Healthy Growth

ELLIOT ZWIEBACH

DALLAS — A strong interest among consumers in buying and eating healthy foods offers significant opportunities for the food industry to create new products to meet that demand, according to a new study that was released here last week at the inaugural Healthy Foods International Exposition and Conference.

With consumers indicating they are willing to pay a premium for healthy foods, the study recommended that the industry market such products as a way for consumers to manage their health conditions; offer more private-label and prepared-food solutions in the healthy foods category; and make more locally grown and natural products available at the supermarket.

The HFI meeting was sponsored by SN and New Hope Natural Media, both divisions of Penton Media, New York.

The study — which solicited feedback from the industry and from more than 1,000 consumers in November 2007 and again in May 2008 — was designed to gain insights into the motivations, attitudes and behaviors of U.S. grocery shoppers and to make recommendations as to how the data should be implemented.

Despite the price increases they've seen over the past few months, consumers in the study said purchasing healthy foods remains a priority, “[which means] there are important new opportunities for retailers and manufacturers to build a healthy foods business through product development and placement and through effective communications.”

Respondents indicated they were spending approximately 7.7% more on healthy foods in May than they did in November — $191.45 per household per month, compared with $177.69.

“This appears to be both an acceptance of actual inflation in organic food prices and a deepening desire to find alternatives to conventionally produced goods,” the study noted.

The survey indicated that 97.7% of respondents spent a portion of their grocery budgets on healthy foods in May, up from 96.5% in November; it also said 47.6% of households reported that at least half their purchases consisted of healthy foods.

Consumers rated “eating healthy foods” as the most important of 16 lifestyle decisions and priorities, ahead of exercising, taking vitamins or health supplements and managing weight, according to the survey.

Asked to rate attributes they consider important when they shop, 57% of respondents said they look for products with whole grains; 56.9% said they look for products with reduced trans fats; 56.4% cited reduced saturated fats; 53.6% mentioned reduced cholesterol; and 51.8% named dietary fiber.

“Consumers judge healthy foods by specific ingredients,” the study pointed out, “so the industry needs to watch for “the next ‘everyday superfood’ to parallel whole grains.”

FOOD SAFETY

Consumers also put a high priority on food safety, the study indicated, with 71.4% saying they are concerned with pesticides in fresh produce, while 68% cited pathogens in produce and 65.2% cited pathogens in meat and dairy products.

Because consumers who are concerned about food safety tend to spend more on healthy foods, the study said, reassuring the public about the safety of the food supply offers a potential marketing opportunity.

Asked what items they buy less often because of safety concerns, 11.5% of consumers cited salmon, followed by beef at 10.6%; herbal medicine, 10.4%; spinach, 10.3%; and lettuce, 9.5%.

“Although some of these foods received negative publicity years ago,” the study pointed out, “health scares can have long-lasting fallout.”

Based on consumer responses, certain patterns emerged concerning large-scale food scares, the survey indicated. “By recognizing these patterns, we can see a pathway to success,” it said.

The study found most of the information consumers receive about threats to food safety is secondhand, based on input from friends or relatives “who often reinterpret original information,” it indicated.

“Bad news travels more quickly than good, and when things are complex, the simplest response is to stop consuming something altogether,” the study said.

“And it's a long way back if you stay on the same road. But in the face of a food scare, consumers seek out alternatives that can provide security.”

Because there is “a lot of frenetic energy around food and health right now,” the study said, retailers and manufacturers should anticipate that their product will be the subject of a safety-related challenge at some point and figure out a plan in advance.

“Food trends and scares play out in predictable and highly impactful ways,” the study said. “Be prepared to take advantage when the bad news breaks.

“Once the product recall and the crisis communications are over, you must rebuild — after assessing the scope of the scare and identifying any problem as a process failure. Even individual human action is a process failure if the problem could have been corrected.”

When a crisis occurs, a company should cut ties with the past by letting the public know the agent that caused harm is gone for good, and then build a credible story around its new investments in safety, the study suggested.

“Consumers want alternatives. Create them. Create new standards and/or alternative brands and products. Herein lies the power of healthy foods, for now.”

Another potential marketing opportunity involves positioning healthy foods as a way to manage various health conditions, including high cholesterol, digestive issues, blood sugar issues, general allergies and diabetes, the study indicated.

“More than half of consumers are buying grocery items to address one or more specific health problems or concerns,” it noted. “While there have been many products developed to meet this growing ‘food-as-health-therapy’ movement, there may be quite a bit more yet to come, and there are important opportunities still to be tapped.

“For example, although 48% of respondents said one or more members of their household suffer from joint pain or injury, only 9.8% said they consume foods and beverages with joint-health properties; and while more than one-third of respondents said members of their household experience sleep disorders or insomnia, only 5.2% said they are purchasing products that may address this.

“With billions of dollars of new energy drinks surging in the marketplace, can new ‘relaxation’ beverages be far behind?”

Two more potential marketing opportunities for healthy foods involve private-label products and healthy prepared foods, the survey indicated.

“Many more consumers are interested in trying organics, even though they don't currently purchase them [because] they see price as the primary barrier,” it said.

“Private label is a good solution.

“Consumers are eating out less but still looking for convenience from their healthy foods. Retailers can establish a winning healthy prepared foods program but must pay attention to merchandising and branding that is consistent with quality and health.”

According to the study, local foods are a potential marketing opportunity for the industry. When consumers were asked what products they wish they could purchase at their primary grocery store, 33.4% named “local foods” — foods produced within 100 miles of where they live.

The study also said 66.6% of consumers said they were likely to switch stores if another market offered a better selection of local products.

The study defined “healthy foods” as a combination of functional foods (those that address specific needs); lesser-evil foods (those that minimize or eliminate a single ingredient); and organic and natural foods (those without artificial ingredients).

It said 38.5% of respondents go to conventional grocery stores to buy healthy foods, while 24.1% seek them out at mass merchandisers and 10.1% at club stores.

According to the survey, the two groups that lead the way in healthy food purchases are “early adopters” and “heavy users.”

Early adopters, who accounted for slightly more than 10% of respondents, tend to be slightly better educated and slightly younger than the mean; are more likely to be single; and tend to actively seek out information, the survey explained, while heavy users — who made up 17% of households surveyed but accounted for 48% of healthy food spending — are more likely to be female, with higher incomes and educations than the mean and more likely to be married with children.

Asians and Hispanics skew higher toward heavy spending on healthy foods, the survey pointed out.

Asians and Hispanics skew higher toward heavy spending on healthy foods, the survey pointed out.

Favored Attributes
Percent of consumers who rated these product attributes as “very” or “extremely” important.

Areas of Concern
Percent of consumers who are “very” or “extremely” concerned about these product attributes.

Negative Ingredients
Ingredients or attributes consumers reported avoiding in the past month.

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