As the globalization of U.S. food culture advances, food industry manufacturers are eyeing aging brands with a common goal: invigorate sales in legacy brand portfolios with stagnant or declining sales.
To contemporize existing, often very old brands, brand managers today increasingly need to know what "quality" actually means in their brand’s category. At The Hartman Group, research reveals that virtually every major food category has undergone a shift in how consumers define quality within it, primarily due to the ongoing globalization of the U.S. food marketplace. Established habits and flavors linked to brands from the mid-20th century are being challenged and upended daily in restaurants and food retailers across the country.
Cultural maturity in a category is quite different from standard business notions of category maturity, which often center on degree of household penetration and/or sales growth at high volume. Culturally mature categories like bread and cheese are ones where demand already exists (and is growing) for higher quality experiences in the category and where food culture already has developed "rules of quality" that a company can’t simply ignore and succeed.
The Hartman Group’s Tinderbox group has developed a model for looking at food categories (see sidebar). Through the lens of this model, the group is able to find that culturally mature food categories may be identified by these criteria:
• Quality distinctions have been generated by experts/artisans in the category;
• Quality distinctions are broadcast actively by experienced consumers and category media players;
• And specialty retailers actively promote quality distinctions in the category.
The concept of cultural maturity allows marketers to understand exactly what they are up against when they take an old legacy food brand and try to contemporize it along notions of quality. For example, culturally immature categories are ones that don’t fully inhabit the three zones of quality and where a consumer packaged goods company must create demand. The upside of immature categories is the industry has the ability to define what "higher quality" means for consumers in the absence of intense engagement by the broader food culture. In other words, demand for immature categories is relatively low and there are little or no rules established by food culture.
Aside from the niche category of boutique chocolate sold through luxury retail establishments, it is only recently that chocolate has begun to evolve into premium categories for mass consumption.
Today, mirroring European tastes for high cacao, dark chocolate experiences, the greatest growth in the American chocolate market is in the premium segment, which is growing at double digits compared to barely perceptible increases in conventional categories. The chocolate marketplace now has distinct offerings in all three zones of quality, offering a rich world of burgeoning varietal distinctions for consumers to explore (e.g., varietals from Venezuela, Ghana, Madagascar, the Caribbean, and Indonesia).
Pioneers like Scharffen Berger and Joseph Schmidt drove the maturation of the category and in the process were acquired by The Hershey Co. Brands like these created the pathway for chocolate oriented to foodies to continually push out into the mainstream.
In a mature category like chocolate, the producers oriented to savoring and "intellectual eating" saves larger companies the effort of developing quality distinctions themselves. The challenge for big brands oriented to instrumental eating is in taking advantage of emerging quality distinctions before face-off competitors do and scaling them up through their own brands. Those who are first to drive trends out into the marketplace will win higher price points and sustainable growth.
The core innovation challenge in mature categories is how to scale emerging quality distinctions and still keep profit margins healthy.
Laurie Demeritt is president and chief operating officer of The Hartman Group, Inc., a consulting and consumer insights firm. She may be reached at FBNEditor@sosland.com.
Defining the zones of quality
Immersion in food culture has revealed consumers appreciate three zones of quality in what is known as the broader culture of food:
• Instrumental eating is when enjoyment originates from the social context of eating rather than the food itself and where quality distinctions external to food categories drive quality perceptions (e.g., nutrition).
• Savoring is when quality distinctions internal to the category (e.g., fresh) really matter and when enjoyment derives from comparing food experiences within a category.
• Intellectual eating is when nuanced quality criteria related to how food is produced dominate (e.g., local, artisanal) and when enjoyment originates from creating or discovering new quality distinctions.
Source: Tinberbox, a part of The Hartman Group
This article can also be found in the digital edition of Food Business News, July 8, 2008, starting on Page 52. Click