Calls to make country-of-origin labelling mandatory in the EU are a reminder of how much more attention consumers are paying to the quality and provenance of the food that they buy. But they are also chasing deals and this easy switching between low cost and luxury suggests a somewhat schizophrenic behaviour.
On the one hand consumers are paying more attention to where there food comes from as they seek to nourish their bodies and souls. The recent crisis to befall the European food sector over the presence of horsemeat in their products highlights consumers are prepared to respond when food quality is in question.
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Elsewhere, in other categories, there has been an increased focus on diet, which is driving shoppers to buy healthier products such as yoghurts but with a little bit of luxury added, such as indulgent flavours like cream caramel, honey and chocolate.
At the same time, they are using coupons and discounts more frequently and choosing products based on their value – which is more attuned to finding the best balance between quality and low cost that they can rather than just about the cheapest price product.
Two key consumer shopping trends – food provenance and the household squeeze that is forcing consumers to pay more attention to how much they spend – are also combining to boost ‘buy local, eat local’ initiatives. Shoppers are buying more seasonal and organic products and spending more time at local markets and stores as a result. These trends are driven by the rising cost of raw materials, as well as increased transportation costs. Since manufacturers are no longer able to contain these price rises within their already small and strained margins they are now being reflected in the rising price of food.
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As a result, many local products are more competitively priced, perhaps also helping shoppers make more ethical purchasing decisions.
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By GlobalDataThe last SymphonyIRI Topline Trends report in Europe (for the third quarter of 2012) shows price increases are slowing down – but it is likely consumers will continue to demand quality at a reasonable price.
Retailers should respond to these trends by creating more transparency in where food comes from so that shoppers can continue to make more informed decisions on store. In this respect the plans to label food with its country of origin is a step in the right direction. Retailers may also form purchasing groups to make the supply-side practices of filling shelves with food that is sourced locally easier to manage.
Environmental issues are driving change in retailers too. In Italy for example, Coop is advertising information about the quality of tap water on the shelves above its bottled mineral water. This Acqua di Casa Mia (Water from my home) campaign is intended to encourage more shoppers in Italy to buy less bottled mineral water.
Price is perhaps not the beating of heart of the battle for shoppers after all. Retailers and brands alike will need to pay attention to quality as people become more concerned about the food they buy.
