The evidence is piling up like so many aisle displays of boxes and cans: Mainstream packaged goods have an image problem.
Some of the testimony comes from the Hartman Group, whose research has uncovered a growing belief among consumers that packaged or processed foods are inferior.
When packaged goods were in their infancy in the post-war era, wrote Harvey Hartman, chief executive of the research and consulting firm, they captivated the public with their aura of technology, convenience and safety. Those attributes are less relevant with today's consumers, who are making more fill-in trips, often to pick up a prepared meal for that night's dinner.
"Manufacturers and packaged goods are being thought about as kind of second-class citizens," Hartman said.
A consequence of this trend is that among traditional retailers, the format that focuses on perishables is one of only two that are gaining market share. (The other one is the limited assortment, whose appeal is based on extremely low prices.) In these fresh stores, as consultant Willard Bishop classifies them, the Center Store occupies a smaller share of the footprint, and emphasizes foods with a premium and healthful image.
The problem with conventional Center Store products goes beyond changing lifestyle patterns, though. Sometimes, it's manufacturers themselves doing the undermining.
Case in point: trans fats. Manufacturers trumpeted their steps to rid their products of trans fatty acids, whose content now must be listed on nutrition panels. But consumers are starting to figure out that zero doesn't necessarily equal none, it just means less than half a gram per serving.
One dietitian for a supermarket chain said many shoppers don't get why a product that contains hydrogenated oil can claim to be trans fat free. She said that confusion turns to "almost a level of anger" when she holds up examples of packaged foods to show how common trans fats are, even in seemingly innocent ones like fruit snacks.
The Center for Science in the Public Interest is fueling the negative public relations with its swipes against cereal and soda companies whose products it claims are contributing to poor health in kids.
All packaged goods are not alike in the eyes of consumers. Take Trader Joe's, whose mostly store-brand packaged food assortment, affordable and often organic, enjoys an almost cult-like following. The difference is the specialty retailer's brand that extends to its products.
The idea is catching on with conventional retailers like Food Lion and Supervalu that are trying to mimic that success with new formats and store brands.
Unfortunately, it seems many retailers would rather cede decision-making power over their in-store messages to outside parties. As we're reminded by an anti-competition lawsuit recently filed against News America, the News Corp. unit has exclusive contracts with supermarkets to sell in-store advertising.
That practice may be expedient for the retailer, but it doesn't fit what Hartman said is the mind-set of today's shopper, to whom the retailer's brands matter more than the manufacturer's.
Bad news for packaged goods makers, but potentially good for retailers that can figure out how to make a meaningful connection with consumers.
