Growth Requires Knowing What Resonates With Shoppers

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Growth Requires Knowing What Resonates With Shoppers

By Cyndi Loza - 07/27/2018
Nielsen’s Sarah Schmansky

Oak Brook, Ill. — While sales of honey have declined in the past year, sales for SKUs using honey as a sweetener – such as vitamins and supplements, pet food and processed meat – have grown during the same period. Similarly, interest in coconut oil has declined over the last year, but beauty, personal care and pet care products with coconut oil as an ingredient have increased in sales. “There are brands that are ... uniquely innovating with products that may not necessarily be growing as a category but that are resonating with consumers to fulfill some other type of need,” said Sarah Schmansky, vice president, fresh growth and strategy team, Nielsen.

Schmansky shared these and many other insights during a May presentation at TransparencyIQ, a Path to Purchase Institute event, that shined a light on current consumer trends and behaviors, the impact of specific ingredients by category, and the growing importance of sustainable products and the people that buy them. “Knowing what is resonating with shoppers, knowing what claims and what attributes and which ingredients fit the mold by category is crucial to maintaining growth in this challenging environment,” Schmansky said.

According to Nielsen’s 2017 global survey on sustainability, 67% of consumers want to know everything that goes into the food they buy. Moreover, 37% of consumers are following a specific diet in 2018, up from 35% last year and 29% in 2016.

One diet trend the company is keeping a pulse on is plant-based products. Sales for traditional plant-based SKUs, such as tofu, granola and brown rice, have declined in the past year, but innovation within the plant-based space has been booming with products such as veggie noodles and plant-based yogurt, cream and pizza showing strong growth, Schmansky said. She also added that while artificial sweeteners, high-fructose corn syrup and aspartame are declining, plant-based sweeteners stevia and monk fruit have increased their dollar growth from last year.

Beyond ingredients and diets, consumers also care about how products are made. According to Nielsen’s survey, 68% of Americans say it is important that companies implement programs to improve the environment, 48% say they will change their consumer habits to reduce their impact on the environment, and 67% will be prioritizing healthy or socially conscious food purchases this year.

“We care more about the world around us,” Schmansky said. “We want our purchases to impact the world in a better way than in the past, and we’re really asking brands and companies to follow suit and to help us make those better decisions.”

Sustainable product shoppers are a growing group and tend to purchase products online. Shoppers with a lifestyle of healthy living and sustainability are 67% more likely to be digitally engaged, 22% more likely to shop on a handheld device and 12% more likely to use handheld devices in the physical stores, Schmansky said. Sustainable product shoppers also tend to be more affluent with families as they’re 66% more likely to have children under 6 and 47% more likely to live in households with incomes of more than $150,000, according to Nielsen.

Sustainable products in the past few years have been expanding quite significantly as well with 64% of households buying sustainable products (up 4% from a year ago), Schmansky said. Specifically, dollar growth for grocery SKUs with a sustainability claim grew 6% compared to a year ago while products with the same claim in departments such as deli and meat saw double-digit growth (upward of 56%).

Sustainability claims – such as non-GMO and Fair Trade Certified – on certain products resonate more with consumers than others. For example, sales for nutritional bars and coconut water that meet the fair trade requirements are increasing significantly while ice cream with the same claim not so much.