Innova: Consumers redefine value by seeking brands that 'listen, understand, and respond to their core values'
The current inflationary environment driving the price of everyday purchases up combined with shoppers' commitment to their personal well-being and support for the environment has created increased pressure on brands and manufacturers to deliver value while meeting wider consumer expectations.
"Redefining value throughout the food and beverage industry will lead in 2023 as consumers seek brands that listen, understand and respond to their core values. They want brands that provide quality, trust, and confidence via their product formulations, communications, and wider sustainability actions," said Lu Ann Williams, global insights director at Innova Market Insights, in a press release.
"We have seen considerable consumer demand for value redefined throughout the supply chain, with creative and flexible approaches to the use of technology and reducing waste proving pivotal. With financial concerns a dominating factor, 2023 is a significant year for new developments that answer these growing demands."
According to Innova's consumer survey data, in addition to heightened demand for competitive pricing, consumers are still seeking nutritional value and expect a continued shared responsibility for environmental security.
So how can brands respond to consumers' new sense of value?
Strategies such as price increases and flexible ingredient lists to cope with supply chain fluctuations and increased material costs may work in the short term, but in the long term, brands must stay open in their communications and clearly communicate the benefits they're delivering to consumers.
"Despite political and economic volatility becoming the second biggest concern for consumers in 2022, the health of the planet remains the top global issue and financial pressures are leading to an increase in eco-friendly behaviors," noted Innova.
Innova found that consumers are reducing food waste and upcycling or recycling more products as part of their budget belt-tightening.
"As the cost-of-living crisis continues, brands can achieve success through actions that combine economic benefits with clear health and sustainability goals," said Innova.
Over the past 12 months, 62% of consumers have reported a noticeable rise in the cost of their food and beverage purchases. As a result, they are turning their attention to simple but nutritious goods that are affordable, according to Innova.
Key behavior shifts include buying more in bulk, opting for private label over name brands, cooking from scratch, and reducing their spending on luxury items, and purchasing fewer items in general.
Concurrently, consumers aren't sacrificing on nutrition and are looking for ways to save while maintaining their personal health and well-being.
"To meet the nutritional, environmental and economic demands of consumers, manufacturers must innovate to extract maximum value from raw materials and the production process," notes Innova.
Plant-based, a new narrative?
While the plant-based sector has hit some roadblocks, the category as a whole still has a role to play in consumers' day-to-day food and beverage purchases but it must first create a new narrative around high-quality and flavorful products, argues Innova.
According to its research, two-thirds of consumers expressed a desire to try plant-based versions of traditional, local cuisines.
"No longer merely a mimic, green gastronomy will blossom as a standalone sector in 2023, giving brands significant opportunities to diversify and expand. Consumers still want to see improvements in taste and texture, but there is a huge appetite for culinary creativity and worldwide flavor profiles," said Innova.
"The industry is responding with a large increase in ready-meal offerings, while there is great scope for expansion into meal kits and inventive recipe combinations. Interest in underused ingredients is also growing, creating opportunities to introduce variation in flavor and nutrition while simultaneously addressing supply concerns."
Redefined supply chains
No longer fringe markets, indoor farming and regenerative agriculture are creating added value for consumers by maximizing flavor, nutrition, and yield. In the case of indoor farming, produce can be grown year-round and provide a longer shelf life due to the shorter distances travel to the end consumer.
"Today's consumer is increasingly invested in the source of food as it ties in with major global concerns of health, sustainability and waste. Brands need to demonstrate how novel production techniques are benefiting farmers, people and the planet," noted Innova.