Hanging tough

by Jennifer Barrnett Fox
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The year 2009 brought considerable changes in the way consumers think about food. Job cuts, lost benefits and reduced spending spurred a new mindset surrounding food purchases and how it can be a means to a healthy lifestyle.

In January, trend forecasters remarked on the lack of typical diet-themed products. Instead, consumers

declared their intention to create personalized diets, choosing options that embraced healthy living with minimal compromise in terms of flavor and texture. Beyond nourishment, food was simultaneously recognized as an indulgence and a tool to fight disease. In response,

manufacturers regrouped with great-tasting products that addressed consumer concerns regarding heart

disease, diabetes, gluten intolerance and food allergies.

“Consumers are the key driver shaping the landscape of the better-for-you categories,” said Abby Ceule, marketing manager, Caravan Ingredients, Lenexa, KS. “When consumers are able to identify with the foods they are consuming, their view of perceived value and benefit goes up.”

Hill & Valley, Rock Island, IL, a manufacturer of sugar-free and no-sugar-added desserts and snacks, tweaked traditional favorites to have healthier profiles. MaMa Rosa’s, Sidney, OH, combined the indulgence of pizza into a healthier food option with its Lean Lifestyle products. The whole-grain pizzas are low in cholesterol, high in fiber and carry certification from the American Heart Association.

“Food has come to occupy a focal position in the prevention and treatment of many chronic diseases, and consumers have become attuned to innovative products that offer a condition-specific shot in the arm,” according to a report from Packaged Facts, a marketing research provider in Rockville, MD.

Just the Facts. In step with consumer demands, manufacturers used front-of-package claims to convey health messages. Throughout the year, the content and presentation of health claims on packages fluctuated as a result of changing consumer demands. What began as simple package callouts evolved into an increasingly sophisticated collection of symbols with companies creating their own stamps, checkmarks or certifications. But soon, manufacturers found it necessary to defend themselves against a growing backlash, as consumers questioned the expanding patchwork of front-of-package claims. By late October, a number of companies, including Unilever, General Mills, Kellogg

Company and Kraft Foods, Inc., decided to phase out the use of the Smart Choices green checkmark label following an announcement from the Food and Drug Administration (FDA) for

review of front-of-package claims.

Consumers increasingly keep manufacturers on their toes, but the industry also benefitted from increased transparency and dialog with consumers. Social media tools such as Facebook, YouTube, Twitter and blogs allow companies almost instantaneous feedback, which can be both positive and negative. With real-time interaction, it’s more important than ever for companies to know who’s talking about them and what they are saying.

“Facebook, blogs, word-of-mouth (WoM) forums and YouTube are perfect vehicles for a company like ours with a small marketing budget,” said Cory Colligan, director of marketing and sales for Bouquet of Fruit, a manufacturer of fruit bars in Fresno, CA. “I’m learning something new every day, and social media has turned out to be an easy, cheap way to share and capture information.”

Kraft Foods, Inc., Northfield, IL, and General Mills, Minneapolis, MN, both use WoM marketing. In exchange for an e-mail address and other limited personal information, consumers are asked to pass along comments about the products they use from the company. Members are not paid by the companies to join the networks.

The baking industry continues to use social media as a tool to provide the education and consumer awareness to keep the momentum of grain consumption moving forward. Organizations such as the Whole Grains Council (WGC), Wheat Foods Council (WFC) and Grain Foods Foundation (GFF) use social media to provide quality messages about grains to consumers while also deflecting misinformation propagated by the mass media.

“The media is so cluttered with conflicting information about grains and diet in general that it’s important for consumers to use common sense when it comes to their health,” said Judi Adams, president, GFF.

Despite an increasing amount of information to sift through, many consumers embraced the mentality that knowledge is power. Knowing what you eat, what it’s made from and where it’s manufactured can impart a feeling of control over personal effect on the planet as well as on familial health and well-being. New England Natural Bakers, Greenfield, MA, linked natural ingredient nourishment with nurturing of the environment. The company donates 10% of profits from its organic granola bars and granola to social and environmental sustainability products.

Anthropologic research from the Hartman Group, Bellevue, WA, earlier this year found that consumers link sustainability to terms such as simple living, authenticity, simplicity, control and nurturing. “Those companies that give consumers precisely what they want or give them the freedom to customize their purchases will do well. Companies that fail to do this will see consumers walk away,” predicted Mintel, a Chicago, IL-based research company. Mintel’s trends analyst Lynn Dornblaser was quoted in an Oct. 27 USA Today article saying that

companies that offer products with the fewest ingredients will be more sought after than those with “organic” or “natural” labels.

Change it Up. Another consideration for manufacturers is an ever-evolving customer base. The purchasing power of the growing Hispanic population is estimated to reach more than $1.2 trillion by 2012. Companies both large and small are recognizing consumers who view food as a symbol of love. “El amor entra por la

cocina — Love enters by the kitchen.” Ruldolph Foods, Lima, OH, employs observation and focus groups from its top Hispanic markets and input from employees to produce an authentic product that is regionally relevant to its consumers. “With a forecast of a 20% population growth, this is an important group to listen to,” said Mark Singleton, vice-president of sales and marketing, Rudolph Foods. “This is a loyal and sophisticated consumer, and if you just ask, they will tell you exactly what they want.”

But don’t limit ethnic-influenced offerings solely to the Hispanic market. The Food Flavors and Ingredients

Outlook 2009 from Packaged Facts predicted consumer interest in experiencing new ethnic flavors and cuisines is expected to continue reflecting the growth of ethnic populations and evolving mainstream tastes. The Inventure Group, Phoenix, AZ, recently introduced Rice & Bean tortilla chips under its T.G.I. Friday’s brand made with adzuki beans, a legume widely grown east Asia. Meeting trends for both exotic flavors and clean labels, private-label grocer Trader Joe’s offered Mexican Hot Cocoa cookies.

The Hain-Celestial Group, Boulder, CO, worked with professional chefs to produce a line of root and vegetable chips. A number of companies are employing chefs to create restaurant-influenced flavors using Culinology, a blend of culinary arts and food science. Danny Bruns, corporate chef at Kerry Ingredients, Beloit, WI, helps manufacturers transfer functional ingredients into a manufacturing environment — translating the flavors, seasonings and visual appeal of classically prepared dishes into corn tortillas and finished dough products. Michael Season’s, Addison, IL, builds its snack line around a promise of all-natural

ingredients, with no preservatives, artificial flavorings, colorings or hydrogenated/partially hydrogenated oils.

This kind of innovation rejuvenated grain-based foods in consumers’ minds, highlighting their versatility and value while piggybacking on consumer desires for clean labels, environmentally and socially responsible production and organic or all-natural ingredients.

Giving Value. Although many companies decreased reliance on front-of-package claims, use of the WGC Whole Grain stamp expanded. In October, WGC reported that the stamp was used on more than 3,000 products in 14 countries. The efficacy of whole-grain content labeling recently received support from the Institute of Medicine, which recommended FDA support whole-grain labeling. “If consumers learn a bit more about what to look for [on labels] and manufacturers work to be more clear on their labels, the two will meet in the middle, and both will benefit,” said Cynthia Harriman, director of food and nutrition strategies, WGC.

GFF, which was specifically created to educate consumers on the benefits of grains, instructs consumers on the economic and nutritional benefits of grain-based foods. Its Web site, www.grainpower.org, provides a calculator allowing consumers to calculate the savings of brown bagging lunch. WFC’s Web site, www.wheatfoods.org, encourages consumers to post comments so

WFC personnel can correct misinformation and address questions regarding grains.

The continued growth of private-label offerings in part reflects consumer desire to save money without sacrificing taste. Mintel reported private-label bread has a higher household penetration than name-brand bread. Even convenience stores are embracing the private-label trend. In October, 7-Eleven added 15 new bakery products to its 225 existing private-label offerings.

“Customers who turn to private label are looking for better values and ways to save money,” said Joe Hermes, senior product director for bakery and produce, 7-Eleven, Dallas, TX. “But just saving money isn’t enough to keep them as repeat purchasers. Our goal was to match or

improve on the taste and quality of the baked foods by the national brands. If you can do that and save customers money, they’re more likely to become loyal to that product.”

As consumer spending continues its rebound, smart manufacturers will persist with many of the same behaviors that brought them success in 2009 — marketing for value, health, environmental awareness and innovative flavors. “As consumers become more aware and educated about the foods they consume, their perceptions will change on what is good for them and their families,” Ms. Ceule concluded.

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