Swinging back to the center

by Keith Nunes
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Mothers with children under 18 are anxious about rising food prices and struggling to stay within a budget in the current economy, according to a report by NPD Group, Inc., Port Washington, N.Y. The group’s report, titled "What’s on the minds of moms and how they’re coping today," found having enough money to meet their family’s needs is the top concern among moms today and the majority of those surveyed aren’t optimistic about improvement in their situation, even in a year’s time.

"Even though moms are trying to save money on groceries, they still want meals that are easy and quick to prepare, and healthy, affordable options for themselves and their families," said Dori Hickey, product development director at NPD and author of the report.

NPD Group’s findings, and other efforts like it, have had an effect on product development trends and the types of initiatives product developers are undertaking.

"With the downturn in the economy we are seeing more people eating at home," said Lucinda Wisniewski, vice-president of innovation for The National Food Lab, Livermore, Calif., a third-party product development firm that focuses on the food and beverage industry. "At one time there was a real exodus from the center of the store with consumers looking for more fresh products on the perimeter. The pendulum has swung back to the center with meal kit products like Hamburger Helper becoming more popular."

Ms. Wisniewski said The National Food Lab has been involved with the product development of shelf-stable foods.

"I think there has been a rethinking of the issue around packaged foods," she said.

But the situation she described has changed. While consumers may be shifting their purchasing patterns back to the center of the supermarket, their product quality expectations are grounded in the types of products available on the perimeter and in restaurants.

"People have become more sophisticated with regards to flavor," she said. "The bar has been raised in terms of the quality consumers expect."

And the improvement in quality is showing up in supermarkets, Ms. Wisniewski said. As an example, she pointed to Unilever’s Bertolli brand Classic Meals that are sold in the frozen food aisle. The line features such flavors as chicken Florentine and farfalle, chicken alla vodka and farfalle and roasted chicken and linguine.

"As the quality bar has been raised we have had to integrate more culinary approaches into our product development work," she said. "Now, not only do we have to develop products that meet shelf-life and safety requirements, but also meet the raised expectations for quality and experience."

As the definition of cooking has evolved, with cooking from scratch fading and the assembly of meal kits becoming more the norm, Ms. Wisniewski said product developers are challenged to provide the freshness of meals prepared from scratch with the demand for convenience.

"The issue of convenience is not going away," she said. "There is a reason we are seeing more sophisticated meal kits being introduced."

Two examples she cited include Nestle’s Buitoni brand Riserva pastas and ConAgra Foods, Inc.’s new Healthy Choice Fresh Mixers, which are microwavable meals available in varieties such as sweet and sour chicken, sesame teriyaki chicken and southwestern style chicken.

"The idea is kind of counter-intuitive," Ms. Wisniewski said. "Consumers want the freshness and authenticity, but in a shelf-stable format that is not priced at a premium."

Inquiries to the National Food Lab lately have focused on extending the shelf life of fresh products, Ms. Wisniewski said. Options for such efforts include the use of modified atmosphere packaging as well as "light thermal processing that does enough to knock down enzymatic activity," she said.

The trend toward freshness also is extending into the health and wellness category, which, like convenience, is not going away, according to the vice-president of innovation.

"Health and wellness is still paramount, but it has changed," Ms. Wisniewski said. "Food processors are looking for short, clean ingredients lists that feature ingredients consumers know provide a health benefit. So it is less about fortifying a product with antioxidants, and (more about) including real fruit such as blueberries to boost the antioxidant level of a product."

Tony Keller, president of TandemRain Innovations, Inc., Vancouver, Wash., added, "Consumers want more from the food they consume," he said. "They want the truth about the functions in their food and they want an effective dosage of the benefits they are seeking. They want to see less salt, less sugars, more proteins, help with portion control and they want all of this for a fair, value-based price point.

"The recession has had a profound impact on exposing the consumer to the fact that national retailers can produce quality products at a fair price. Once national retailers embrace the notion of functional food innovation with exclusivity, they will be able to continually build brand loyalty with their customers through their private labels."

It is far from a surprise that shoppers of all demographics have shifted to value brands as a strategy to save money in the current recession. What is a surprise, according to the latest Information Resources, Inc. Times & Trends report, is many consumers also are increasing their purchasing of premium brands. The study, "The Value/Premium Dichotomy," reveals that value brands are growing rapidly in terms of dollars, while mid-tier brands lag. Premium brands also are picking up steam.

On a unit sales basis, value brands enjoyed more growth in 2009 than 2008, while premium brand sales shrank just over 1% and mid-tier brands shrank nearly 3%.

But, shoppers also are focused on premium brands, through what I.R.I. has called "sophisticated splurging." Shoppers are holding onto the premium brands they crave but are purchasing them at value stores. Premium brand purchases have grown the most at dollar stores, supercenters and Wal-Mart Stores, Inc., while shrinking at grocery, drug, mass merchandise and club stores.

Shoppers’ concerns about health and wellness also are driving the spike in premium brand sales. For example, while bottled water unit sales decreased 3% during the last year, premium bottled water unit sales jumped 11%, driven by innovations, such as Glaceau’s vitaminwater. Similarly, yogurt sales were essentially flat during the last year, while premium yogurt sales grew 34%.

With the premium concept in mind, Ms. Wisniewski said one potential market that intrigues her is food as a beauty aid.

"I do think the concept will find a home eventually," she said. "I see a lot of interest on the part of beauty companies and other companies asking us how they can bridge the gap between food consumption and beauty. It is an idea waiting for the right concept."

This article can also be found in the digital edition of Food Business News, June 9, 2009, starting on Page 26. Click here to search that archive.

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