Consumers

UK Government plans to bring in legislation banning BOGOFs and 3 for 2 on unhealth foods from April 2022, Scottish Government will likely follow suit, having already committed to bring forward the necessary legislation.

Consumers are likely to respond positively to this new legislation, as we know from our research that they want manufacturers and retailers to make it easier for them to make healthier choices. Only time will tell if they actually will in reality.
It was interesting to see that when asked what influences their decision to buy a product or brand, offers are lower down the list than I might have expected (it does vary by retailer, offers being more important to Asda shoppers than they are to Waitrose ones).

Our latest tracking survey also shows that 30% of consumers have made changes to their diets/lifestyles in the last 3 months for health reasons which is encouraging, however it is the 25% who feel they need to make changes but who haven’t, who are most likely to benefit from these restrictions.

Categories

It will be interesting to see how the categories affected by the legislation respond, these include, confectionery, cakes, biscuits, crisps and what mechanics will be used to drive growth. Shall we see the emergence of a real EDLP strategy for some or will the reality be that there is a greater emphasis on high/low pricing, with consumers tempted to still buy more than they need while they are offer (and then in most cases, consume more than they had intended)?

I know I for one always buy my favourite Greek yogurt brand when it is on offer, just switching from the 1kg pot to three 500g ones when I can see that they are better value. When asked what changes they (the 30%) had made for health reasons, it was encouraging to see the majority were consuming more fruit and vegetables but also interesting to see that younger consumers were cutting back on sugary drinks (free refills in restaurants are also prohibited under the new legislation).

Companies

This legislation does pose a challenge to brands who have relied on promotions to drive sales, it will be difficult to demonstrate to a trade buyer year on year growth. However, I guess there will be comfort in knowing that competitors in the category will have the same issue. It will be interesting to see if companies take a channel strategy and offer BOGOF’s in the independent trade where they will still be allowed. If this happens and consumers start to buy two chocolate bars on impulse instead of the one they intended, surely it will hasten the decision by the Government to extend the reach of the legislation?

With less than a year till this legislation takes effect in England, how should companies respond? By investing in the longer term, by taking a serious look at their approach to the ‘long and short’ of it. Given the compiling evidence put forward by Field and Binet, now more than ever companies should be investing in long term brand building and ensuring @60:40 budget split in their marketing budget and ensuring consumers really understand their meaningful difference and how they benefit from it.

Consumers

Do they, or don’t they care? That is a question we are increasingly asked by companies when it comes to understanding whether or not consumers care about brands’ sustainability credentials and if they are willing to pay more for ethically produced goods. The reality is, there is no one right answer to this.

As is always the case when we talk about consumers, no two are completely alike and what one considers as a key sustainability issue, another may not even have on their list of concerns. Packaging is however, the number one issue on consumers’ minds when it comes to food and drink.

Our latest Tracking Survey highlighted packaging as the area they felt that food and drink manufacturers should be prioritising their efforts when it comes to environmental steps to focus on.
We know from previous studies that UK consumers feel it is the responsibility of manufacturers and retailers rather than themselves to make strides in this area, however it is interesting to see that over 45% are now being proactive themselves and actively looking to reduce food waste as a way towards helping tackle environmental damage.

Categories

There are certain categories where consumers’ concerns around packaging are already leading to changes in behaviours. For instance, our research found that 32% actively avoid buying bottled water. The publicity around single use plastics and the ‘Blue Planet Effect’ has resulted in consumers actively switching to tap water. However, safety still trumps the environment as they continue to buy more wrapped fruit and veg than they did in pre Covid-19 times.

Taking two completely different categories eg water and red meat, we can see very different environmental concerns come into focus. This is where companies need to think about the greatest impact their category has on the environment and focus on innovative solutions to address these. Red meat will need to be packaged in recyclable materials for sure, but its greatest challenge will be to address all the negative publicity around the environmental impact of methane gases from cows.

Companies

Companies looking to become more environmentally friendly, should not assume that consumers will rush to reward them for their efforts. However, over time it is increasingly likely that those companies focused on sustainable brands and products will see value added to the bottom line. Unilever’s Sustainable Living brands are testament to this – growing 69% faster than the rest of the business and delivering 75% of the company’s growth.

Growth will only come if businesses truly understand what the consumers of their category are looking for when it comes to sustainability. When consumer needs are understood, these same businesses need to recognise that it will take a nudge strategy and marketing campaigns focussed on emotional storytelling rather than lots of facts to get consumers to move from thoughts and feelings to actual behaviours in favour of the environment. Led with emotions, they will generally override rational thoughts.

Consumers

The results of our 5^th Covid19 tracking survey are out!

As we look forward to a more positive year, our survey revealed that consumers are looking forward to the simple things in life – family, friends and health. But money is also on many of their minds.

We’ve all been forced to shop differently, however these new habits are going to stick. Consumers have got used to shopping less frequently with many switching to online shopping. They are embracing the changes too, with over 40% viewing Covid19 as a catalyst for developing new habits like scratch cooking, exercising more and eating more healthily.

Categories

As we enter the spring and summer, the big change is likely to be the re-start of small family gatherings and increased outdoor socialising. This may bring opportunities for food to go operations to create more engaging offerings based around sharing for small groups and picnic opportunities rather than individuals.

The rise in scratch cooking is likely to have a lasting effect. But consumers are wary and looking for inspiration, like family-friendly meal ideas that help them increase their repertoire. Boredom is kicking in, so that classic marketing tactic of simple recipe suggestions has never been more relevant. Just look at how baked feta has captured the imagination of the world!

Companies

Grocery retail continues to be benefiting from the closure of Foodservice. However, the comparative sales will start to come under pressure over the coming months. It has never been more relevant to think about your strategies and prepare for the next phase – recovery.

Step back from your category, think about how your consumer is living, and tap in to how their core needs are changing – because they almost definitely are.

It’s not all about scratch cooking though. There are new opportunities to take the lead on food waste, packaging, environmental leadership and helping your consumers lead healthier lives – physically and mentally.

Download our latest report here.

Consumers

In January 2010 there were 3m searches for ‘Vegan’ in the UK. Fast Forward to January 2020 and there were 100m searches. The Vegan movement has changed from an Activist-based political statement to a more wholesome, socially acceptable and responsible lifestyle choice, aided by the hugely successful ‘Veganuary’. The event has gone from a standing start in 2014 to have over 540.000 signups in 2021. The popularity of Vegan Foods is only going one way.

Only around 1% of the population are Vegan, so although the market may appear small, the reach is far greater. Levercliff’s January 2021 tracking survey found that 11% of all non-vegan consumers were taking up Veganuary 2021 – a significant number, with 9% of all consumers buying specifically vegan foods, rising to 17% in the 18-34 age group. Why? The top reason was to aid weight loss, to kick start healthy eating, for animal welfare reasons and to support others who are also doing it.

Categories

As a category, Vegan foods performed strongly in the retail market in 2020. Granted, most categories have performed strongly due to Lockdown boosting retail food and drink spending, but Vegan foods have been performing ahead of the category. According to Kantar, chilled vegan sales growth was over 25% in 2020, more than double the rest of the category, while in frozen, vegan growth was 15% versus 13%.

These type of numbers make retailers very happy, and encourage increased space, SKU count and innovation. Exactly what we’re seeing across most retailers.

Companies

January has become the time of the year to launch Vegan products. The failure rate appears significant, but the innovation levels are high. This year we’ve seen large scale investment from the Coop into their ‘GRO’ range, while Asda have followed Sainsburys lead from a few years ago and launched a Vegan Butcher called ‘Veelicious’. They claim it’s a ‘test and learn’ trial to see what resonates with consumers.

Product wise, there’s been a distinct focus towards ‘fixing the basics’, with a number of ‘staple foods’ becoming available in Vegan varieties including a broader range from Heinz, liquid egg from Crackd, ‘milk’ chocolate from Galaxy and a broad range of vegan mince meat alternatives.

If your company hasn’t seriously developed a plan for Vegan products, now is the time to think seriously about it.

Consumers

The four UK Governments have agreed to ease restrictions over Christmas with three households able to form a bubble for four days from 23^rd December.

For consumers, that’s likely to mean Christmas will start early. Gatherings are likely to be smaller, but they may last longer. We might see smaller parties, and the perfect opportunity to exclude that annoying uncle from the celebrations! But with the relaxations stopping short of New Year, that’s likely to have a big impact on usual celebrations.

We’ve seen evidence that consumers are getting prepared for Christmas early. With the added nervousness of Brexit, and financial worries, many are avoiding last minute panic buying. We’re also likely to see a continued shift to online buying as consumers seek to avoid crowded Christmas shops.

Categories

Changed consumer habits have an impact on categories in different ways. Typically, it has been alcohol, bakery, confectionery, biscuits, crisps and savoury snacks that have benefited from an uplift in Christmas sales as consumers seek to indulge.

Alcohol is likely to be the ‘big-win’ category in retail. In line with the months since the lockdown restrictions were implemented and hospitality is still being so curtailed. We’re likely to see more consumers trying something new, trading up.

It could also be a make-or-break period for key categories.  Cake sales have suffered during the lockdown with consumers home baking more.  Christmas is normally a lucrative period for the cake category and one the producers will want to get right after a disappointing year.

Whilst there might be an uplift in the week leading up to Christmas several consumers may have the future in mind which could ultimately lead to moderate consumption. The requirement for more planning and subsequent lockdown restrictions could lead to more considered purchasing.

Companies

This isn’t a ‘normal’ Christmas and New Year, so for companies, it’s a time to think beyond normal too. With only a few weeks until Christmas, the path is set for most. But there is still time to maximise your communications, ensuring they are absolutely relevant to your target consumers. It’s a time when new consumers might be buying in to your category and product, so get to know them.

It’s also a brilliant time to see what other food and drink companies have been up to. Get in store and keep your eyes open. Don’t just look at your own category and competitors, but look left and right. If you don’t see something and think ‘I wish we’d thought of that’ or ‘we could do something like that’ you’re not looking hard enough.

Consumers

I’d never heard of a K-shaped recovery until this week, but it makes sense. It predicts more affluent professionals being less affected by the Covid recession, and recovering more quickly; while those in retail, leisure and manual jobs are more severely impacted, recovering  at a much slower rate. This trend would appear to be emerging in our lockdown households with wave 4 showing increasing concerns around job losses.  If you haven’t read it yet, click here.

This ‘great divide’ of money is being matched, during Covid-times with a ‘great divide’ in confidence around safety too. Older consumers in particular are uneasy about going out, and with local lockdowns in place across areas of the country, and the arrival of winter weather, it’s all looking a bit depressing.

When things are starting to get tough, I like many consumers look for comfort in food form.  Whether it’s sharing something baked on Instagram, cooking a romantic meal, or making a simple family meal, food connects us as well as giving us a sense of purpose.

Categories

Every category is different, but for me, this concept of a K-shaped recession is an interesting way to think about changing consumer missions within categories. It suggests that categories are likely to need to meet the missions of two distinct consumers with polar opposite needs. On the one hand those highly motivated by value for money, and on the other will those driven by quality and premium products. Common to all, is a change in lifestyle i.e. less frequent eating out, either because of restrictions, anxiety or financial constraints

This all suggests to me, that now is not the time to stop innovating. Rather, really understand how your consumers’ needs are changing and evolving, and how you can meet their needs. It is becoming increasingly likely that this isn’t going to be a short sharp V-shape recession so we need to prepare for the long haul and ensure that in retail at least, categories thrive through innovation.

Companies

There are a few simple examples of retailers innovating to suit this K-shaped recession. Iceland with their increased promotion of their exclusive Greggs range, while Co op and Asda have concurrently launched a new range of ‘takeaway at home’ meal kits, developed during lockdown. We’re all familiar with this concept for ethnic food, but their Piri Piri boxes feels inspired to me.

The other end of the spectrum is where Foodservice outlets have had an interesting impact. While many have been forced to close (especially in Scotland), the return of restaurant meal-kits is very much to the fore, with average prices for cook at home meals of £40-£50 for 2. It’s a level of spend detail and personalisation we just don’t see in food retail and is likely to appeal to those less impacted financially by the recession.

So, what’s the big message? Think about how a K-shaped recession would affect your business now, do you know where do your consumers sit in terms of likely impact, and in a year from now what can you say you’ve done to help them weather the storm. Be clear what your role is in the categories you operate in.

Consumers

I often wonder (as I’m sure many do) what lasting effects of the lockdown will be on consumers’ behaviour.

One of the key behavioural changes that Levercliff and others have reported on is how consumers eating and drinking behaviours have changed – some forced, others chosen.

I think it’s only possible to really understand how these behaviours will evolve over the medium and long term by discovering and monitoring underlying consumer feelings, needs, attitudes, and circumstances. For every observed behaviour there are a multitude of different drivers.

For example, if we take one behavioural change – cooking from scratch more – the potential drivers for this increase are numerous.

-Time - I have more time to do so

-Enjoyment – I’ve learnt/relearnt a new hobby that I enjoy

-Nurturing - I want to protect and nurture my family

-Mindful - As a creative activity it helps with feelings of anxiety

-Health - I/we are trying to eat more healthily

-Thrift - It’s cheaper to cook from scratch

-Shopping anxiety – I’m shopping less often so planning my meals

-Appreciation - I like to show off my culinary skills to friends & family (e.g. on social media)

Categories

As many people like me return to a more ‘normal’ pace of life, the daily commute, children returning to school, they may have less time to cook but the other feelings, needs and attitudes will not necessarily go away.  How can categories evolve to fulfil these needs?

Some convenience food categories, such as ready meals have suffered as a result of the renaissance in scratch cooking.  A change might mean a greater focus in ready meals on home style recipes (home fridge/store cupboard ingredients) or family targeted options.  Or a renewed attempt to make the recipe kit format work in retail…perhaps less structured or lower priced.

For ingredients categories I can see a renewed focus on quick, easy and affordable, reminiscent of Jamie Oliver’s and Sainsbury’s Feed a Family for a Fiver campaign in the last recession.

Companies

I think there’s an opportunity for brands to remain relevant and gain deeper connections with their customers by being sensitive to needs and sentiments as they evolve.

A good example of a company quick to diversify to fulfil a need was a company local to me, Robert’s Bakery, launching a direct to door bread baking kit early in lockdown.

Again, to go back to the last recession, brands that did well tapped into prevailing needs at the time…an affordable treat (lipstick effect), an affordable weekend treat (the big night in).

However, with a new set of circumstances it may be different this time.  Keeping close to what your customers are thinking and feeling is as important as ever.