Market research and analysis firm Packaged Facts gives food and beverage retailers the consumer and product information they need to succeed in 2009.
A genuine shift has started to take place in consumer attitudes and behaviors as a result of the economic woes brought about by the mortgage meltdown, falling home values, tight credit, a declining stock market, diminished retirement and college savings, increased unemployment, volatile energy costs, and rising food prices. Evidence of this change will be seen in supermarkets across the country in 2009 and possibly beyond as the recession lingers.
Tradeoffs
The nearly certain reality that the recession will continue through 2009 is motivating consumers to buckle down and embrace the new reality. Use of coupons, eating fewer meals out and trading down to less expensive restaurants, preparing more home-cooked meals from scratch, and substituting private label products for leading branded items are some of the strategies consumers will increasingly employ in 2009. The Zagat restaurant survey conducted in 2008 found that 38% of respondents indicate they are eating out less often, 37% are choosing less expensive establishments, and 21% are opting to skip the appetizers or liquor. A acroeconomic model developed by ACNielsen suggests that seafood, dry pasta, candy, beer, and pasta sauce are product categories relatively immune to a recession whereas carbonated beverages and eggs are more vulnerable in difficult economic times.
It will be key for marketers to understand the mindset of consumers to make sense of and leverage the belt-tightening approaches they are likely to pursue. The most prominent shifts in consumer behavior will include:
Health = wealth
As more baby boomers continue to reach retirement age, there remains a growing interest in products that promote good health and vitality. However, with today’s added economic woes, the need to feel young and stay active has a new sense of importance.Many baby boomers have decided to delay retirement and remain in the workforce longer as a result of seeing their 401(k) balances dwindle. And given the state of Medicare and the availability and cost of health care in general in the United States, many consumers are beginning to conclude that spending a bit more on food products touting health benefits may serve as a form of affordable insurance to help avoid stratospheric medical bills, particularly for chronic illnesses.
The old ad phrase, “When you’ve got your health, you’ve got everything” may never have been truer than it is now.
Save money, save the earth
Consumers will continue to aspire to more environmentally friendly consumption decisions in 2009, with awareness and interest in eco-friendly seafood, for example, growing. There will be particular appeal for environmentally friendly behaviors that are also easy on the wallet.“Reduce, reuse, and recycle” will become gratifying justification for more socially acceptable purchase decisions, whether for small daily incidentals or special occasion items. Substituting tap water for bottled, cloth napkins for paper, eating more leftovers, shopping for event dresses at consignment shops, and replacing an irreparable appliance with a reconditioned one will become more commonplace.
More importantly, consumers will feel good about these decisions because of the positive benefit for the environment. Consumption of locally produced, even homegrown, foods will continue to gain appeal on environmental and economic grounds.
Simple pleasures
Consumers need occasional distraction from grim economic news. Authentic experiences, those that enable people to regain confidence as a result of their own resourcefulness, will help provide the needed relief.Reconnecting with nature, quality time with family, grow-your-own gardening, and actively teaching kids about values will provide a sense of satisfaction. So, too, will small, inexpensive celebrations.
According to an annual survey conducted by Visa, Inc., 75% of Americans planned to
celebrate Halloween in 2008, with spending estimated at 18% more than in 2007. In addition to wanting something to look forward to, parents didn’t want to disappoint kids.
A look back and ahead
Described below are six key areas that Packaged Facts believes will drive flavor andingredient trends in 2009 and beyond. To gauge how trends are progressing and changing, expectations for last year are compared with predictions for 2009.
World of flavors 2008
In 2008, Packaged Facts expected that Greek cuisine would go mainstream and that there would be more of a fusion approach to Mediterranean food overall. Asian food was anticipated to remain a hot growth area with Japanese food leading, including more Americanized sushi, and Korean food gaining a following outside of areas with large Korean populations. Cuban cuisine was also highlighted for anticipated growth in availability. Ethiopia and Somalia were identified as emerging cuisines, particularly in areas with substantial immigrant communities.World of flavors 2009
One year later, and horizons for ethnic foods are more expanded than ever before. Having moved well beyond the usual Chinese, Italian, and Mexican, world cuisines predicted to get the most attention in 2009 include rustic French for its down-to-earth and comforting qualities, a wide range of Asian, with Japanese becoming more well established and Korean going mainstream, and Mediterranean becoming ubiquitous with a near-term focus on the foods of Spain.Packaged Facts expects that Peruvian food will continue to quickly gain widespread appeal for its fresh and familiar ingredients prepared with new flavor and spice combinations. Kosher appears to be headed more mainstream, as large foodservice operators, such as Subway, open more kosher units. The emerging cuisines of Laos and Algeria will join those of Ethiopia and Somalia as food enthusiasts get to experience them in limited, but expanding, market areas of the United States. Both Hispanic and Asian food retailing is expected to experience significant growth in the United States with independent stores and chains that cater to both immigrants and English-only-speaking-born-and-raised Americans.
Health = wellness 2008
Last year, Packaged Facts expected super fruits, including new types of exotic fruits beyond pomegranate, to dominate antioxidant news and probiotics to extend beyond the dairy category. It was anticipated that foods promoting satiety would be a key way to combat obesity and that more enhanced waters would be marketed to improve beauty and mental wellbeing, as well as help reduce stress and promote relaxation.Health = wellness 2009
Packaged Facts expects digestive health to be the number one health and wellness area in 2009, with emphasis on probiotics, prebiotics, and fiber. Antioxidants, especially those associated with super fruits and omega-3 fatty acids will continue to be important.Processed food manufacturers will continue to address obesity by promoting satiety and reduced calorie foods, closely linked to portion control. Consumers will benefit from more standardized front-of-pack nutrition information in 2009, thanks to a collaborative industry effort. It is anticipated that food and beverage manufacturers will work hard to replace high fructose corn syrup and artificial colors and flavors in existing product lines. Both manufacturers and foodservice operators will likely introduce new items targeting those avoiding gluten. Food and beverages developed to enhance beauty “from the inside out” and promote better-looking skin will gradually continue to make inroads.
Local, organic evolve 2008
It was expected that the major food trend of the year would be local food and the associated notions of 100-mile menus, food miles, country of origin labeling (COOL), and concern about carbon footprint. It was anticipated that organics would become secondary to buying locally produced foods for many consumers. Increased use of farmers’ markets and home vegetable gardening were predicted to be on the rise along with artisanal chefs who grow their own food. A growing backlash against the use of bottled water was anticipated for environmental reasons.
Local, organic 2009
In 2009, Packaged Facts predicts that organic food purchases will be more selective and focused on fresh meat, dairy, and produce, primarily for cost reasons. Consistent with 2008, use of more home vegetable gardening, community supported agriculture programs, and farmers’ markets are expected to rise. There is likely to be more thought around executing local and seasonal menus, including how feasible it is to do so and still satisfy restaurant patrons. Social and ethical concerns, especially fair trade, are expected to take on greater importance, extending beyond coffee, tea, and cocoa, particularly in the United States.Cross-over flavors 2008
The migration of savory flavors into sweet foods was identified as an important trend in 2008. Pomegranate was expected to expand across numerous product categories as a flavor profile, both by itself and in combination with others, beyond its original rise to prominence due to its high antioxidant value or fruit source. Similarly, it was anticipated that the use of wasabi and coffee would expand into more product categories.Cross-overs 2009
Packaged Facts expects that expanded use of savory flavors in sweet foods will continue to be a big trend headed into 2009, with bacon being an, if not the most, important ingredient. Herbs traditionally associated with savory foods, such as fennel, are also likely to be featured in sweet foods. Mojito will no longer be synonymous with a cocktail in 2009, as the flavor profile created by combining rum, mint, and lime continues to go mainstream across various food and beverage categories.Savory selections 2008
Last year, it was predicted that eco-friendly seafood and natural, grass-fed, organic beef would be compelling foodservice trends along with the greater use of eggs, both for breakfast and other parts of the day. Artisan cheese was identified as going mainstream, and a growing interest in American charcuterie, niche pork, and goat meat is anticipated.
Savory selections 2009
For 2009, Packaged Facts expects that dark meat, heirloom and pasture-raised chicken, and upscale burger joints will be two of the most talked about protein trends. Economy meat cuts and ways to reduce protein portion size in foodservice, beef cuts marketed to Hispanics, eco-friendly seafood and sushi, and American artisanal cheese will also gain in importance. Brown rice will continue its mainstream movement in frozen and prepared meals at retail while more innovation and expanded offerings are predicted for vegetables at retail, both fresh and frozen.Sweet salvation 2008
Last year, Packaged Facts predicted that both dark chocolate and bite-sized desserts would be the hottest sweet items in 2008, with savory and sweet combinations continuing as an important trend. Cheese courses and cheese plates were expected to become more common, along with blurring of meal courses. More ethnic desserts andco-branded desserts were also anticipated.
Sweet salvation 2009
This year, Packaged Facts expects bite-sized desserts to become a permanent part of nearly all dessert menus, if not the only type available at some restaurants. Given that the primarily health-related preoccupation with dark chocolate has peaked, more moderate focus on chocolate is expected overall, with slightly more milk chocolate emphasized. The chocolate covered pretzel fad will start to die down while ethnic frozen desserts will gain greater appeal.Consumers will hear about, see, and try more sweeteners positioned as natural, both caloric and non-caloric, including stevia and agave, and specialty yogurts will gain more of a foothold in the US market.
Packaged Facts, a division of MarketResearch.com, has been a leading publisher of market research in the food, beverage, consumer packaged goods, and demographic sectors for more than 40 years. Our comprehensive, timely, quality research and presentation of market intelligence have made Packaged Facts a premier source of market information for top industry decision makers. Learn more at www.packagedfacts.com.
