By Bethan Hockey, research director at The Growth D_Stillery
The food industry is experiencing a shifting landscape, driven by changing consumer behaviours and economic factors. The cost of living continues to rise and consumers are re-evaluating their consumption behaviours, the contents of their grocery baskets and their priorities. As consumers weigh up the value of their food purchases, brands need to find ways to safeguard their premium and protect their brand value.
The New Value Equation
The pandemic accelerated the desire for premium food experiences. Lockdowns and restrictions meant more time at home, elevating food to a more central role in daily life. Food offered a way to bring the home together and provide a sense of novelty and enjoyment. Today, cost of living has dealt a blow to household budgets, with two thirds of household grocery budgets being negatively impacted. This is forcing Aussies to reassess their food spending and redefine the value of what they deem to be their premium.
This re-evaluation brings both challenge and opportunity for food brands. Our recent research revealed that consumers are more focused on bargain hunting than brand loyalty when they are food shopping, with less than half of consumers (46%) saying they are loyal to the brands they already shop with. Despite this increased focus on price, Aussies are still willing to spend on their own personal premiums, and are finding ways to protect what they value most when it comes to food. Our recent Food D_Stilled report identified five core dimensions of consumer premium (health, exploration, socialisation, taste and convenience). These dimensions present opportunities for brands to stay competitive, demonstrate their relevance to target audience and ultimately avoid having to compete on price.
Positioning for Success: Leveraging Existing Strengths
As consumers are carefully weighing their options and making deliberate trade-offs, emphasising the unique value of your brand becomes paramount. In order to protect their premium, brands must first look to harness their existing strengths. Take a closer look at your brand’s unique value proposition, the functional and emotional benefits at your brand’s core, and where they intersect with these dimensions of premium. By aligning offerings with the dimensions that resonate most with target audiences, brands can create a strong emotional connection and meet consumers’ evolving needs. Highlighting the qualities that make your brand special, whether it’s nutrition, easy-to-prepare meal solutions or authentic cultural heritage, can signal relevance for key audiences.
For example, if your brand is renowned for its culinary craftsmanship or artisanal techniques, showcase the skill and attention to detail that goes into each product. Whether it’s handcrafted chocolates, artisanal bread, or small-batch sauces, emphasise the unique quality, flavours, textures, and complexity that set your brand apart. This can tap into the taste dimension of premium, appealing to those consumers who aren’t willing to compromise on quality ingredients and sensorial food experiences.
Leveraging the existing strengths of your brand and reinforcing the most relevant “premium” attributes can help brands to win the hearts, minds and stomachs of consumers, solidifying your place in consumers baskets.
Driving Innovation: Anticipating Consumer Desires
Companies that innovate during times of hardship often come out on top. Research from McKinsey & Co found that organisations that maintained their innovation focus through the 2009 financial crisis emerged stronger, outperforming the market average by more than 30%.
Innovation can play a pivotal role in how brands can protect their premium and stay ahead of the curve. Staying attuned to emerging and evolving consumer needs, anticipating their desires and providing new brand experiences can strengthen brand loyalty, attract new customers, and create differentiation in the market. Strive to be agile and adaptable, continuously seeking opportunities to enhance the premium experience and exceed customer expectations.
Convenience is a premium dimension highly valued by consumers and ripe for innovation, with two different elements available for brands.
• The first is Convenience 1.0: Ease and Speed. To tap into this aspect, consider developing innovative solutions that cater to time-strapped individuals. Meal prep solutions, such as pre-portioned ingredients or ready-to-cook meal kits, can offer convenience without compromising on quality or taste.
• The second is Convenience 2.0. This is about greater choice and flexibility without the effort. Here, think about innovations that offer customizable options, allowing consumers to personalise their meals or choose from a variety of flavours and ingredients to enhance the premium experience they desire.
Crafting Memorable Interactions
Finally, brands can further demonstrate their value to consumers and their personal premiums by enhancing the customer experience. Focus on creating memorable interactions that go beyond the product itself. Experiences that can create a sense of connection, delight, and differentiation, allow consumers to associate your brand with positive emotions and the premium experiences that they value most.
For consumers who prioritise the exploration dimension, giving them recommendations for pairing your products with complementary ingredients or suggest creative recipes and cooking techniques. Offer limited-edition or seasonal offerings to create a sense of exclusivity and excitement, enticing consumers to try something new and feed their curiosity.
Understanding the new value equation can help brands to navigate the evolving consumer landscape and unlock opportunity. By leveraging strengths, emphasising value, driving innovation, and creating memorable customer experiences, brands can safeguard their position.
The Food D_Stilled research provides further insights into the dimensions of premium that drive consumer food choices. By prioritising health, savouring taste, fostering socialisation, enhancing convenience, and nurturing exploration, you can meet consumer expectations and protect your brand premium.
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Top Image: Bethan Hockey