Freshlogic are food market analysts with expertise in fresh and prepared foods. Specialising in interpreting market conditions, Managing Director Martin Kneebone analyses prevailing consumer attitudes that are impacting apple and pear buyer behaviour including the trend towards more snacking, the influence of new channels to the consumers, demand for health and wellness, an interest in food provenance, and an aversion to waste.
Today’s lifestyle patterns reflect more time pressure and household eating patterns that continue to shift away from traditional structured meals towards more snacking and grazing. The total Australian retail snack food market is now valued at $9.4 billion and contributes a substantial 11 per cent of the total food and grocery retail market value.
Consumers consider ‘healthy snacks’ to include yoghurt, muesli bars, nuts and fresh fruit. These products combine to contribute 40 per cent of the total snack food market and generate annual retail sales of $3.75 billion. Fresh fruit dominates this group of healthy snacks by contributing 53 per cent, or $2 billion. All indications are that this demand is supported by fresh fruits’ portion size, portability, nutrition and minimal preparation requirements.
This level of market share confirms that fresh fruit enjoys strong demand in the snack food market despite the competition from other snacks that are often supported by high profile consumer brands. Buying and use patterns reflect that many consumers buy snacks with the grocery shopping for consumption ‘in the home’ and for transporting to ‘out of the home’ locations such as work, school or the gym, or for consumption on the go. The robust portability of fresh apples makes them well suited to this usage pattern.
More influences affect food choices
The dynamics that influence what food consumers buy and then include in their regular household menus continues to evolve. The pathway to reach consumers was once dominated by the prerequisite to first gaining shelf space of the major retailers. While this remains a key platform to reaching the largest distributors in retail, it is no longer the only option to influence consumers.
It is now possible for most, if not all, participants in a supply chain to engage directly with consumers. This is enabled through a combination of the digital capacity and new age media. It has drawn activity and content from several participants that broadly fall into the following three groups:
- Organisations with direct commercial food interests, e.g. growers, manufacturers, retailers, and food service operators.
- Organisations with indirect food commercial interests and or formal training, e.g. dieticians, nutritionists, chefs, health and wellness experts, and finance experts.
- Other social commentators with media or business interests, e.g. health and wellness influencers, finance influencers, television personalities, foodies, and bloggers.
This activity has generated more content and led to consumers becoming more informed, or at the least, being able to answer more detailed questions more easily. The breadth of available information has elevated the gatekeeper role of those with skills or capacity to influence internet search engine rankings and fuelled the level of investment in online advertising. In short, as more information has drawn more interest, it has been followed by more investment to ensure selected content is ranked higher following certain internet searches.
Changing food values
This increased access to information has coincided with shifts in the attributes consumers value and are prepared to pay more for. In terms of health, the base desire to eat well and be healthy has broadened to encompass many elements.
This is reflected in what is now termed a ‘health and wellness’ set of priorities, which has evolved into a lifestyle, and is centred on long-term health and overall wellbeing. The attention has changed from being reactive – in response to a specific condition – to being proactive. This approach incorporates not only physical wellbeing, but also mental or emotional health. This has been influenced by increased awareness of the link between what we eat, and how we ‘feel’, with food now more widely viewed as medicine.
With easy access to information and the impact of influencers driving particular issues, consumers are more informed and aware of their own dietary needs and want to be able to customise their diet to support their own personal goals. They are now buying food for the health and wellness benefits that they believe their food will provide, and they seek and are prepared to pay for attributes that suit their needs. For example, half of all Freshlogic Mealpulse™ (a consumer research panel focussed on food) households indicate they are willing to pay more for healthier food, and 70 per cent report they have changed their eating habits towards a healthier diet in the last year.
However, while food remains central to healthy outcomes, it is now sharing the delivery of health and wellness with other things. For example, while many public health initiatives were focused largely on diet (e.g. Go for 2&5 ), there has been a move towards programs aimed at exercise and keeping active, as well as promotion of activities to improve mental health.
Food stories add value
Along with an interest in wellness, consumers have a desire to understand the story behind their food, including where it has been farmed, the farming systems used, and how it has been processed. This interest is anchored on broad goals centred around personal and corporate responsibility and sustainable management of resources. These views are shared by many, but are stronger among younger households, which reflects the elevation of environmental and social issues in educational content over the last 20 years.
The level of commitment is reflected in a willingness to pay more for products that have attributes that align with the consumer’s values and lifestyle. This propensity is reflected in the value associated with food produced in systems like organics and also extends to products supplied from local growers. For example, 44 per cent of Freshlogic Mealpulse™ households report a willingness to pay more for local products in 2017 (up from 40 per cent in 2014), and 24 per cent report a willingness to pay more for organic products (up from 20 per cent). However, the level of willingness to pay may vary across categories and can be influenced by the trade-off consumers make with other product attributes such as value and convenience.
Waste reduction matters
In line with the elevation of environmental and social issues, consumers are expressing an increasing aversion to waste – both at a corporate level and in the home. The waste issue has increased in profile recently because options that previously allowed Australia to export waste overseas are now more restrictive, and because of the implementation of a range of public and corporate initiatives to support reduced waste, such as the ban on single use plastic bags by major food retailers.
The concern around sustainability and waste minimisation is expanding to include not only food waste, but also packaging waste. This trend is influencing how consumers shop by strengthening demand for small portions which allow consumers to reduce home food waste, as well as fuelling demand for recipe kit meals where the exact portions required are provided.
The concern around packaging waste is complex, as there are also clear advantages of packaging for consumers and the supply chain, such as the convenience of grab-and-go products, reduced in-store waste, assured product identification, and efficient home storage solutions e.g. resealable bags. Packaging also provides an effective way to communicate important product features and attributes which the consumer is seeking.
The waste concerns have been elevated by changes in the recycling systems that have closed the bulk exporting of our plastic waste. This has rapidly drawn the spotlight onto what is generating waste and sparked action from retailers on the highly visible single use plastic bags. Fast and complete solutions to waste recycling will take time, as they are likely to require changes to recycling systems. However, while these changes evolve, all indications are that the advocates for the waste-minimisation cause, enabled by their social media reach, are highly likely to find and focus on food packaging.
The price look-up (PLU or databar) sticker identification system now in use in Australia for loose apples and pears could prove to be an advantage in these conditions by helping to maintain retail range depth and minimise packaging.
Apples and pears at an advantage
Apples and pears are well placed to benefit from the prevailing consumer attitudes and trends in buyer behaviour, including increased snacking, new channels to the consumer, a desire to eat well and feel good, an interest in food provenance, and an aversion to food and packaging waste.
Being a familiar and versatile fruit with year-round availability, and widely recognised as a convenient and healthy snack, apples and pears naturally possess many of the attributes that consumers say they are willing to pay for.
While there are new and emerging channels to communicate and influence household menus, the space is crowded. The proliferation of information, range of influences and influencers, and the ease of access to this information all point to the importance of having a clear and easy to understand marketing message that will cut through to consumers.