Kraft CEO Tony Vernon highlights the changing consumer behaviour in America

Kraft CEO Tony Vernon highlights the changing consumer behaviour in America

Food manufacturers will have to adapt their prices and product offering if they want to remain relevant to a consumer now shopping in different ways, Kraft Foods Group CEO Tony Vernon has said.

Speaking to at the Consumer Analyst Group of New York conference yesterday (18 February), Vernon said consumer buying patterns had dramatically changed in recent years, in part due to the downturn. 

Planned shopping trips were dominating the mix and impulse buys had dropped.

"This is largely due to the income pressures on American families," explained Vernon. "It would also explain why consumers have become less responsive to promotional marketing that so many companies in our industry hope will boost their volumes," he added.

He noted consumers were increasingly shopping in the less traditional channels of trade such as dollar outlets, club stores and online.

"The customer base infrastructure is changing. That means if we want our brands to compete effectively in those channels, we have to have the right price pack combination in a single unit to satisfy the consumer for that purchase occasion. And in more cases than not, a different pricepack architecture than they'd find in traditional stores," he said.

Grocery volumes in the US have been in the doldrums for a number of years and there are some concerns sales will struggle to rise this year, with economic gloom hanging over the country.

However, Vernon was optimistic about the outlook for the sector.

"I've heard the bearish talk about our industry's prospects and I'm just not buying it. Those who can adapt, can contemporise their offering, who can get their products in the right breadth of locations at the right price - they will prosper.

Nevertheless, he added: "We have to adjust. There's no question about it."