Innovation needed to help adapt to new economic climate
Tough financial times have led to families eating more home-cooked meals made using more convenience-style foods, said Thom Blischok, president, Consulting and Innovation at Information Resources, Inc (IRI).
It has also led to increased spending on “home luxuries” such as wine as consumers try to re-create the restaurant dining experience.
However, Blischok said: “This new found interest in dining at home is not a panacea for grocery manufacturers. As a result of economic pressures, recent IRI research has found that many consumers are having difficulty affording their groceries.”
Rising food prices are helping to transform how Americans shop, according to Blischok, who added: “Gone are the days when manufacturers can simply create infinite line extensions that protect existing market share and result in perhaps 1-2 percentage point market share increases.
“Manufacturers must innovate like never before, creating new products, new packaging, rethinking portions and developing other strategies to build and maintain shopper loyalty in these trying times.”
IRI research shows that 55 percent of shoppers surveyed said they have scaled back their purchases of higher-priced ultra-convenient meals, such as frozen pizza, shelf-stable dinners and refrigerated prepared lunches.
In turn, 53 percent are cooking from scratch and/or buying more convenience-style foods such as frozen vegetables, frozen prepared poultry and refrigerated side dishes.
Blischok said dining-room culture trend is an opportunity for innovative CPG manufacturers to create a “lasting bond with the large number of shoppers finding it increasingly difficult to put nutritious meals on the table”.
For example, innovative manufacturers are offering recipes with, for example, cheaper meat cuts to aid shoppers in preserving the look and taste of an expensive meal but with less expensive ingredients.
The benefits of earning customer loyalty include the ability to charge higher prices as consumers’ incomes improve.
