Volume 2 | Issue 2 | Year 2006

Although consumer behavior is complex, a clear understanding of consumer values, attitudes and behaviors, combined with associated product trends, provides powerful insight into what drives today’s consumer buying habits. For a product to be successful, being alignedÿon at least one of these mega trends will be crucial. Only by understanding the new interpretations of the mega-trends can food and drink producers remain `on-trend’ in the long-term.

Over the past five years Datamonitor has been tracking the consumer trends that are shaping the consumer packaged goods’ markets. This research has revealed 10 core `mega trends’ based on changing consumer values and attitudes which in turn influence buying behaviour. These 10 mega-trends will impact and shape new products and services for years to come.

Datamonitor groups the mega-trends into two separate categories – `complexity’ and `benefit’ trends. The former relate to socio-demographic changes such as rising incomes and aging populations. The benefit trends – for which convenience, health and sensory are the most important – relate to specific product attribute benefits that consumers value as a result of the trend’s relevance upon their lives. The following is a brief summary of each trend and its impact on food and drink purchases:

Age complexity: Food and drink brands need to better understand the changing attitudes of the young and old and reflect this in their marketing. Age complexity denotes the blurring of age as a role-definer, such as older consumers defying conventional associations with aging and kids maturing younger than ever. Traditional characteristics, such as life-long brand loyalty are less prevalent as a result of the age complexity trend. Therefore, there is a significant opportunity to market food and drink products with new flavor profiles to this audience.

Gender complexity: Traditionally, gender segmentation has proved to be one of the most useful and simple forms of demographic segmentation. However, gender roles are less defined than ever before especially with the feminization of society, leading to a strong crossover of product use and behaviors from males to females and vice versa.ÿOur global consumer survey showed that men were on a par with women in terms of the level of importance they placed upon improving their health. Food and drinks’ players can now actively target male consumers with diet brands and healthier alternatives. At the same time, gender specific targeting remains relevant. For example, PepsiCo UK launched Nobby’s crisps and nuts in 2005 with the aim of targeting male consumers’ desires for a more substantial fill.

Lifestage complexity: Trends concerning boomeranging children, extended single lifestyles and an increasingly longer lifespan have all become more pronounced across the globe. Manufacturers must recognize that consumer lifestyles are becoming more changeable and therefore must be more flexible in the way they target consumers according to lifestage assumptions. The growing opportunity of meals for one is one outcome of this trend.

Income complexity: The notion of luxury is becoming increasingly complex as consumers, especially those in the mid-market, acquire greater wealth. Rising mass-market expectations regarding quality creates problems for mid-market food and drink offerings, which can appear bland by comparison. As discounting becomes increasingly common, and other brands move up-market to sub-premium or luxury, there is a growing gap in the mid-market. With this food and drinks markets are polarizing, thereby creating bigger opportunities for growth at the top and bottom ends of markets. Food and drinks brands/products operating in the middle run the risk of getting trapped in the middle. These brands need re-aligning via a luxury boost or a changing focus on value.

Convenience: Consumers across the globe continue to report problems with maintaining a work-life balance and increasingly seek solutions that create time. ‘Pit-stopping’ behaviors such as workplace consumption and consuming on-the-move have become more pronounced. In food and drink, snacking has evolved into a trend towards light meals, where consumers seek more filling and substantial meals to facilitate their `flexi-eating’ habits. There are numerous product attributes that can be incorporated to capitalize on the trend. Products that are easy to carry, portable, fast-acting, lightweight, pre-prepared, resealable, simple, and compact will appeal to today’s convenience orientated food and drink shopper.

Health: In Datamonitor’s 2004 global consumer survey, 66 percent of consumers felt that “improving health through diet” was important and 58 percent of respondents reported that they had done more “to improve health through diet” in 2004. This is symptomatic of how the growing demand for healthy products is not only being driven by those strictly maintaining a healthy lifestyle, but also by mainstream people who are attempting to live a little healthier. From a product attributes perspective, desirable features include additive-free variants, low and light variants, smaller portions, lighter and zestier flavours, freshness and energy providing ingredients.

Sensory: Finding excitement and sensations in life has never been more important to consumers as they searchÿfor more interesting, exotic consumption sensations from food and drinks. As consumers experiment, their tastes and preferences have become more refined, something reflected by how `seeking authenticity’ has evolved to ever-more detailed flavor profiles associated with specific regions within countries rather than countries per se. Embracing specialty and gourmet food and drinks has also become more pronounced as the trading-up trend in food and drinks continues unabated. Food and drink products must focus on sensory awakening attributes such freshness, scents, novelty, interactivity, texture to bring the product in consumers’ consciousness.

Individualism: Individualism needs areÿfueled by a proliferation of personalized offerings made available across all consumer goods sectors.ÿFrom customized labeling,ÿto choosing hundreds of different ways to enjoy a cup of coffee, consumers’ moreÿcomplex desires are being met.ÿThe individualism trend is often represented by “expressive consumption;” thisÿhasÿbecome more established as more consumers purchase products and brands that match their values and general attitudes on life.ÿThe notion of `attitude branding’ – particularly in fashion brands – reflects this, as does the manufacturers from a broad range of industries that are giving consumers more opportunity to co-create products and services.

Comfort: In a changeable world consumers search for little symbols of stability and permanency. This is being done by increasingly consuming comforting products and making attempts to slow down and simplify lifestyles. In 2004, 42 percent of European and U.S. consumers indicated they had consumed more comforting food and drink products and an even higher proportion (51 percent) had enjoyed more small indulgences to escape the pressures of everyday life.

Connectivity: Ethical consumerism has become further established in the mainstream, which is indicative of the growing importance of shared ethical and environmental values. However, an “attitude-behavior” gap exists as fewer consumers buy ethical goods than those who deem this to be important, suggesting the trend will evolve further. Food and drink brands rising on the ethical wave need to ensure that indulgence and quality remain a key part of the selling proposition, otherwise they will be ignored by consumers. Elsewhere, with a greater prevalence towards home entertaining, food and drink manufacturers are presented with opportunities to develop products for such occasions. For example: self-contained meal kits that consumers can easily prepare and proudly serve guests at dinner parties have been a growing phenomenon in urban hubs around the world. Importantly such a concept does what will be increasingly important in future branding efforts: offering desirable attributes from more than one-mega-trend in to one concept (in this case convenience and connectivity).

These trends show a vastly different culture of buying than we had in years past, but also point to ample opportunities. In the growing complexity of the food and beverage market, one thing is certain: abundance in choice is the rule as far as what to offer consumers in years to come.

Daniel Bone is Consumer Market Analyst for Datamonitor, the world’s leading provider of online data, analytic and forecasting platforms for key vertical sectors. Visit: www.datamonitor.com.