The Slow Down
Brand Push Alarm
Is pasta that requires boiling water convenient enough
for today's consumers? Boiling pasta is the ONLY cooking that some thirty-something's
do and the kind of "scratch" cooking that many twenty-something's
only do for special guests - and even then only at times when a romantic
interest is involved. Kraft's Easy Mac, Pasta Anytime!, and now Ragu
Express are among the products responding to these expectations. These
micro-ready mini-meals are just that - ready to zap without pot, water
or colander. They are almost as ready to eat as Oscar Mayer's Lunchables
or a bag of Fritos.
of tuna is another example of less work formulations - in this case
the work reduction and time saving based on not having to open or drain
a can. The Star-Kist pouch confused lots of shoppers by failing to explain
its label claim that the tuna packed in oil or water didn't have to
be drained. ("Huh?") In spite of confusion, a higher unit
price, and failing to provide reseals that many consumers would find
useful on the 7-ounce size -- the new package is reportedly doing well
- added testimony to the presence of convenience needs that are almost
If convenience is so desirable and compelling, why wasn't Boston Market
as successful as McDonald's? Why did Eatzi fizzle? Why are cooking shows
and Cable TV's Food Channel continuing to attract larger audiences?
Why haven't take-out foods and what supermarkets call Home Meal Replacement
taken over the supermarket instead of limping along with slow gains?
Among the answers
to those questions:
- No one in this
country has gotten take-out food right. No one has delivered yummy
foods that didn't get boring at attractive prices. Certainly no one
has set taste standards that held up over time like McDonald's Fries
or Burger King's Whopper or KFC's Chicken.
- No one has developed
take-out foods with a brand name that consumers associate with "yumminess."
- Food consumption
patterns change faster than generations succeed each other but slower
than pundits and researches expect and report.
- Contrary to the
truth of our experience, the government swears that food is not really
price elastic. Even though we believe that consumers load up on ice
cream and steak on sale and gorge on height-of-season corn, tomatoes,
peaches and cherries at bargain prices, in statistical terms we eat
pretty much the same amounts whether prices are high or low.
- Exotic names
create excitement. Brits buy take-out food from Prêt a Manger
shops that seem to be everywhere. The French shop at Le Drugstore
and eat in and take out from Quick in Paris and the countryside.
Mexicans seems to be laughing at us or at themselves by welcoming
Taco Bell to the home of real tacos. Now we learn that McDonald's
has bought into the British owned, French named Prêt a Manger!
The selling power
of foreign food names here in the U.S. is best illustrated by the sizes
of coffee initiated at Starbucks (Small, Grande, and Venté) and
now used by many of its copycat competitors as well. Isn't having a
Grande grander than having a medium or even a large? And even a Venté,
which is mysterious but somehow even larger and grander than Grande!
That takes us back to Prêt a Manger. It's not only French but
also a take-off on French Fashion's Prêt a Porter or ready-to-wear
industry. Somehow, both Prêts sound much more chic than Ready
to Eat or Ready to Wear. And a LOT more appealing than Home Meal Replacement
or the English Take-Away which always sounds a bit like steam table
MORE PURCHASE DECISIONS
Is the demand for convenience going to slow down with the economy? The
answer depends on how much of a slow down we experience. Many consumers
do sacrifice work and time saving when they themselves are out of work
or worried a lot about making ends meet. But convenience has become
so important in so many categories that consumers are likely to continue
to want and feel they need almost all of the conveniences they have
gotten used to. Here are the top ten convenience-driver categories among
Driving Purchase Decisions
1) Laundry products
2) Cleaning products
3) Medical services
4) Lunch food
5) Breakfast food
6) Dinner food
7) Lawn/garden care
8) Home furnishings
9) Lawn/garden care
10) Cleaning services
Topping the list,
laundry detergents have gone from large to condensed boxes of powder
to tablets, which failed, then to liquids, and most recently to tablets
again with more success. Where measuring out the detergent became too
time consuming, measuring cups were put into the package. When liquids
were introduced, the cap became the measure. Then the need to measure
was eliminated with pre-measured tablets which are gaining market-share
for both dishwasher as well as clothes washer applications. Consumers
will have drug-style cases of "tablet" confusion if the dish
and clothing brands fail to stay on their own turf. Some multi-tasking
consumers are almost sure to drop Wisk tablets into the Kitchen Aid,
turning their kitchen into a bubble-filled Nick at Nite rerun of anything
from I Love Lucy to The Three Stooges.
In cleaning products,
the widely perceived need for more convenience and time saving explains
the continued popularity of pumps and sprays and triggers and the minor
roles played by money-saving refills because of the time they take to
fill. It's faster and easier to spray!
The fact that laundry
and cleaning products still score even higher than medical services
on the needs for convenience and time saving reflects the time that
both of these chores continue to take. The robot that puts away the
clothes and/or the dishes is what is really needed to save time - and
that may still take a few years.
In the mean time, there is room for yet more convenience and time
saving in food shopping and preparation - especially for breakfast but
also for lunch and dinner. Snacks have come closer to satisfying consumers'
total convenience needs than meal foods, and convenience stores have
been doing a better job of responding to this need than supermarkets.
Anyone who doubts
that faster and easier is better and more compelling should consider
the growth of Lunchables and its competitors. These products are ready
to eat whenever the consumer is ready to eat them. Even the seconds
it might take to warm things up have been eliminated!
Consumers who are
at the leading edge of the push for greater convenience are exploring
and using Internet services and delivery whenever they are available.
Some are complaining about the mega stores and "the time and
energy it takes to search through numbers departments to find the food
I want. I want smaller, friendlier stores where you can find things
quickly and establish owner-customer or manager-customer relationships
over a period of time."
is one of the most visible forms of convenience-driven changes. Beverages
that aren't car-friendly are no more acceptable than cars that aren't
beverage friendly. As if to put a double explanation point on the whole
phenomenon and make sure that we get it, the new Toyota Sequoia has
more cup-holders than seats!!.
THE SLOW DOWN
Almost two thirds of the shoppers we polled for this issue say the economy
slowdown is very real or somewhat real for them. One third say they
don't see or feel it. Of those who are experiencing it, some talk of
buying more store brands and fewer national brands as one of their responses
to the slowdown. But the most frequent response to our question suggests
that supermarkets and clubs might take back a few points from restaurants
during this downturn. The question we asked was "ARE YOU CUTTING
BACK ON ANYTHING OR BUYING ANYTHING DIFFERENTLY BECAUSE OF THE ECONOMY?"
"Eating out less" was the most frequent response but we also
heard a good bit about (in frequency order):
- Trying to use
less gas, oil, electric
- Turning down
- Buying less gourmet
and luxury items
- Trying more store
brands and generics
- Cutting back
One consumer told
us that she had started baking bread again. But aside from that one
comment, giving up convenience products was not what consumers were
thinking about doing.
STORE BRAND PUSH ALARM
More retailers are using anti-theft programs that trigger alarms
when consumers cross a threshold line without paying for the merchandise.
In a parallel universe, retailers could/would give their consumers whistles
to blow or buttons to push when they feel pushed to buy store brands
to an irritating degree.
Knowing that store
brands traditionally rise as the economy falls, more U.S. retailers
than ever are pushing their store brands these days. And the temptation
to push consumers gets stronger as traditional retailers face with tougher
than ever competition from each other as well as from other formats,
monoliths and e-tailers.
Consumer feedback tells us that showcasing signature store brand items
and special store brand deals is a win-win strategy. It also tells us
that pushing store brands throughout the store is a strategy which can
lose customers faster than it builds profits. The downsides of pushing
store brands are multiple:
- Some consumers
really don't like store brands.
- Many consumers
don't like to be pushed.
- Consumers who
are open to store brands like having the choice. They like feeling
that they've made a smart choice.
- Not all store
brand items are as good as the retailers who distribute them would
like them to be.
- Paying more for
something consumers like makes sense.
Cab drivers can
be good sources of regional consumer perceptions, and a February trip
to Louisville, Kentucky paired me with a driver who loved to talk. He
give me a welcome-to-Louisville rundown on area supermarkets which included
his belief that Kroger was the dominant store and generally good but
nowadays "messing up" on their stocking. Messing up, he explained,
meant not giving customers what they wanted. His main example was keeping
the store brand vending units in-stock at all times while leaving the
Coke, Pepsi, and RK machines routinely empty.
A few days later,
a different cabdriver took me to two Kroger's en route to the airport.
I found the first cab drivers report accurately reflected in the vending
machines at these stores and asked the second driver what he thought
about the vending machines. He was quick to reply "They only
want to sell their K brand so they don't fill the other machines."
Two stores and two
cabbies aren't much of a sample, but they underscore consumer grumbles
along these lines that we've been hearing for months - even before a
slowing economy signaled many retailers to "Sell the store brands!"
As competition in
the retail marketplace gets tougher and more brutal, retailers are pushing
store brands for more reasons, some of which are emotional ("We'll
show 'em!") while others are economically rational ("We'll
find some way to make money!") The emotional response is easy to
understand in this frustrating era of Wal-Mart dominance. Both big and
small retailers feel betrayed by the brands that they helped to establish
through decades of distribution. Feeling betrayed, they can de-list
the brand altogether or give it short shrift wherever they can - outside
the store if not inside.
Pushing store brands
against consumer preferences involves significant risk. Brand preferences
can be casual or significant, and when they are significant, consumers
who feel pushed toward store brands in one store may also feel encouraged
to shop elsewhere. Retailers who offer store brands that they know
are equal to national may be frustrated by seeing their consumers persist
in choosing the higher price brands. An economist talking to the New
York Times about why people continue to eat burgers when they know they
are unhealthy said that: "If people accustom their taste so that
they enjoy hamburgers, then trading health for taste is a rational preference."
If that economist is right, then spending more for what consumers like
makes perfect sense and is nearly impossible to fight. We suspect that
retailers who sell what they want to sell instead of what consumers
want to buy can win only if no one is offering what consumers want.
Stores do put their
name on the line with store brands, and mediocre products cast a shadow
on trusted names. One consumer writes: "When Wegman's put their
name on a product, we knew we would like it. Now we don't think that
is true. We don't care for their sausage, poultry, frozen vegetables,
and frozen prepared foods."
THE BIG PICTURE FOR CONSUMERS
The giant soft drink brands are losing their share of liquid consumption
in this country, but they are still very important to many consumers.
The emotional importance
of Coke and Pepsi made the failure of New Coke a media story that rivaled
OJ and Monica. The long-standing share wars between Coke and Pepsi don't
have a Super Glass equivalent of the Super Bowl but they probably could
have. Consider the icon ads and jingles, the variety of optional ingredients,
the variety of package styles and size choices to fit a growing variety
of lifestyles and use occasions. If that's not enough, consider the
life-changing success of Diet Coke which promised consumers calorie-free
pleasure. Coke's sales may be flat enough to explain a new joint venture
company with P&G but here is the way some consumers still feel about
some of the branded soft drinks:
- I won't live
- Pepsi is the
only soft drink I use.
- My husband
will drink nothing but Diet Coke.
- Diet Pepsi
is my elixir of life.
- There is no
substitute for Coke, there is no other cola.
- Diet Pepsi
is the best! Makes me smile.
Big soft drink
brands have big! brand power - big enough to foil retailers who want
to switch their customers to store brands that work on taste tests and
offer better returns on investment. And it isn't only soft drinks. Most
strong brands have strong relationships with some of their consumers.
Take a look at what how some consumers feel about their preferred brand
- I almost always
buy Townhouse because their crispiness and flavor are important to
- Without my
mainstay of Premium and peanut butter, I would have to do without
eating at times.
are our favorite: salty, crunchy, love them.
- Keebler crackers
are tasty and make me happy.
brand comments above with this store brand comment below:
- I usually
buy store brand crackers because they are cheaper and just as good.
There is a lot of
power and equity in those brand preferences. And if the power of the
big national brands isn't enough to made trouble, Wal-Mart's own store
brands are seen as better and/or cheaper than other retail brands by
some consumers. Here's a comment from one of our Indiana panelists that's
sure to make some of our supermarket readers reach for a Prilosec or
a soon to be available generic equivalent:
"Wal-Mart store brands beat Meijer and Marsh. Kroger store brands
are about equal to Wal-Mart but Wal-Mart's soda is better than Coke
We've done our share of national versus store brand research over the
last ten years, and we've seen store brand acceptance grow significantly
in many categories. In many categories, we've seen store brands deliver
more quality, taste and performance with the help of better packaging
and in some cases better labeling as well. We've also seen more consumers
become more sophisticated and independent - more able to separate their
decisions from brand messages and make decisions that they think are
Many more consumers
are buying store brands that they find fully comparable to nationals
and making buying decisions on the "Why pay the higher price
if you can't tell the difference?" basis. But even these consumers
are paying more for branded items they prefer, and retailers who try
to push consumers away from their own pursuits of pleasure are swimming
against the tide, even if the long-term growth of store brands seems
to be moving in the retailers' direction.
FOODIES AND NOW FOODINGS
Noble's Food Channel reports seeing a significant growth of Foodies.
(We think of Foodies as folks who expend significant energy in the pursuit
and enjoyment of really delicious food). The New York Times reports
on a new French fad called "Le Fooding," an exciting new way
of looking at food that focuses on the experience and enjoyment - and
makes the gourmet quality of the food itself secondary. If it's fun
and pleasurable, it's great Fooding, whether it's happening at a fine
dining restaurant in Paris or, just imagine, a Great Tastings section
of your neighborhood supermarket.
Right now, Le Fooding
itself is happening in Paris, the home of haute cuisine and fine dining.
Le Fooding means a wonderful food experience that happens anywhere and
for any reason. So if the food is so-so but the people who serve
it or the dancing on the tables that follows it is wonderful, it could
Le Fooding par excellence!