent for the glycemic index.
Overall, they rank themselves higher than consumers from 37 other
markets for understanding the nutritional information on food labels.
These findings are from the ACNielsen Online Consumer Confidence
Survey of 38 markets around the world (
http://us.acnielsen.com/news/20050727.shtml)
. The twice-yearly study determines the confidence levels and
spending habits/intentions of consumers.
Less than half of survey respondents around the world don't
regularly check the labels on food products they buy for the amount
of everything from sugar and salt/sodium to trans fat and fiber.
Nearly half of U.S. consumers (45%) check the nutritional information
on a packaged food when they are considering buying it for the first
time.
Click on thumbnail to enlarge, or click here.
The ingredient checked most often by consumers around the world
is fat (49%) - a practice followed by 57% of shoppers in North
America. The largest number of regional shoppers looking for caloric
content are in Latin America (59%), while more Asia-Pacific consumers
check preservatives than anywhere else (47%). Looking deeper in those
regions shows that 60% of Brazilian shoppers regularly check caloric
content, and over 60% of Chinese consumers regularly check the
content levels of additives, preservatives, and coloring.
Click on thumbnail to enlarge, or click here.
Not many consumers in the U.S. (7%) and around the world (11%)
look for a product's glycemic index, which ranks carbohydrates based
on their immediate effect on blood glucose (blood sugar) levels. One
of the reasons is that few food makers now include this information
on the labels of their products. This will change as interest grows.
The index was a key component of The South Beach Diet, the
best seller, and has become the foundation of many other diet plans.
It is the next big thing in the food industry.
Food labels represent an important opportunity for consumer
packaged goods manufactures to differentiate their products and build
consumer trust, but the opportunities are lost if labels aren't being
read or understood. The majority of U.S. respondents (65%) "mostly"
understand nutritional information on the food labels of products
they buy - the highest level among the 38 markets in the survey. By
contrast, just six percent of respondents in Italy said they
understand the information.
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ACNielsen estimates that in 2004, over $4.4 billion was spent across
all retail channels in the Wrapping Materials & Bags category, which
includes Aluminum Foil, Sandwich Bags, Tall Kitchen Bags, Food
Storage Bags, Plastic Wrap, Trash/Trash Compactor Bags, Wax Paper,
Lawn & Leaf Bags, Oven Bags, Waste Bags, and Paper Lunch Bags. The
following slides indicate the percentage of households who buy each
type of wrapping materials & bags, sampling of higher indexing
household types who buy products in the overall wrapping materials &
bags category, and channel share of category dollar sales.
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Click on thumbnail to enlarge, or click here.
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Click on thumbnail to enlarge, or click here.
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Click on thumbnail to enlarge, or click here.
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Facts, Figures and the Future is copyrighted and may not be
reproduced without prior permission. For more information about the
publication, please contact Phil Lempert at 323-860-3070 or via
e-mail at
PLempert@FactsFiguresFuture.com
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