Bob Dylan sang, “You don’t need a weatherman to know which way the wind blows.” And you don’t need subscriptions to high-priced marketing insight newsletters to know the mind of the American consumer. You just have to read the headlines. To wit:
- Restaurant chain Panera Bread commits to ridding its menu of artificial colors, flavors, sweeteners and preservatives.
- Chipotle says it won’t use genetically modified organisms.
- McDonald’s says it will buy chicken from suppliers who “only use antibiotics that are necessary to the health of the chicken.”
- Kraft Foods says it will remove artificial preservatives and synthetic colors from its Kraft Macaroni & Cheese products.
- Unilever’s Fruttare brand will source sustainable fruits for its frozen juice bars.
Then there are the op-ed pieces about how food is made, where it is made, what ingredients are used, how many ingredients are used, the humane treatment of animals and whether foods are better raw or processed. Meanwhile, the mainstream consumer is buying more organically produced foods and beverages.
Who talks about protein and carbohydrates? Does nutrition matter to the American consumer? In a word, “yes.” But the longer answer is that food has to fit into a consumer’s much broader concept of living a healthy lifestyle. The decision tree in deciding to buy a food or not includes the food’s nutritional value, the presence of natural ingredients, the absence of “chemical” ingredients, less packaging and the manufacturer’s environmental practices.
A survey of food shoppers (mostly mothers) found that 86% say nutritional content is “extremely important” as they make choices for their families. Qualtrics surveyed 1,140 mothers in 2014. The majority is married with one or two children younger than age 18. The survey was commissioned by a food ingredient supplier.
As the director of dairy and frozen foods for Daymon Worldwide, Stamford, Conn, Christine Bellamo follows shopper trends. She said nutrition is important to grocery shoppers. They want to know about protein and sugar content, for example. Besides reading the nutrition panel, consumers also are reading the ingredient statement and other on-pack messages. They are seeking to learn what they consider to be the overall benefits of the food, Bellamo said. Those could be manifested as less processing, more protein or the existence of probiotics.
The growth of organic foods
One category consumers want is organics. Nationally, sales of organic food and nonfood products rose 11.3% to $39.1 billion, according to the Organic Trade Association. In the organic dairy sector, sales jumped almost 11% (to $5.46 billion), the biggest percentage increase in six years.
Do consumers know what they are getting when they buy organic food? A study from market researcher Mintel casts doubt on consumers’ understanding of the category. The Chicago-based firm said, “Americans appear confused about the benefits of organics, with many perceiving the organic label as nothing more than an excuse to sell products at a premium.”
It’s true that organic dairy foods cost more (see table on facing page). With a gallon of organic milk selling for $6.26, a shopper could buy two gallons of conventional milk and have change leftover, according to a survey by the U.S. Department of Agriculture.
Mintel found that women choose products that avoid certain characteristics: 43% purchase them because they do not contain unnecessary ingredients or chemicals, and the same percentage do so to avoid food made with pesticides.
Sweeteners and colors
High sugar content has been a topic of conversation. Label readers are looking at how many grams of sugar are in a serving. Bellamo said the popularity of Greek yogurt has re-set Americans’ threshold for sweetness. We have become accustomed to the more-tart/less-sweet taste of the dairy food, so manufacturers can get away with using less sugar in their formulas.
It’s true with conventional yogurt. In May, Yoplait said it has reduced sugar by 25% in each single-serve (6 ounces) cup of its Original line of yogurts (which also reduced the calorie content by 20). All of the flavors have 18 grams of sugar. To compare, Dannon’s fruit-on-the-bottom strawberry yogurt has 24 grams of sugar and Chobani’s strawberry has 15 grams in 5.3 ounces (equivalent to 17 grams in 6 ounces).
What’s on the label matters. A lot. The Qualtrics survey found that women read labels for artificial ingredients, sugar, calories and other items. The survey found that 71% of shoppers believe the foods they eat affect their quality of life. For nearly 25%, the primary purchase factor is the absence of preservatives, synthetic colors, allergens and genetically modified organism. The survey was commissioned by Chr. Hansen, a supplier of natural colors to the food industry.
Transparency and education
Those shopper moms in the Qualtrics survey are hungry for information about food ingredients. They read articles, search the internet and watch the news.
One way to educate and engage current and potential customers is to build an online community. That’s what Tillamook County Creamery Association did this year. The 106-year-old dairy farmer cooperative makes cheese, ice cream, butter, sour cream and yogurt. The online community, called The Tillamook Co-op, allows the dairy brand more flexibility in talking with consumers than a Facebook page, said Joe Prewett, the director of product management and innovation.
He said the community does not represent “a revolution” or a re-invention of the brand. Rather, it is a case where “the culture has caught up with us,” he said. The company has been making cheese since 1908 and hasn’t changed its recipe. The co-op is where members talk about the love of “real food,” said Marketing Coordinator Katie Weltner.
Tillamook has been overwhelmed by the response. In a little more than four weeks, 40,000 individuals joined the co-op. They are invited to a one-day annual meeting this summer (members can participate online if they can’t attend in person) to propose ideas for flavors and products. Members can win prizes, like dinners with chefs.
Food and then some
To sell food today, marketers have to broaden their view of their business. It is not enough to sell a food; you have to sell a lifestyle of health and wellness. The product has to be positioned in this framework. Consumers do care about basic nutrition, and dairy has an advantage here. Milk, cheese and yogurt are affordable sources of protein. Make sure you tell that story. The gallon jug of milk is ceding territory to refrigerated plant-based beverages (especially almond milk). Because retailers are not adding refrigerated space, they are making business decisions based on what sells. Products that don’t will be dropped. The dairy industry has to protect its turf.
Dairy foods are often locally sourced and minimally processed. Consumers care about these issues, and they are messages processors have to share. Organic processors have to bear an additional burden: they must counter consumer skepticism and cynicism. Mintel found that 38% of consumers “regard organic as a marketing term with no real value or definition.”
When talking to consumers about food, it is important to be transparent about ingredients, processes and business practices. Dairies have to invest in resources so that they can be available to customers and answer their questions honestly and fully.
The world of food is more complicated than ever before. But people need to eat. Your challenge is to make sure that your foods are the preferred choice. It’s not an easy mission.