A new report released today from Label Insight and Food Marketing Institute (FMI) revealed that grocery shoppers exhibit loyalty to those products that create deeper relationships through information exchange. The Transparency Imperative report found that shoppers increasingly demand transparency and a closer connection to their food, so much so that 75% are more likely to switch to a brand that provides more in-depth product information, beyond what's provided on the physical label. When shoppers were asked the same question in 2016 in a similar study by Label Insight, just 39% agreed they would switch brands.
FMI, with support from Label Insight, developed this report with the goal of defining what transparency means to shoppers and how it impacts their food retail purchases. The Transparency Imperative further delves into attitudes and behaviors among health-conscious shoppers, those who are digitally engaged, and reveals how consumers respond across generations. Recognizing these consumer audiences, the report recommends the necessary steps brands should consider to further embrace transparency; relay information beyond just ingredients; understand the specific needs of key shopper groups; meet the increased expectations of online shoppers; and track changing consumer preferences as this trend progresses.
In the report, 86% of shoppers agreed that if food manufacturers or retailers provided access to complete and easy to understand definitions for all the ingredients, it would result in more trust. Nearly as many shoppers (80%) said that they are more likely to be loyal to a brand that provides more in-depth information, beyond what is provided on the physical label. More than half of shoppers (54%) are even willing to pay more for a product that has additional product information.
"The new shopper mindset requires brand owners to think about their products well beyond the traditional label and respect a more digitally-minded consumer," FMI Vice President, Industry Relations, Doug Baker noted. "The study offers several considerations for how to make the best use of these findings, but overall, they require companies to recognize and communicate the importance of transparency and perform a thorough review of their unique consumer audiences and commerce channels."
What is Transparency?
The vast majority of consumers (69%) say it is extremely important or important that brands and manufacturers provide detailed information such as what is in their food and how it is made. Interestingly, online shoppers (80%), college graduates (76%) and higher grocery spenders, $125+/week (75%), were more likely to agree with this sentiment.
When asked to further define what elements define transparency, older generations (baby boomers and Generation X) are more likely than millennials to focus on a complete list of ingredients, ingredients descriptions and nutritional Information. Millennials also focus on these indicators, but they are more likely than older generations to look at allergen information, certifications and claims, explanations of ingredient usage information and other details such as animal welfare, fair trade and labor practices.
Meet the Health-Conscious Shopper
Nearly half (47%) of American households have someone on a diet or following a health-related program. These shoppers are even more likely to place a premium on transparency: 61% will pay more for products that offer in-depth product information, versus 54% of general shoppers. When a label is not sufficient, these shoppers (89%) are very likely to seek out information elsewhere. Nearly half of this segment (47%) would be very likely to use a smartphone in-store to find additional information beyond what's available on the label and the shelf.
According to AudienceSCAN, 66.9% of Healthy/Organic Shoppers are willing to pay more for higher quality products. They're also likely to turn to search engines to find out more about the products they're considering for purchase. In the last month, 64.2% of this audience has done so.
The study also found that the presence of children in the home increased the desire for transparency. Shoppers with children are more likely to place greater importance on ingredient information, nutrition and health benefits. They were also particularly likely to find value in accessing detailed product information in-store on their smartphone (87%) and to use this method (85%).
Grocery eCommerce Increases Transparency Expectations
The study found that 26% of shoppers purchased groceries online in the last 30 days. Yet this group represents a valuable demographic: they are more educated, have higher household incomes and more likely to have children under the age of 18. While millennials are disproportionately shopping online, they only make up 39% of online shoppers. Generation X (30%) and baby boomers (23%) also represent a significant portion.
grocery shoppers expect more product information (76%) when shopping
online than if they were in a physical store; and 72% believe that
getting product information is even more important when shopping online.
Additionally, 81% are willing to switch to a brand that provides more
in-depth product information, compared to 75% of general shoppers.
Healthy/Organic Shoppers don't just like shopping and researching products online, they also like digital advertisements. This group is 55% more likely than other adults to find social media advertisements useful to them, and 64% find mobile ads useful. Within the last year, 54.3% of these shoppers took action after receiving an email ad, and 40.7% reacted to text link ads on websites.
AudienceSCAN data is available for your applications and dashboards through the SalesFuel API. Media companies and agencies can access AudienceSCAN data through the AudienceSCAN Reports in AdMall.