Another near-certainty for 2013 is that the impact of higher food prices will be felt by consumers around the globe. Just in time for the New Year, a US Department of Agriculture (USDA) economist predicted that prices in the US would rise 3-4% during the year, partly due to the drought affecting two-thirds of the nation. In this context, it’s critical for marketers to understand the potential implications down the road assuming the situation doesn’t improve. Consumers who have already cut back on food spending may offer clues.
According to research from the Roper Reports Worldwide study from GfK Consumer Trends, consumers who have cut back on food spending in general are not a huge group (17% globally), but they are important in that they represent the vanguard of consumers hit hardest by rising food prices and offer indications of what the future could hold for the broader consumer market. One or more of the three tacks outlined below could help marketers through these tough times.
Do what it takes to stay on the list
The longer prices stay high, the greater the risk that people will decide they can live without certain items indefinitely. Brands that want to stay on consumers’ routine shopping lists may opt to pull out the stops in terms of price-cutting strategies.
Address cost issues indirectly
Name brands typically can’t compete on price, but those that can streamline their offerings in other ways – by reducing packaging, for example, or advertising in less costly ways and promoting the fact – might be able to offer some cost savings even as they appeal to consumers’ desire for thrift and simplicity.
Even among those who have not cut back, food is among consumers’ key interests and their number-one recommended category. Marketers can leverage this common ground by inviting ‘foodies’ to share the love with others, including tips on saving money without sacrificing the joy.
GfK Consumer Trends is closely following the impact on rising food prices on consumers globally, including one of a battery of food attitude statements in our 2013 questionnaire, the results of which will be available later in the year. For further details, please get in touch.
By David Crosbie, GfK Consumer Trends