Product transparency driving sales growth in consumer goods
- Nielsen said consumers look for transparency in three key attributes when it comes to making food purchases in the fast-moving consumer goods arena: sustainability, processing claims (such as organic or natural) and ingredients. With access to a lot of information, shoppers can be selective and look for products and services that meet their specific needs.
- Nearly 65% of U.S. households buy sustainable products, according to the Nielsen report. The greatest sales growth in that area comes from products that claim sustainable farming (+14%), social responsibility (+8%), sustainable resource management (+6%) and sustainable seafood (+3%.)
- Nielsen also found 67% of consumers wanted to know everything that goes into the food they buy. And 46% of Americans said food product claims have a direct influence on their purchases, including words such as “organic,” “natural,” and “free from.” Still, consumers increasingly read ingredients labels because they don’t necessarily trust generic health claims. They are much more likely to trust FDA-claims such as “low sodium” or “heart healthy.”
In the past, shoppers might have based purchases solely on price, convenience or taste. But in today's digital information age, consumers want access to the story behind the foods they are buying and the companies they are buying from. Increasingly, brand transparency is a key and increasingly relevant part of helping consumers decide which products they place in their shopping carts.
With so many shoppers with different needs and preferences, there isn't a catchall way for food companies to market to consumers. Still, Nielsen says food producers should focus on sustainability, health claims and ingredients. While including some of this information on labels and store boards is certainly important, companies also must share their story across digital platforms.
Boxed Water, for example, has effectively used Instagram to reach potential buyers, and lays out its history and mission in a stylish way online, even pledging to plant a few trees in exchange for an email address. Food companies, no matter their size, would do well to mimic these efforts, in order to reach customers where they are and help separate themselves from the competition.
Nielsen said shoppers with a health and sustainability lifestyle are 67% more likely to be active online than the average U.S. consumer, and that one in five are likely to shop using a mobile phone or tablet. Companies who don’t create an online presence around sustainability will likely leave money on the table, especially with online shopping expected to reach $100 billion by as early as 2022. In a separate study, Nielsen estimated 70% of shoppers will at least occasionally shop for groceries online by that time.
Some companies have already tapped into consumer demand for sustainability. AB InBev, the maker of Budweiser, has committed to source all of its electricity needs from renewable sources by 2025. The beer company also is looking at new crop management techniques and developing seeds that don't need as much water. In January, Coca-Cola announced a goal to collect and recycle the equivalent of 100% of the packaging it sells globally by 2030. Countless other companies have made similar pledges, including PepsiCo, Nestle, Mars, Unilever and Walmart.
A single strategy for marketing health claims is tricky, but companies would do well to stay away from generic ones that risk turning off consumers. As Nielsen suggests, brands and stores should ensure on-pack claims are meaningful and will be trusted by the consumer. In addition, buyers, often following specific diets, are increasingly looking for foods that are “free from” certain ingredients. Food producers should clearly mark foods, such as those without gluten, and market them in ways to best ensure they end up in hands of interested consumers.
Food companies and stores may need to try a few different methods before succeeding, but they should recognize the need for transparency in the products they sell is here to stay. It's also not enough to just claim to be transparent but to actually follow through and do it in a way that will be positively received by the consumer.