Affluent Consumers in the New Economy: Food and Foodservice

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  • 1. Get more info on this report!Affluent Consumers in the New Economy: Food and FoodserviceJuly 1, 2009The economic turmoil that reached crisis level in fall 2008 has been a bull in the chinashop of American consumer behavior, even for a market as fundamental as food. Foodspending, fueled by price increases but dampened by consumer cutbacks, took on avolatility that matched the chaotic economic trajectories of American consumers. Evenwithin the affluent cohort of upscale-to-affluent U.S. adults ($75K+ individuals; $100K+households), as of first quarter 2009, nearly a fifth described themselves as significantlyworse off than they were a year ago, and nearly a fourth described themselves assomewhat worse off..Focusing on this upscale-to-affluent U.S. cohort, Affluent Consumers in the NewEconomy: Food and Foodservice examines how responses to economic turmoil areaffecting consumer demand for food products and chain restaurant services. Notably,for example, affluent consumers who have taken a financial hit are more likely to shopfor organic and natural foods, and are more sensitized to ethical consumerism issues. Inaddition, affluent consumers whose financial situation has recently worsened orimproved show higher levels of health and nutrition consciousness, as well as a keenertaste for food adventure. In an era of widespread economic turmoil, such psychographicresponses to financial setback and financial recovery will shape and transformconsumer spending on food.The effects of economic turmoil are being seen not only in which types of food productsconsumers are buying, but in which retail channels and chains they are flocking to.Although affluent consumers remain less likely than the rest of the population to shop atWalmart supercenters, they are shifting to Walmart at above-average rates, makingsupercenters an ever-bigger part of the equation for marketers of affluent foods. At thesame time, shopping patterns for Trader Joe’s and warehouse clubs show theheightened potential for adventurous but value-priced store brands among the affluentcohort.The effects of economic turmoil are also presenting broadly felt and widely reportedchallenges to the foodservice industry. Even within the current environment, however,specific segments of affluent consumers are more receptive to healthy fast food andmore likely to find that fast food fits their current lifestyles. Therefore, the true task forrestaurants is to match supply to demand, rather than to create or maintain it.
  • 2. Successful foodservice strategies must accommodate generationally and regionallyinflected economic contexts, food landscapes, nutritional psychographics, andconsumer lifestyles.Overall, consumers who have been set back or thrust forward financially are more likelyto be thinking and rethinking about what they need, what they want, and how and wherebest to find it. For marketing and customer communications, as discussed in this report,more is now more.Read an excerpt from this report below.Report MethodologyThis report is primarily based on original research and analysis. The analysis of affluentconsumer trends, demographics, and psychographics derives from custom extractionand cross-tabulation of data collected by Experian Simmons (New York, NY) in itsWinter 2008/09 National Consumer Study (fielded from late July 2008 through lateMarch 2009), which is based on 13,128 U.S. adult respondents. In addition, this reportdraws on recent Packaged Facts consumer market studies, as well as relevant datafrom various government, business, and trade sources.Additional InformationMarket Insights: A Selection From The ReportMarketing in a Subprime EconomyIn a down economy, consumer attention has gone up. As with the parallel case of retailformats, the days when marketing messages commanded a captive audience are longgone, and being cast deeper into oblivion with each turn of the screw in communicationtechnologies. But for the current period, at least, consumers have become moreattentive to their spending options, saving strategies, and product choices.Coupon Use on the RiseAs discussed in Packaged Facts’ December 2008 report, The Couponing Consumer ina Down Economy, coupon use is on the rise. The economic situation has sharpenedconsumers’ focus on ways to get more value from purchases, and coupons are onetried-and-true method. A 2008 poll by ICOM Information & Communications of morethan 1,500 U.S. shoppers found that 89% of respondents were either much more likelyor more likely to use coupons in the case of a recession. An August 2008 online poll byProspectiv of 1,386 consumers found that 72% were using more coupons than they did
  • 3. six months ago, with the economic downturn being the top reason for doing so. AFebruary 2009 online poll of 4,000 nationally representative households by RetailForward found that 32% of shoppers are using coupons more frequently(retailforward.com), while a May 2009 study of 1,225 adults by Ad-ology Research putsthe proportion at 40% (Advertisings Impact in a Soft Economy; www.ad-ology.net).Thus, Inmar CMS Promotion Services data show coupon redemption increasing by 10%in fourth quarter 2008 compared to fourth quarter 2007-the first jump in redemptionsince the early 1900s (cms.inmar.com).Affluent Consumers Migrating to the InternetAs discussed in Packaged Facts’ report on The Affluent Market in the U.S. (April 2007),upscale consumers have skewed to something old, something new in mediaconsumption-to newspapers, magazines, and radio on the one hand, and to the Interneton the other. They are less likely to depend on TV as a source of information andentertainment, and more likely to multitask when they do watch television. However, asevidenced by the financial woes of even venerable papers such as the Boston Heraldand the San Francisco Chronicle, and by...TABLE OF CONTENTSChapter 1: Affluent Consumers in Context Scope and Methodology of Report The Economic Context Figure 1-1: Quarterly Personal Consumption Expenditures on Food, 2006-2008 (billions of dollars and percent change) Figure 1-2: Consumer Price Increases for Food, Food at Home, and Food Away From Home: May 2008 through April 2009 (percent increase) Figure 1-3: Consumer Distribution Based on Change in Financial Situation, Q3 2008 to Q1 2009 (percent of U.S. adults) The Affluent Consumer Figure 1-4: Affluent Consumers: Largest Demographic Blocs, Q3 2008 to Q1 2009 (percentages, number, and index) Figure 1-5: Affluent Consumers: Top Demographic Indicators, Q3 2008 to Q1 2009 (percentages, number, and index) The Affluent Consumer and Financial Change Figure 1-6: Consumer Distribution by Economic Cohort and Change in Financial Situation, Q3 2008 to Q1 2009 (percent) Figure 1-7: Patterns by Age Bracket: Financially Worse Off Affluent Consumers, Q3 2008 to Q1 2009 (percent and index) Figure 1-8: Metro Area Patterns: Financially Worse Off Affluent Consumers, Q3 2008 to Q1 2009 (percent, number, and index)
  • 4. Figure 1-9: Live Events Disproportionately Experienced by Worse Off Affluent Consumers, Q3 2008 to Q1 2009 (percent, number, and index) Figure 1-10: Selected Demographic Indicators: Financially Better Off Affluent Consumers, 2008 to Q1 2009 (percent, number, and index) Financial Change and Financial Insecurity Figure 1-11: Consumer Distribution by Economic Cohort and Sense of Financial Security, Q3 2008 to Q1 2009 (percent) Figure 1-12: Affluent Consumer Indexes for Agreement or Disagreement with Statement, “I Feel Financially Secure”: Selected Demographics, Q3 2008 to Q3 2009 (index)Chapter 2: Food Psychographics & Financial Change Grocery Spending Patterns and Skews Figure 2-1: Average Weekly Household Grocery Expenditures: By Economic Cohort, Q3 2008 to Q1 2009 (percent) Figure 2-2: Average Weekly Grocery Shopping Expenditures Among Affluent Consumers: By Change in Financial Situation, Q3 2008 to Q1 2009 (percent) Financial Changes and Organic/Natural Foods Figure 2-3: Agreement Among Affluent Consumers with Statement, “When Shopping for Food, I Especially Look for Organic or Natural Foods”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index) Figure 2-4: Agreement Among Affluent Consumers with Statement, “When Shopping for Food, I Especially Look for Organic or Natural Foods”: By Change in Financial Situation, Q3 2008 to Q1 2009 (percent) Financial Setback and Doing the Right Thing Figure 2-5: Ethical Consumption Psychographics: Affluent Consumers by Change in Financial Situation, Q3 2008 to Q1 2009 (percent) Financial Changes and Health/Nutrition Consciousness Figure 2-6: Agreement Among Affluent Consumers with Statement, “I Work at Eating a Well-Balanced Diet”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index) Figure 2-7: Agreement Among Affluent Consumers with Statement, “I Prefer Foods Without Artificial Additives”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index) Figure 2-8: Agreement Among Affluent Consumers with Statement, “I Think of the Calories in What I Eat”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index) Figure 2-9: Agreement Among Affluent Consumers with Statement, “I Am Currently Dieting”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index) Figure 2-10: Agreement Among Affluent Consumers with Statement, “I Usually Only Snack on Healthy Foods”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index) Financial Changes and Food Adventure
  • 5. Figure 2-11: Agreement Among Affluent Consumers with Statement, “I Enjoy Eating Foreign Foods”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index) Figure 2-12: Agreement Among Affluent Consumers with Statement, “I Prefer Foods Cooked With Lots of Spices”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index) Figure 2-13: Agreement Among Affluent Consumers with Statement, “I Really Enjoy Cooking”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index) Figure 2-14: Agreement Among Affluent Consumers with Statement, “I Look for the Freshest Ingredients When I Cook”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index) Figure 2-15: Agreement Among Affluent Consumers with Statement, “I Like to Try New Recipes”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index) Figure 2-16: Agreement Among Affluent Consumers with Statement, “I Like to Try New Drinks”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index) Figure 2-17: Agreement Among Affluent Consumers with Statement, “I’m Usually The First to Try New Health Foods”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index) Monthly Usage Patterns for Foodservice Figure 2-18: Monthly Usage Patterns for Chain Fast Food and Family Restaurants/Steakhouses: By Economic Cohort, Q3 2008 to Q1 2009 (percent) Figure 2-19: Monthly Usage Patterns for Chain Fast Food and Family Restaurants/Steakhouses Among Affluent Consumers: By Change in Financial Situation, Q3 2008 to Q1 2009 (percent) Fast Food Psychographics Figure 2-20: Agreement Among Affluent Consumers with Statement, “Fast Food Fits My Busy Lifestyle”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index) Figure 2-21: Agreement Among Affluent Consumers with Statement, “I Like the Trend Toward Healthier Fast Food”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index) Figure 2-22: Agreement With Statement, “I Prefer Fast Food to Home Cooking”: By Economic Cohort, Q3 2008 to Q1 2009 (percent) Figure 2-23: Agreement With Statement, “I Eating Fast Food Helps Me Stay Within Budget”: By Economic Cohort, Q3 2008 to Q1 2009 (percent)Chapter 3: Competitive Implications Demand for More, not Less, from Groceries Figure 3-1: Weekly Household Grocery Expenditures: Affluent Consumers, 2004 to Q1 2009 (percent) Grocery Shopping Outside of Supermarkets Figure 3-2a: Usage Rates for Selected Grocery Retail Channels and Chains: Affluent Consumers, 2004 to Q1 2009 (percent)
  • 6. Figure 3-2b: Usage Rates for Selected Grocery Retail Channels and Chains: Other Consumers, 2004 to Q1 2009 (percent) Figure 3-3: Affluent Consumer Usage Rates for Selected Grocery Retail Channels and Chains: By Change in Financial Situation, Q3 2008 to Q1 2009 (percent) More Openings for Store-Bought Meals Figure 3-4: Share of Frequent Users of Store Meals: Affluent vs. Other Consumers, 2004 to Q1 2009 (percent) Restaurants Fight the Home Court Advantage Figure 3-5: Use of Chain Restaurants: Affluent Consumers vs. Other Consumers, Q3 2008 to Q1 2009 (percent) Figure 3-6: Percent Agreeing With Selected Fast Food Psychographic Statements: By Economic Cohort, Q3 2008 to Q1 2009 (percent) Figure 3-7: Affluent Consumer Indexes for Agreement With Survey Statement, “I Like Trend Toward Healthier Fast Food”: By Selected Age and Regional Demographics, Q3 2008 to Q1 2009 (index) Marketing in a Subprime Economy Coupon Use on the Rise Figure 3-8: Use of Coupons for Food Spending: Affluent vs. Other Consumers, Q3 2008 to Q1 2009 (percent) Figure 3-9: Use of Coupons for Food Spending: Affluent Consumers by Change in Financial Situation, Q3 2008 to Q1 2009 (percent) Affluent Consumers Migrating to the Internet Figure 3-10a: Shopping-Related Use of the Internet: Affluent Consumers, 2004 to Q1 2009 (percent) Figure 3-10b: Shopping-Related Use of the Internet: Other Consumers, 2004 to Q1 2009 (percent) Figure 3-11: Shopping-Related Use of the Internet: Affluent Consumers by Change in Financial Situation, Q3 2008 to Q1 2009 (percent)Available immediately for Online Download athttp://www.marketresearch.com/product/display.asp?productid=2291282US: 800.298.5699UK +44.207.256.3920Intl: +1.240.747.3093Fax: 240.747.3004