Survival of the tastiest
Demystifying consumer preferences and competitive strategies
Picture a shopper wandering the aisles of a grocery store, searching for something to satisfy their hunger or quench their thirst. They may reach for a familiar brand or, increasingly, be tempted to explore adjacent categories or venture beyond the expected to find what they crave. In the ever-changing world of the food and beverage (F&B) industry, understanding who your competition is can be a complex and elusive endeavour.
Our framework sheds light on the nuances of consumer preferences, connecting demand with the shopper's lens and emphasizing the importance of distinguishing between long-term and short-term influences over the shopper. The research reveals a compelling correlation between less preparation time and more expensive occasions, while emotional needs like unwinding and spending quality time together command higher prices.
“Weekend Reward” and “Stop & Go” occasions are 30% and 34% more expensive, respectively, than the average Demand Moment.
In our current inflationary climate, short-term changes can have a profound impact on consumer habits. The study compares long-term category priorities and the tactical activation of opportunistic growth. In the United Kingdom, for example, rising inflation has been mirrored by a decrease in healthier and balanced Demand Moments, while basic demands such as “Kick Start” and “Filling Meals” are experiencing growth. Understanding the balance between long-term trends and short-term circumstances such as these is crucial.
The role of retail
Different retailers and retail formats also play distinct roles in each Demand Moment. Hard Discounters have a more robust presence in basic nourishment demands, especially in “Filling Meals”, where they are 30% larger than the average channel in the UK. In contrast, top retailers, delis, and specialist shops hold more significant positions among healthy, balanced, and higher dedication moments like “Time & Effort”.
To navigate this shifting landscape effectively, food and beverage brands must develop a deeper understanding of price indexes, where emotional factors and time pressures allow them to set prices that add value. By recognizing these changes in consumer preferences and adjusting their strategies accordingly, they can successfully traverse the competitive terrain.
“The key is to understand not only the changing consumer preferences but also the unique roles that different retailers play in fulfilling these demands”. Brands that can strategically adapt their offerings and leverage these insights will be better positioned to succeed in this competitive market that is still trying to understand the impact of high inflation, particularly in European and North American markets.
To illustrate the power of the Demand Moment framework, let's use the ice cream category as an example. This is a category where some brands, such as Halo Top and Oreo, have found impactful ways to expand their appeal and exposure to a wider range of Demand Moments than we might expect. In these instances, ice cream demonstrates a strong presence in the most emotional scenarios, particularly in Sofa & Chill and Taking Time Together, but there are also unlocked growth opportunities in more functional moments such as Afternoon Treat and Filling Meals.
Innovation plays a central role in unlocking growth opportunities
Halo Top in the UK has helped to reinforce the category in Sofa & Chill, Complete & Balanced, and Time & Effort. Additionally, this lower-calorie, high-protein ice cream has expanded the premium tubs' appeal to a new demand of Simple & Healthy.
Another intriguing example of how category stretching immediately unlocks a complementary set of demands is Oreo. Oreo is among the top 10 brands that added the most shoppers in 2022 in Spain, with 27 million additional households. This is a highly visible case of how category stretching (in this case, from cookies to ice cream) can unlock a completely complementary set of demands, from Nourishment & Restore to Unwind and Taking Time Together, bringing almost 3 points of additional penetration to the total brand.
