From Walmart to Whole Foods: What Are Shoppers Looking For?

August 7, 2014, Global Food Forums, Inc. — The following is an excerpt from the Ingredion-sponsored “2013 Clean Label Conference Report.”

2013 Clean Label Conference-Linda Gilbert Chart

Click to view PDF of chart.

Gone are the days when products like Cool Whip,Tang and Velveeta reign supreme. This is an era where the consumer is king, and food providers must understand what their shoppers desire—and respond accordingly.

“Consumers have been pulling us back from the ‘Better Food through Chemistry’ path over and over and over again,” explained Linda Gilbert, CEO and founder of EcoFocus Worldwide. “Now, consumer perception is the reality of the marketplace that we need
to deal with….The consumer has become the voice, not the audience.”

Gilbert’s presentation focused on how stores use private label brands to enter the clean food category in response to their shoppers’ interests and concerns. “It’s important to look at consumers through the lens of where they shop, or through the lens of what
they’re expecting through your particular brand.”

Growth in private label brands is outpacing national brands, Gilbert
said, and store brands are no longer mimicking national ones, but instead are
focusing on innovative, clean label products and packaging lines of their own. In turn, this is differentiating retailers in the marketplace, as well as increasing shopper loyalty and profitability.

When EcoFocus asked consumers what goes into their decision about where they’re going to shop, Gilbert said, “It’s no surprise, given the economics today that affordability is at the top of the list.” But, what may come as a surprise is the fact that moreis the fact that more than half of respondents (54%) said that the selection of natural products is either
extremely important or very important to them. That’s right up there with healthy options (65%), local product selection (55%), organic product selection (45%), and if the store is environmentally friendly (50%) and socially responsible (47%).

Digging deeper, EcoFocus separated the results by retailer and also asked those shoppers if they felt the retailer had a wide selection of natural products. At the top
of the list, 80% of Whole Foods shoppers think a wide selection of natural products is important to them, and 82% said the store offered a wide selection. Trader Joe’s had similar results at 74 and 77%, respectively.

But other retailers on the list didn’t have the same luck, as large gaps appeared between the numbers. Natural products are important to Costco, Sam’s Club and Target shoppers, for instance (at 66, 62 and 67%), but only 35, 35 and 33% of their shoppers think the stores have the wide selection they want.

“A lot of consumers are looking for that wide selection of products,” Gilbert said, “but there’s often a gap between what the store is doing for them and where consumers
see the importance being.”

EcoFocus’ research also delved into retail customers’priorities within the clean label category. The highest priority among Target shoppers, for instance, is “no artificial ingredients,” and another high concern is GMOs. That’s why Target has their Simply Balanced brand, which excludes 105 common, artificial ingredients and many
products with GMOs.As opposed to the Target example, Walmart shoppers place higher priority on healthy choices (65%) than natural choices (55%). “So, it makes a lot of sense that the Great Value products emphasize lower sodium, fat and sugar…more than talking about avoiding preservatives, artificial flavors or things of that sort,” Gilbert said.

Both Target and Walmart have made pledges to their shoppers to increase loyalty and deliver the products they want. In Target’s case, the promise is to eliminate GMOs from the Simply Balanced line by 2014. In Walmart’s case, it is to reduce sodium and sugars in Great Value products by 2015, plus decrease fruit and vegetable prices.

Gilbert went on to describe very similar efforts from Costco, Kroger’s, Wegmans, Publix, Whole Foods, Trader Joe’s, A&P and Safeway with their private label products. “These brands are accounting for almost 25% of store revenues at some of these retailers today.”

These private labels have become so successful that Gilbert said they may start becoming retail brands themselves. Publix has done this very thing with its Greenwise line and subsequent Greenwise Markets. “So, if you’re a CPG manufacturer, you better wake up and look at what’s going on,” Gilbert urged.

The amount of variables within the clean label trend continues to grow, as customers’ desires evolve, and Gilbert said that has led to an evolution among providers. They are marrying the concepts of clean, natural and organic with others, such as sustainable, local, environmentally conscious and socially responsible. This is affecting everything, from the ingredients in the food and where it comes from to its packaging materials and easy-to-understand labels.

“There is no single clean label consumer out there,” Gilbert began. “It can even vary from category to category. What they expect from a cereal may be different from a snack. So, you need to understand those nuances in order to provide products that are going to have a long life of success with consumers.”

Linda Gilbert, CEO and founder of EcoFocus Worlwide, Linda@ecofocusworldwide.com or +1.727.906.3319

 

Posted on:August 7, 2014

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