News and Insights
Navigating the Grocery Aisle: How Rising Food Prices are Shaping Consumer Behavior
August 23, 2023
Soaring food prices in 2022 took a big bite out of consumers’ budgets, leaving marketers jockeying for a slice of a shrinking pie. Last year, the cost of food at home increased a staggering 11.4%, according to the USDA’s Food Price Outlook. Price growth is moderating in 2023, but consumers may not feel relief yet, as food-at-home costs are still expected to rise 6.3% this year.
Given unpredictable pricing at the supermarket, many consumers are revisiting and reprioritizing spending. When advising food and beverage brands from around the world, I find it helpful to dig into the data and pair it with developments I’m seeing on the trend-setting West Coast.
This spring, FINN Partners engaged Researchscape International to survey consumers — 1,089 participants from April 29 to May 1. Pouring over the results yielded some interesting insights about buyer appetites that can inform marketing strategies for consumer brands nationwide.
Favoring fresh
Consumers have modified their shopping habits, but less than one in five are switching to frozen produce over fresh or purchasing less fresh produce overall. Instead, they are choosing less expensive brands (39%), using coupons (36%) or buying less overall (35%). Spending priorities are on meats, vegetables and fruits.
To ensure their products make the cart, producers have an opportunity to position their fresh foods as flavorful, economical choices. Messaging might focus on storage hacks to extend freshness or preservation tips to tap into exceptional flavor and nutrition beyond peak seasons. For brands with packaged products, it could be beneficial to highlight natural or plant-based ingredients and their origin story, focusing on where and how they’re raised and their journey to the consumer.
Articulating value
Overall, shoppers are driven by price, quality and quantity when seeking value. Price takes a backseat, however, when origin, sustainability and nutrition are considered important. Those planning to buy more fruits and vegetables note quality and nutrition outrank price, while those craving snack foods and treats show preference for sustainable products.
Brands must consider how their products’ leading attributes align with consumer perceptions of value. For example, our client Filippo Berio, the 156-year-old Italian brand and one of the nation’s top-selling olive oil and pesto sauce companies, recently launched an organic and traceable Sustainable Select line. Its campaign messaging touts quality, sustainability and traceability — targeting individuals willing to pay more for those key characteristics.
Prioritizing health
When feeding a household, 56% of shoppers are making choices to eat for better overall health. Closely following, 52% are seeking quality and 52% want to stretch dollars and keep bellies full. Although less priority is placed on sustainable, organic and non-GMO products, these attributes are considered by a subset of shoppers, particularly those eating for specific health reasons.
Brands should consider how they can dovetail with consumers’ broader goals, such as accenting specific nutrients and their health impacts. We’re seeing this with clients like USA Pears, which promotes pears’ high fiber content and digestive health benefits, and Northwest Cherry Growers, which emphasizes how sweet Northwest cherries’ anti-inflammatory properties aid post-exercise muscle recovery, among other wellness benefits.
Sourcing inspiration
Grocery shoppers find inspiration everywhere, with recommendations from family and friends being most influential. Price-focused consumers also find inspiration roaming the aisles or reviewing store ads. However, those intent on quality, origin and nutrition often turn to articles, while sustainability minded buyers reference social media influencers, including chefs, celebrities and brands themselves.
The concept of 360 or omnichannel marketing remains critical. Marketing communication strategies must be formulated for the shoppers that brands want to reach, and channels and vehicles should be right for the audience and message. A successful campaign is a custom recipe combining digital and social elements, in-store promotions, influencer and media partnerships, and brand experiences. The goal is for engagement along the entire journey: discovery to trial to repeat purchases.
Building loyalty
As consumers keep an eye on budgets, brands will likely face heightened competition for share of wallet. As marketers, we must be mindful of rapidly shifting consumer trends and continuously leverage market insights to develop strategic communications plans that are nimble and relevant in a shifting landscape. If we can do that, brands can build affinity and sales for the near and long term.
POSTED BY:
