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Premium consumers still drawn to natural, organic foods

By staff reporter , 15-Jul-2009

Wealthy consumers who have taken a hit in the recession are more likely to buy natural, organic and ethical foods than those who have been unaffected, claims a new report on psychographic responses to financial setback.

Changing financial circumstances tend to cause consumers to reassess their spending, and those whose budgets have shrunk are often perceived to trade down to cheaper or better value food products.

 

But according to the latest report from Packaged Facts, this does not hold true for upscale-to-affluent consumers earning more than $75000 a year as individuals ($100000 households). When struck by financial mishap these people are more likely to buy foods that cost a premium – such as natural and organic – and be sensitised to ethical issues, according to the market researcher.

 

Such behaviour is akin to that of well-off consumers whose financial star is rising. Moreover, both those whose situation has recently improved or worsened were seen to have more awareness of health and nutrition – and to be more adventurous in their choices.

 

Product design

 

Such a conclusion is significant because it indicates that the natural, organic and ethical trends may withstand the recession despite costing consumers more. This means that product development need not be all about value and low cost; premium eating has become not only a matter of habit, but also a die-hard principle for many.

 

Across the Atlantic in the UK, retailer Tesco reported this week that it has introduced new deals on its premium product ranges, and subsequently managed to tip them back into growth.

 

In the US, consumers look to be switching the very locations where they shop. Premium shoppers remain vastly less likely to shop at Walmart, but “they are shifting to Walmart at above average numbers”.

 

According to the report, almost of fifth of upscale-to-affluent consumers described themselves as being “significantly” worse off in Q1 2009 compared to the same period a year ago. Nearly a fourth said they were “somewhat” worse off.

 

“The economic turmoil that reached crisis level in fall 2008 has been a bull in the china shop of American consumer behavior, even for a market as fundamental as food,” says David Sprinkle, author of the report, entitled Premium Consumers in the New Economy:

Food and Foodservice.

 

“Consumers who have been set back or thrust forward financially are more likely to be rethinking what they need, what they want, and how and where best to find it.”

Methodology

Sprinkle based the report on original research and analysis of premium consumer trends, demographics and psychographics data drawn from Experian Simmons winter 2008/9 National Consumer Survey.

 

The survey took place between July 2008 and late March 2009, and took responses from 13,128 adult respondents.

 

The report also draws on consumer market studies from Packaged Facts, and data from government, business and trade sources.

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