Wednesday, June 24, 2009

Supporting Sustainable CPG



A few weeks back, the Food Marketing Institute released findings about changes in consumer shopping patterns. While the main thrust of the study was a breakdown of the stages that shoppers go through when coping with the widening reach of the recession, it might be equally interesting to focus on what has remained consistent --and its implications for retail organization and marketing.

According to FMI's study, shoppers are still highly concerned with finding more nutrition and health information, in-store pharmacists to provide health advice, easy-to-make recipes, ideas for cooking a meal for $10 or less, and convenient placement in the store for dinner items such as pasta, sauce, bread, meat and salad. Sustainability is also still a strong consideration. According to the report:
Food shoppers continue to show strong support for locally grown products, with 72% of shoppers saying they purchase locally grown products on a regular basis, driven by a desire for freshness (82%), the desire to support the local economy, (75%) and taste (58 %).

Someone must be getting it right because CPG was one of the few growth areas in the last six months. Support of core brands has been one key strategy. For example, ConAgra has increased its advertising spend to support the Healthy Choice brand, relaunched and designed to leverage consumers' increasing desire for healthier, easy-to-prepare foods. While marketing has been one key factor in this, some research is suggesting that CPG growth is also related to a shift in the way the company -- and its employees -- interacts with customers and its retail clients. One argument is that its front-of-the-house sales force has to be more diverse with skills related to customer service, strategic merchandising insights, and traditional sales approaches:

The relationship between retailers and consumer packaged goods (CPG) companies has significantly changed and CPG companies need to broaden the skills of their sales forces to meet retailer expectations, according to a new study released today by the Grocery Manufacturers Association (GMA).

Critical is finding ways to incorporate those consumer concerns directly into the basic approach of any CPG company. So how do large wholesalers with an emphasis on prepared foods take advantage of the consumer's desire for the local and the sustainable?

Large companies can no longer put all their emphasis on creating standardized brands that don't adapt to site-specific market needs. Some examples include working with more localized networks of suppliers, engaging in community programs (giving back to the Little League, for example, but more pointed demonstrating visible support of local businesses, making visible recycling programs, and advertising research and development related to food safety), and allowing the hometown producer a visible space on your retail shelf. Companies can take advantage of new country-of-origin-labeling (COOL) requirements by putting the local items up front and center in the retail display. Consider something as simple as soliciting local chefs and cooks to come in and demonstrate their recipes, first in person and then in an ongoing DOOH video display, timed to coincide with sales on the necessary ingredients (dry pasta and local fresh basil, anyone?). Blogs and newspaper columns that feature cooking like a chef -- but fast -- in local papers like the San Diego Reader go a long way towards helping consumers navigate both their needs and sustainable options.

However, despite FMI's interesting data, there's one key caveat with diversifying into more localized strategies: you need to understand the particular shoppers in your locale. Both category-focused and shopper-centric data are necessary and surveys are only the tip of the iceberg in demonstrating what's possible. As one industry insider put it, "it's hard to act locally against national research and insights." Qualitative data -- inexpensive, but underutilized -- remains the key.

1 comment:

Beverly Sturtevant said...

HI Annie - several great articles here. Who would I need to talk to about getting permission to reprint something in a non-profit trade association e-newsletter (with attribution and a link to your website, of course).

Thanks,
Beverly S
bjsturtevant@aol.com