New values

by MEAT&POULTRY Staff
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The good news: Shoppers making careful, value-based, food-buying decisions still consider meat and poultry (coffee, too) essential and valuable foods. The bad news: all those "value-added" processed products that carry those sweet, fat profit margins – consumers are losing interest in them. The Great Recession is producing a back-to-basics mindset in the American food shopper that’s unlikely to change even when the economic climate warms up again.

These are some of the conclusions drawn by a new survey of American consumers conducted by IBM’s Institute for Business Value. Budget-conscious supermarket customers are increasingly sticking to shopping lists and are declining brand names in favor of store brands, Guy Blissett, consumer products leader at the Institute, told MEATPOULTRY.com. Seventy-two percent of respondents said they have made "significant" spending reductions on food – but Blissett warns that cutting back on spending doesn’t mean an exclusive focus on price. "It’s more of a focus on value, a shift from price to value," he said. "The basic message is, if you’re not delivering something of value to consumers, you’re not going to sell your product."

Consumers have shown willingness to make trade-offs, "but they’re managing their trade-offs differently" now than in the past, according to Blissett. For example, nutrition and quality remain important – 72% of respondents said they are more focused on quality than price in the supermarket. Just as significantly, a whopping 90-92% said that health/nutrition and value will be of equal or greater importance in their shopping decisions after the recession finally ends.

The survey included 4,000 respondents from a wide economic scale, from those earning less than $20,000 per year to those earning more than $100,000 a year. In addition to the perhaps surprising result that consumers across the board are sticking with fresh meat and poultry (and coffee!), the survey also showed that store loyalty may be a thing of the past. Forty-two percent said that have changed where they shop for food in order to save money. "Across the board, consumers are taking a very hard look at where they’re spending their money," Blissett commented. "All those areas that supermarkets have spent a lot of money on in recent years, the in-store bakeries and delis, the hot foods, the prepared foods – consumers don’t think they necessarily offer the best value right now."

At the same time, "consumers clearly have strong feelings about meat and poultry’s value. They believe these are value products."

Blissett has pointed out that for most of the 20th century, the consumer-products market, including food, grew by developing products for an increasingly affluent consumer. He told MEATPOULTRY.com that the successful food companies of today and tomorrow will understand the changes in the marketplace rather than make assumptions and will adjust accordingly. Retailers "really need to be on top of their game with regard to consumer trends – when people are shopping, what they’re buying on which day of the week, who’s buying what, all of that. This is where supermarkets and the food industry really need to manage. People are really trying to maximize their food dollar, but they’re factoring in things like package size, convenience and quality as well as price in their decisions."

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