Better-for-You CPG Products Spawn Growth in Recessionary Times

Better-for-You CPG Products Spawn Growth in Recessionary Times

Due to first tenuous, then recessionary, economic conditions, consumers have been forced to evolve. For packaged goods marketers, perhaps the most salient changes observed are derived from consumers’ seemingly ubiquitous decision to save money through increased self-reliance.

Home-based beauty rituals, such as facials and hair coloring, have increased, and salon visits have declined. Consumers are making a concerted effort to save on healthcare expenditures by treating simple ailments at home. Nutrition has become a cornerstone of consumers’ wellness strategies. In fact, new research from Information Resources Inc. reveals that 83% of consumers are eating for nutrition, and two-thirds are eating to manage special conditions, such as high cholesterol, osteoporosis and obesity.

This is a time of great opportunity for CPG marketers, and the industry is rising to the occasion. Unilever is just one example of a major packaged goods manufacturer to qualify for the Smart Choices Program designation. This program, started by a coalition of dietary experts, provides quick and easy front-of-package nutrition guidance across 19 categories, including beverages, cereals, meats, dairy and snacks. To promote its program participation, Unilever has launched “Become Label Conscious,” a new healthy-eating initiative, across traditional and online media and supported by an educational component created in collaboration with WebMD.

Safeway is an example of retailer efforts to bolster America’s healthy living aspirations. The retailer boasts two private label brands, O Organics and Eating Right, which jointly offer more than 500 better-for-you product options across CPG departments. Similarly, Kroger’s Fred Meyer stores have established the Natural Choices department, which typically includes a full array of dry shelving, refrigerated and frozen cases, and HBC offerings.

Despite recessionary economic conditions, programs such as these are making healthy eating easy, accessible and affordable. As innovation around wellness-related attributes continues and consumers’ quest for healthier food option grows, these products will to capture increased share of wallet.

Reported in IRI’s latest issue of Times & Trends, “Health & Wellness: Redefining Healthy Living,” key wellness attributes are gaining traction. For example, products with “all natural” claims now account for 12% of edibles spending across grocery, drug, mass merchandise and convenience channels. And, while total CPG unit sales growth has been in negative territory over the past year, foods touting all natural claims have climbed one percentage point. Already, better-for-you food and beverages are fairly well-entrenched across consumer segments. Nonetheless, significant upward potential remains.

To maximize this potential, CPG marketers must proceed cautiously, yet aggressively, and understand that shopping strategies have changed. Consumers are approaching shopping in a very deliberate manner and are carefully planning what they buy, where they buy, and when they buy. An astounding 83% of consumers are making their CPG purchase decisions in the home.

Though recent signs indicate that the recession is easing, consumers are not yet ready to loosen their financial belts. High levels of at-home decision making will persist in the coming year. Marketing and merchandising strategies must be rewired to begin to impact the shopper in the home. Certainly, effective strategies will span a number of existing and evolving marketing tools. The Internet will be an important quiver in CPG marketers’ ever-changing arsenal.

The Internet already plays an important and increasing role self-care health care. Today, about one-quarter of consumers leverage the Internet for basic health care information, including diagnosis and treatment options. And, 12% of consumers leverage information from Web sites and e-mails to make CPG health care brand decisions. Heavy spenders on CPG health care are nearly 20% more likely to reference Web sites and emails in making their brand decisions.

To resonate clearly, it is critical that message be spot on. Certainly, the recession has impacted different regions of the country in different ways. Financial stressors, and reaction to those stressors, vary across consumer segments, too. To ensure relevance among health-conscious yet financially weary shoppers, marketing and merchandising strategies must reflect genuine understanding of consumers’ needs, wants and concerns.

The world of CPG marketing is changing quickly. As the economy continues to evolve, so too will CPG-related attitudes and behaviors. Today’s value and health-oriented environment provides opportunity for marketers to really connect with shoppers. Those forging solid relationships today will reap rewards long after the recession ends.

For more on current and emerging marketing strategies being employed by an industry seeking to accelerate consumer migration toward healthier living, and benefit from increased brand, category and store sales along the way, read IRI’s November 2009 issue of Times & Trends, Health & Wellness: Redefining Healthy Living.

For more great insights into critical trends impacting the CPG industry, be sure to check out IRI’s CPG Blog.

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