Cost-of-living Crisis

Top Trend 1 - Maximize My Value

Consumers are Less Confident about their Financial Savings

Many people are experiencing the impact of rising prices and are actively looking for ways to reduce their expenses. The increase in prices is due to various factors such as crude oil costs, population growth, climate change, and disruptions in global supply chains. There is a growing concern about economic uncertainty and personal savings, leading consumers to adopt a more cautious approach. This shift is driven by a belief in insufficient household savings, resulting in more individuals feeling financial pressure and dealing with everyday living expenses. As a result, as consumers adopt more conservative and recession-based spending habits, their brand loyalty diminishes. This makes them more open to exploring different shopping options and engaging in both high and low levels of consumerism.

Consumers are Cutting Down on Non-Essentials as a Result of Rising Grocery Costs

When analyzing price inflation, consumers are more likely to observe price hikes in essential items such as bread and dairy, highlighting the challenge they face in reducing their shopping expenses. Despite their efforts, consumers may struggle to stick to a budget and occasionally make impulse purchases on non-essential items, leading to subsequent feelings of guilt.

Even before the recent surge in the cost of living, many consumers already found grocery shopping for food and beverages to be costly. The increase in prices over the past year has amplified these concerns. As a result, this has led to a rise in the percentage of individuals who perceive grocery shopping as expensive. Interestingly, the percentage of individuals noticing price increases remains consistent. This indicates that a growing number of people have previously felt capable of managing living costs but are now encountering difficulties. 

Consumers are Concerned about Rising Prices and Worry that Cost-Cutting will Impact their Physical and Emotional Health and Wellness

The increased emphasis on health in recent years, accelerated by the pandemic, has prompted many individuals to take an active approach to their well-being, leading to an overall sense of enhancement in their health. Consumers are driven to maintain these improvements for the long term. At the same time, a concern shared by more than half of global consumers is the impact of rising prices on their health and well-being.

This concern can be attributed to two primary reasons. Firstly, consumers perceive maintaining a healthy diet and consuming fresh foods as costly. This causes them to make trade-offs between nutrition and affordability. Secondly, consumers are apprehensive about the effect of rising prices on their emotional well-being, as it is associated with increased stress levels. This highlights the necessity for retailers, brands, and manufacturers to educate consumers on how they can uphold a healthy diet on a budget, by providing innovative solutions and guidance to challenge the notion that nutritious products come with a high price tag. Furthermore, this trend is also expected to fuel the demand for products and ingredients perceived to contribute to emotional wellness. 

Promote Value for Money Rather Than Low Price

Amidst consumer spending cutbacks, it is crucial to acknowledge that they are not solely seeking the lowest prices, but rather looking for products they consider to offer great value for money. Consumers perceive products as providing good value for money when they strike a balance between quality and price. Moreover, products that exhibit maximum effectiveness will strongly appeal to them. This may encompass aspects such as nutritional value, multifunctional attributes, and sensory appeal. Consequently, brands, producers, and retailers should highlight the value and narrative behind their products to resonate with consumer needs.

This article is based on FMCG Gurus: Top Trend 1 - Maximize My Value – Global Reports 2024. For more information, please click here.

Early Life Nutrition in the UK: Health, Convenience, and Cost

Introduction

Across the next year, a significant proportion of parents will be altering their diets and lifestyles, in line with rising costs. This will have an impact on their child’s health and wellness. Additionally, parents will be increasingly conscious of the long-lasting implications of COVID-19 on their children’s physical and emotional health. As a result, many parents recognize the impact that the cost-of-living crisis and the pandemic have had and continue to have on the wellness of their children. To cater to parents' need states, brands must ensure they stay up to date with early life trends in the food and drink industry.

Proactive Approach

Following the pandemic, a large proportion of consumers have integrated a proactive, prevention-over-cure approach to their child’s health and wellness. For instance, FMCG Gurus’ consumer insights highlight that 65% of UK parents stated that they have been more proactive in addressing their child’s health due to COVID-19. This demonstrates that for a significant number of parents, their child’s health and wellness is at the forefront before symptoms or health complications occur. Instead, parents are looking to boost multiple areas of their child’s health.

Convenient vs Natural

The appeal of quick, efficient, and on-the-go snacks and ready meals are decreasing in demand among parents in the UK. For example, FMCG Gurus’ market research reveals that of UK parents who have changed their dietary habits to address health problems, 42% increased their child’s consumption of fruit and vegetables. Also, 36% of UK parents reduced their child’s sugar intake. This suggests that many parents in the UK are seeking out a back-to-basics approach to their child’s nutrition. This is because parents are looking for fresh fruit and vegetables, with natural ingredients. Additionally, many parents are moving away from artificial ingredients and dietary evils such as sugar and GMOs.

Multifunctional Health Claims

Despite this turn away from ready-made meals and on-the-go food and drink, parents are still looking for convenience in other forms. For instance, when asked about the most appealing claims and factors in food and drink, 75% of UK parents said they like to see food and drink that helps promote a healthy diet, followed by products that enhance nutritional levels and strengthen immunity. This highlights how parents want products that have high nutritional value, to ensure that their child is getting sufficient nutrients and vitamins.

However, the reality for many parents is that they do not have the time to seek out various products that target specific areas of health. Instead, they are more likely to be drawn to multifunctional health-boosting claims. As a result, brands should consider developing products with multiple health benefits to appeal to parents' busy lifestyles. If these claims are backed up with clear and concise scientific evidence, many parents will deem these products as having maximum efficacy, value, and convenience.

Additionally, brands must make sure to avoid complex nutritional labeling. Instead, keeping labeling simple and concise will provide ease for parents when checking this.

Rising Prices

Brands should position food and drink products as being good value for money. This is particularly important during today’s recessionary climate. For instance, 41% of parents in the UK are concerned that rising prices will impact their child’s health over the next twelve months. Our findings illustrate how parents have become increasingly conscious of rising prices. As a result, this will have an impact on the health and wellness of their children. Parents will be cost-cutting on healthier products, which are often deemed more expensive. Brands must respond to this by expressing to consumers the value of their products. Rather than choosing the cheapest option, consumers are searching for products they deem good value for money. As a result, if brands can communicate value, consumers will be more likely to purchase during today’s cost of living crisis.

This article is based on FMCG Gurus: Early Life in the UK – Country Report 2023. For more information, please click here.

Foodservice: Healthy Eating, Sustainability and Rising Costs in 2022

The impact of Covid-19 saw considerable disruption to the foodservice industry. However, the market has been able to bounce back. For instance, 100% of consumers say that they have eaten food or drink from a restaurant or fast-food service outlet in the last six months. FMCG Gurus consumer insights found that almost 9 in 10 consumers have purchased food and drink from home delivery services, casual dining outlets or full-service restaurants in the last six months.

Healthy Eating

Healthy eating and 'good for you' consumer trends have prevailed in the foodservice industry. Consumers associate 'good for you' foods with free-from artificial ingredients, containing low to no sugar, and containing ‘good’ ingredients, like protein and fiber. FMCG Gurus consumer insights found that over half of consumers consider their eating and drinking habits as healthy or very healthy when visiting food service outlets. This saw an increase of 10% since 2020. This demonstrates the impact of Covid-19 on consumer behaviors towards health. Consumers wish to take preventive measures such as eating healthier to reduce their vulnerability to illness.

Interestingly, morning and mid-morning are when consumers would be more compelled to eat something healthy from a foodservice outlet. This time of day is when consumers are more motivated to eat well to fuel themselves for the day.

Functional Ingredients

Consumers seek out functional ingredients, such as protein when eating out of the home. Protein is attributed to aiding recovery and reducing hunger. FMCG Gurus consumer insights reveal that 70% of consumers find products containing protein as appealing. The top foods that consumers want with added protein, are products in the snack bar and breakfast food categories. Again, this demonstrates how healthier eating is prioritized in the morning.

In addition to consumers making efforts to eat healthier, an increasing number of consumers are turning to alternative diets. This includes veganism, vegetarianism and flexitarian diets. FMCG Gurus findings highlight a 10% decrease in meat eaters since 2020. Notably, 46% of vegans claim to be unsatisfied or very unsatisfied with the number of foodservice outlets that cater to their dietary requirements.

Sustainability

Linked to healthier eating is the trend of sustainability. Healthy foods are seen as more environmentally friendly and good for the planet. FMCG Gurus consumer insights have found that since 2020, there has been a 13% increase in the number of consumers valuing sustainability initiatives from brands or outlets. When asked what trends consumers would like to see, foodservice outlets incorporating environmental initiatives stood out. Some examples include avoiding food waste and recycling packaging. Nearly three quarters of consumers stated that they would like to see more sustainability initiatives from brands. Notably, nearly half of consumers state that they research the environmental and ethical policies of foodservice brands. This highlights the importance of these issues to the consumer.

The Cost-of-living Crisis

In 2022, 72% of consumers claim to be concerned about the rising cost of living in their country. This is reflected in their eating out habits. FMCG Gurus consumer insights found that 43% of consumers have reduced their spending at foodservice outlets over the last six months. Furthermore, the importance of price when purchasing in foodservice outlets has seen a 12% increase since 2020. As the cost-of-living crisis persists, consumers will place greater importance on price, along with reducing consumption while eating out. Over half of consumers state that they have made changes to their spending when eating out in the last six months. These changes include reducing the frequency of eating out of the home, looking for promotional offers and reducing spending by cutting back on starters and desserts.

This article is based on FMCG Gurus: Foodservice Survey Series in 2022.