Research conducted by firm since the pandemic was declared in March reveals a growing “sense of consumers wanting to be more resilient,” Laurie Demeritt, CEO of The Hartman Group, told attendees during a recent webinar hosted by the Specialty Foods Association.
“They don’t always use that word, per se, but it is that sense that in times of pandemic, we need to take extra action to protect our health and the health of our families. So, being resilient against disease, being resilient so we can stay mentally strong, being resilient so we don’t let stress get the best of us. This whole idea of personal empowerment and of consumers wanting to take more control of their health,” she explained.
“Functionality is the sweet spot for them where they can feel more empowered, they can take action through what they consume,” she added.
As such, she said, 87% of US adults now use supplements or functional foods and beverages for various health benefits – a trend that has increased since the pandemic began, but which also was well founded before the outbreak as illustrated by a 5.3% increase to $71.4b in retail sales of functional foods and beverages in 2019 over 2018.
‘We have to be empathetic’ to earn consumer trust
While the current environment is fueling consumer interest in functional foods and beverages, manufactures and brands hoping to meet this demand must do so by also balancing empathy for consumers’ whose lives and available resources have shifted dramatically since March.
“Given we might be going into a recessionary environment, given that routines and rituals have been changed dramatically in the past six months, we have to be empathetic to some of those things that are going on in consumers lives, as well as around resource constraints, including time, energy and money,” Demeritt explained.
She noted that even if individual consumers are not personally experiencing economic distress or job loss, they will likely “be a little more frugal … because there could be something down the road that impacts them.” As such, she said, consumers will place a greater emphasis on cost per unit or dose.
Align products with contemporary beliefs to increase value perception
To offset financial concerns, companies can effectively communicate value by aligning products with contemporary health and wellness beliefs, Demeritt said.
“The health platforms that are seeing the most resonance right now,” include immunity, cognitive health, emotional health and stress management, digestive health and rest or sleep aid, she said. While not as developed, other burgeoning areas to watch including inflammation and hormonal health.
Many of these areas were gaining traction before the coronavirus pandemic, but since the outbreak the intention behind some of them has shifted slightly, Demeritt said.
For example, energy, which 23% of consumers currently use functional foods to obtain and in which an additional 44% are interested, is less about running a marathon as it may have been before the outbreak and more about just getting through the day, next project or even dinner with family, she said. To that end, she added, emotional health and energy “are sort of co-mingling in consumers’ minds.”
In addition, functional products must be fresh, natural, free from artificial ingredients and preservatives, sustainable and have a narrative around from where a product and its makers hail, which Demeritt said “are not attributes that consumers are willing to give up for functionality. Rather, they want them in conjunction with functionality.”
Not all platforms are ideal for functional benefits
Just as important as the functional benefit, is the delivery platform – with consumers gravitating to certain categories more than others, according to research by The Hartman Group.
The top five food categories that consumers are interested in for functional benefits including yogurt, granola and energy bars, cereals, grains and breads, according to Demeritt. She added juice, tea, bottled water, smoothies and milk alternatives top the list for functional beverage categories.
Across both food and beverage, consumers currently are not looking for functional benefits from products that they view as more indulgent, including dessert, candy or alcohol, Demeritt said.
After the threat of COVID-19 passes
While the surge in consumer interest in these functional benefits and categories easily can be traced back to the declaration of the pandemic, Demeritt stressed that they also represent trends that already were on an upward trajectory and therefore likely will sustain even after the outbreak is resolved.
Research conducted by The Hartman Group revealed that 19% of consumers plan to continue to consume more functional foods after the threat of COVID-19 passes, and 16% plan to keep drinking more functional beverages. More broadly speaking, 27% report wanting to improve their diet long-term and 33% want to take better care of their health – representing a broad range of product potential.