Ingredient forces 2002 Part I: Opportunities and Trends

Dairy Foods, Jan, 2002 by Donna Berry

Editor's Note: The tragedies of September 11 have forever changed the way today's adult population works, plays and eats. Yes, eats.

For those directly involved in food manufacturing, there is comfort in knowing everyone must eat, so business will go on. But where we eat and what we eat has changed. The events of September 11 have impacted food consumption trends, and manufacturers must respond in order to survive.

The most apparent observation, is that in contrast to the past decade, we are spending less money on away-from-home eating. Call it an impact of the recession, or a wake-up call to the importance of spending time at home with the family, but dining out has become a luxury for most Americans instead of ha bit three to four times a week. This means convenience and value from foods purchased at the grocery store is extremely important. And perhaps surprisingly, indulgence lives on. If parents opt to bake pizza at home on Saturday night rather than taking the family to a pizza joint, there's a good chance those pizzas will be a premium, frozen brand or fresh from the deli counter. In addition, a pint or two of superpremium ice cream might be added so the kids don't feel they're missing out. Even in the worst economic times, consumers will splurge on indulgent foods to compensate themselves for the other sacrifices they are making.

September 11 has placed new emphasis on the value of life. As a result, our desire to live life to its fullest has us on a dietary and lifestyle quest for wellness and well being. Today's ingredient marketplace provides manufacturers with many of the tools to meet this consumer need.

These are challenging times for all. To ease some of your company's product development burdens, Dairy Foods brings to you Ingredient Focus 2002 in two parts. This month the focus is on actual ingredient opportunities and trends. What's new and what's available to develop foods that the new consumer wants and needs. The February issues features part two, which focuses on the results of an exclusive survey conducted of R&D professionals by Dairy Foods' research department. Learn how the overall dairy industry manages product development and how your operation can improve its model.

The U.S. dairy industry is stronger than ever before. We must eat, therefore, we must move forward.

For many of the country's leading food manufacturers, it is back to square one when it comes to knowing what makes consumers tick. According to Chicago Tribune Marketing Columnist Jim Kirk, "From shopping patterns and career choices to the emphasis given to family life, the shifts could not have been predicted before September 11," he wrote in his Nov. 11, 2001 column. "Those millions of dollars spent on consumer research in recent years by companies eager to target their product offerings? In many sectors, it's out the window, marketing executives are saying today."

Julie Danis, dir. of mind and mood [R] with Chicago ad agency Foote, Cone & Belding, says that people are choosing activities and foods that are comforting. "If going to the movies gives consumers a warm feeling inside, they are going to see more movies. If eating ice cream does the trick, well, they're going to eat more of it."

Foote, Cone & Belding recently surveyed 3,000 U.S. adult consumers and found that about one-third are spending less now than the month before the September 11 terrorist attacks. Specifically when it comes to food spending, the survey indicates that 35% of consumers are spending less on fast food and 33% are spending less on casual dining.

But we know consumers must eat, so, it only makes sense that they are spending more at the grocery store, and most likely, buying more comfort food. Fortunately for the dairy industry, dairy foods just happen to be some of the most comforting around.

"Of those surveyed, 56% say they feel more comfortable buying brands they know, brands they can count on," Danis says. "There is a real opportunity for dependable brands to become heroes at this time."

Qualitative input from the survey indicates consumers are looking for brands that offer family values, American values and nostalgic/traditional values. "Consumers are eating more of the cookies they always ate as a kid...and they're dunking them in milk, just like when they were a kid," she adds.

The food trends of convenience and health, which were apparent before September 11, will continue to grow in strength simply because their need is now even greater. By no means are we eating out less because September 11 added an extra hour to each day. In fact, many adults are working longer and harder then ever before because of the economic downturn and uncertainty. Consumers are time pressed, and they need all the short cuts that food manufacturers can provide when it's time to feed the family. When it comes to food choices, consumers are looking for value-added nutrition, with a touch of indulgence. Feed the family well and have them enjoy it at the same time.

"The survey indicates that we are not cooking any more after September 11, even though we are eating out less," Danis says. "Hence, we are using more convenience foods.