Healthy Versus “Healthy”

The New York Times recently released an article detailing the differences between what nutritionists think is healthy versus what the general public believes is better for you. While a difference between the public and nutritionists is to be expected, NYT discovered quite a disparity in ranking within each group as well. Certain foods obviously ranked high (e.g. kale, chicken, oranges) and others were solidly in the low camp (e.g. chocolate chip cookies, white bread). The most interesting, however, are the foods that divided the public and nutritionists and just how those perceptions came to be.

Overwhelmingly, granola bars were the food that most divided the public from expert opinions, with 71% of consumer ranking them as “healthy” versus 28% of nutritionists. Granola, too, fell into a similar disparity, with 80% of the public ranking it has healthy versus 47% of experts. On the opposite side, 89% of nutritionists ranked quinoa as “healthy” while only 58% of the public agreed. So, where do these divisions come from?

On the quinoa side, it is probably safe to say that as an upcoming “superfood,” there is a large percent of the population that is still unfamiliar with the product (or stopped trying after being unable to figure out how to pronounce it).  Granola and granola bars, however, have been a “healthy” snack that has been popular for years and continues to find itself a staple in many American pantries.  Being that what is “healthy” and what is not flip-flops on nearly a daily basis, it is safe to say that marketing plays a considerable role in these public perceptions.  And by what we’re seeing here with public opinion, it’s working.

As a market research firm, REAL Insight is well versed in what cues “healthy” to a consumer and what will lead them to think the opposite. There is certain language and positioning that paints products in the perfect light that assures shoppers feel that what they are purchasing is good for them. Granola bars are a good example of a product that highlights the right qualities to appeal to its target audience.

While one could criticize the health halo that granola has granted itself, there is a second, perhaps more important takeaway from this survey. There are healthy and nutritional items that the public can purchase and consume. However, without cues as to how these items will benefit the consumer or assuage a need, their chances of going into the cart are slim. Where a box of granola bars will have claims leaping off the package about its benefits, a bulk bag of quinoa never will. Though as of today, only 58% of the public see quinoa as healthy, time (and marketing) will tell how that perception may change.

-Sarah Morrison, Communication Strategist & Mary Dolan O’Brien, Project Coordinator

Saving Cereal

Sales in the cereal category have fallen, and companies are trying to gain intuition around how to hold onto their current consumers and bring back some of those they have lost. In general, people are eating breakfast differently. They’re saving the first meal of the day for work or are reaching for yogurt, breakfast sandwiches, or bars. But for Milliennials, the access to variety isn’t what is changing their breakfast habits. The need for convenience may be what is preventing them from eating cereal for breakfast. For Millennials, it seems that washing a bowl is too much work.

So, is this attitude truly born out of laziness and, if so, where does it come from? Roberto A. Ferdman suggests that this mindset is more the result of the inherent busyness of households with two working adults.  Fuller family schedules allow for less time to cook and clean. Even more so, when most of these adults were expected to do chores as a child, only 28% of them ask the same of their children. Rather than changing their lifestyles to fit their food choices, Millennials are looking for foods that fit their lifestyles. With this in mind, focusing on convenience will be important, especially for industries like cereal that are trying to adjust to the changing times.

However, as companies address rising trends and falling sales, it is important to keep the “why” at the forefront when reinventing, revitalizing, or creating products.  When crafting solutions, it is imperative to first understand the root of the problem.  For instance, are Millennials too lazy to wash a dirty bowl or are they transitioning to other options due to health reasons, better benefits from other products, or something else? A product developed solely on the hypothesis that Millennials would use cereal if it was convenient might miss an opportunity to pivot on an alternate reason for the drop in usage. Companies need to understand this consumer mindset before launching new products and packaging; bringing consumer perspectives to life will help our clients to uncover the real needs of their consumers.

-Beth Wogen, Associate Project Director

Fat, Salt, and Sugar: Together Again.

Margarine is good. Margarine is bad. Diet soda is the key to weight loss. Diet soda will give you cancer. Fat free is the way to be. Fat is your friend. No sugar. Yes sugar, no high fructose corn syrup. Hooray for cane sugar!

Exhausted yet?

When it comes to defining what is “healthy,” the pendulum swings one way and then back again, leaving marketers and food executives frustrated as they try to figure out what consumers want and are willing to buy. In her article, “Foods Loaded With Sugar, Salt, and Fat? Bring It,” Stephanie Strom examines the latest public opinion around diet options. Ingredients that spent years on the blacklist are now back with a vengeance, IF their reemergence on the scene is in the right context. Examples of this include dark chocolate, jerky, and full fat ice cream. Foods that, in the not too distant past, were seen as unhealthy, are now back due to the increase in consumer demand stemming, in part, from new scientific studies that show fat, salt, and sugar are not black and white issues.

Food companies who spent years reducing or eliminating these three ingredients from their products must now dig up old recipes or re-position existing foods to meet new consumer ideas of what constitutes “healthy.” Jerky is capitalizing on the protein trend and has achieved great success as the protein content and “real food” benefits outweigh any fat or salt concern among consumers. Edy’s ice cream is bolstering their full fat varieties and making them with fewer ingredients, and shoppers are cheering all the way to the checkout counter. While the context of ingredients is key, the ingredients themselves (Are they familiar names? Can I pronounce them? Do I know what the ingredients are?) and the taste of the final product are just as important.

Understanding consumer desire is not a new topic for market research. However, the return to full fat, salt, and real sugar is a signal that sometimes returning to the roots is more beneficial than constantly innovating what’s new and next. Innovation for the sake of innovation can lose sight of what’s most important: what the consumer is wanting. Instead of re-inventing the wheel, perhaps it is time to re-purpose it to align with consumer demand, thus allowing for the option of a whole category’s rejuvenation.

Posted By: Jessica Fisher, Project Director

Your Macaroni Isn’t What You Think It Is

In a surprising announcement, Kraft has revealed that their most loyal customers have been purchasing a new formula of the “Blue Box” macaroni and cheese they’ve loved for decades. The biggest revelation from this announcement? Barely anyone has noticed.

History has shown that when a new formula for a favorite product is unveiled, there’s often a backlash that may or may not be warranted (see: New Coke). When Kraft Heinz decided to remove the artificial preservatives and dyes from one of their top-selling products, they decided to keep it relatively quiet. They made a small announcement and shortly after, customers were complaining that “they thought the mac and cheese tasted different when, in reality, they were still eating the previous version.” So after that initial announcement, KH didn’t say anything further about the new formula’s roll-out.

The new formula has been on shelves since December, and unless a shopper has been diligent about reading labels, the change has gone unnoticed until now, with Kraft Heinz’s launch of a campaign announcing the change. Time will tell how consumers will react to this news as the change becomes better known, but as it stands, shoppers have been eating the new formula with no complaint.

What is so fascinating here is that while consumers are requesting less artificial ingredients in their foods, companies are concerned that these same shoppers won’t be satisfied with the new products. Just knowing that a formula is “new” is enough for consumers to project a different taste, texture, and eating experience onto a product that may not even be there. As CPG companies start to consider reformulating their products to include more natural ingredients, perhaps they will follow the macaroni and cheese model and keep quiet about it as consumers acclimate to the new product. Shoppers want to consume products that are better for them; it just might be even better if they don’t know about it.

-Sarah Morrison, Research Associate

Much Ado about Betty

When you think of baking, more likely than not, Betty Crocker comes to mind. A staple of the baking aisle for nearly 95 years, Betty has been a welcome member of many American homes. But now, in 2016 Betty Crocker is becoming more like a distant relative that visits for the holidays. These days, consumer mindsets are changing and, as a result, the US baking mix market is shrinking.

General Mills’ Betty Crocker, Pillsbury cope with baking slump

Consumers are becoming more conscious of what they are putting into their bodies and are turning to the perimeter of the grocery store. They are beginning to avoid the processed foods shelved in the center of the store, preferring to focus on what is fresh. In a world of diets, cleanses, and other fads, shoppers want fewer carbohydrates and sugars, which are the predominant ingredients in baking mixes.

So, what is General Mills going to do with Betty?  They’ve tried lowering prices to match the competition, but sales are still slow to grow. Last year, General Mills opted to sell Green Giant for similar reason—though Green Giant was not the same leader in vegetables that Betty Crocker is in baking mixes. CEO Ken Powell isn’t ready to go that route yet. The baking category still has the potential for growth, and sweet treats certainly haven’t gone out of style.

What we see here is that the changing consumer preference for perimeter products is clearly impacting the baking mix market. Despite having the best brands, largest market share and price concessions, sales of General Mills products are dropping. Eating habits are changing.  Even in the baking category—where brands are as familiar as family members—consumers are looking for quick and healthier food choices. Companies need to know their consumer and what appeals to them as they adjust product lines to keep up with ch-ch-ch-ch-changing  eating habits.

-Anne Hacker, Office Manager

Edited By: Sarah Morrison

Beneficial Beverages Bust Big Brand Barriers!

Choices in the beverage category have changed dramatically from Coke or Pepsi. Words like “natural energy,” “cold-pressed,” and “probiotic” are cropping up in every day drink conversation. It shouldn’t be surprising, then, that traditional beverages are losing ground to niche concepts. High sugar beverages, such as soda, are on the decline as better for you beverages move in to the category. These BFY beverages are heavy hitters with claims such as satiety, energy, and nutrition. This shift signals a change in shopper desire. Consumers want more than just refreshment; they want additional benefits. The challenge is for a beverage to give its functional claim mainstream/broad appeal in a competitive category.

One example of a beverage giant testing out the waters of BFY beverage claims is Gatorade’s announcement of an organic line. Organic purchasing behavior has been steadily increasing and Gatorade hopes their new line will be a way to reach those shoppers. Consumers increasingly demand organic products, but at the same time, lack clarity and understanding as to what organic means or what constitutes an organic product. A popular way of thinking is simply that organic means healthy. By launching this new line, Gatorade hopes to capitalize on this belief that their organic line will be a “healthier” version of their popular sports drink. With 71% of consumers wanting to avoid artificial flavors and colors, Gatorade (and its parent company PepsiCo), along with other traditional, artificial-friendly companies like Coca-Cola, will need to reformulate their products to buy in to this perception of being “healthier,” while still delivering on their iconic taste.

Keep in mind, however, that Gatorade’s entrance into a more health-focused sector is not a novel idea. Since its founding in 2012, ASPIRE Beverage Company has offered athletes a low-calorie and low-sugar sport drink alternative with no artificial colors, flavors or preservatives. Finding success largely through grassroots efforts, Aspire has utilized a marketing approach that involves the very athletes they wish to target. After turning down a national distribution offer from Target—at the risk of getting too big, too fast—Aspire opted to involve those using their products and have enlisted student athletes as brand ambassadors that raise product awareness across the United States. They plan to grow their brand organically and educate their consumers at the same time, rather than capitalize on a trend merely for a profit. Obviously, Aspire has the same goal as Gatorade—to sell more sport drinks—but ultimately, co-founder John Montague hopes to “solve the problem” of people “drinking junk in the name of sports.”

All these factors combine to create a very fascinating category, which has been experiencing explosive varietal growth in the last few years. As old school beverages decline, it will be curious to see how current trends (e.g. probiotics, natural energy sources) fit in corporate innovation; when niche market products experience such an increase in sales, how many eggs does one put in that basket moving forward? Are people buying that drink because they understand what a probiotic is and what, explicitly, that is going to do for their body? Is that shopper particular that her beverage exceeds 10 grams of protein exactly? Many micro trends move mainstream, but understanding the functional need or perceived benefit behind them may be more beneficial to big brands, rather than just copy-catting the niche products.

-Jessica Fisher, Project Director

Edited By: Sarah Morrison

Ch-ch-ch-ch-changes

Perimeter shopping is the latest and greatest trend in the grocery game, particularly for millennials. Consumers are eating more fresh produce and meats, and companies that have traditionally dominated the interior of the grocery store are looking for new ways to meet shoppers’ desires. The pace with which this trend has increased is fast and formidable; in his article, “Changing consumer tastes forcing companies like General Mills to change—fast,” Mike Hughlett describes how one large company is reshaping its practices to meet the desire for all things fresh and natural. General Mills started by cutting gluten and artificial colors and flavors from their cereals, but is this alone enough of a change? Will the introduction of several new Nature Valley products—that skew toward health—and a 25% sugar reduction from Yoplait be sufficient to re-capture the millennial?

This is a challenge because the millennial shopper has different food values than previous generations—47% of older millennials don’t trust large food manufacturers—and they rely heavily on the internet to inform their choices. Due to the unlimited accessibility to information, smaller brands, such as Chobani and Kind, have been able to reach out to consumers and build brand awareness without having to fork over funds for TV ad space. In response, General Mills has poured 25% of its media budget into online marketing and has continued expanding its organic and natural sales. The purchase of Annie’s last year was another move to stay relevant and appeal to the more natural/organic category. Pressure to do well throughout this changing demand comes from multiple sources, one being the presence of 3G Capital, which could be eyeing General Mills as a potential target.

Large companies have always faced the challenge of meeting new demands and trends of consumers. Due to the switching preference in grocery geography, General Mills (among other large food manufacturers) is faced with the task of keeping their products relevant and desirable to consumers. The best way to do this is through consumer-based research. What product changes/new product introductions will resonate with consumers and why? Who are these consumers and what appeals to them? In-store, in-context research is an on-point way to observe and interact with these shoppers to see what is working and what is not. As millennials become a larger part of the consumer spending base, companies will need to adjust their traditional viewpoints to point towards the up-and-coming generations. Moving forward, these questions will be essential for companies to answer, and the answers are possible with quality and experienced researchers.

-Sierra Dooley, Research Assistant

Edited By: Sarah Morrison

Müller and Missed Opportunities

Four to five years ago, PepsiCo and Müller partnered to take the US  yogurt category by storm.  Müller, the name in yogurt throughout much of Europe, was bringing their sidecar cup design across the pond and using PepsiCo’s US retail expertise to steal share from an already hostile and dynamically changing yogurt category. Fast forward to present day, and it’s clear that Müller yogurt never really took off; the yogurt lost much of its distribution, and the partnership with PepsiCo ultimately disbanded.  This is fascinating to me because it represents what we are seeing all over the marketplace: consumers aren’t buying the products that are pushed on them but, rather, are pulling from the options that satisfy them.

In the past, one of the largest hurdles for a successful launch was being able to gain distribution and get products on the shelf.  That has changed.  As consumers become more open to, and at times prefer, smaller brands, retailers have started to stock those more on their shelves. They are seeking food that is perceived as “real” and more “natural” and, let’s be honest, Müller looked like a yogurt from a large company. It lacked the simplicity and health cues that yogurts such as Chobani, Noosa, and Fage have made both trendy and successful. It lacked the health equities to compete in such an on-trend and health-driven category.

Müller didn’t come up short in the US because it failed to introduce something new to the marketplace. It came up short because it didn’t understand the consumer desires in the category and failed to combine their features with the desired benefits. Chobani ran with the sidecar cup and introduced their Flips line, which more closely aligned with the “natural” equities consumers were seeking. Noosa offered a taste-first fruit option that better appealed to what shoppers were looking for. These companies took what Müller was offering and simply did a better job and are succeeding as a result.

What, now, is the implication for big businesses?  Competitive intelligence isn’t as important as consumer intelligence in today’s climate.  Instead of focusing just on the brands and companies next to you, it is critical to look at where demand is heading and to get there first. In trend-forward categories like yogurt, complacency will be costly.

-Luke Cahill, Managing Principal

Perceiving is Believing

When it comes to product ingredients, thinking about how consumers perceive them can be more beneficial than solely focusing on “proven” health benefits. In his article Identifying Health Ingredients, Keith Nunes discusses how Canadean, a market research company, conducted a global survey asking consumers to evaluate 100 common ingredients. Respondents were asked to rank ingredients –including grains, fruits, vitamins, minerals, and sweeteners—based on their perceived benefits. In the United States, whole grains, blueberries, green tea, almonds, garlic, olive oil, brown rice, potassium, pomegranate, and Greek yogurt encompassed the top ten. Canadean speculated that Americans ranked whole grains first due to the positioning and language used to talk about them. Potassium ranked high in the US, but not in other countries, which the article attributes to the language used around coconut water in particular. Looking to the future of trending “healthy” ingredients, matcha was noted to be an upcoming potential fad. Matcha, a powdered version of green tea leaves, claims strong health benefits but is relatively unknown by most consumers at this point. As with any new ingredient trend, if consumers’ knowledge around this ingredient is low, then products containing it will have a lower perceived health benefit than the product may actually deliver.

As ingredient decks change and the desire for food transparency grows, it will be important to understand what ingredients consumers perceive as healthier and which are worth the added cost.  While the survey mentioned in this article is interesting, it lacks the essential component of why? Why do consumers perceive these ingredients as healthier than others? Why do the benefits of some ingredients seem apparent while others are more confusing? While the results are a good starting point, without answering the “whys,” companies are left with educated assumptions instead of the complete picture. For example, although green tea was ranked highly, it is not clear what benefit it communicates to consumers.  By answering why consumers see green tea as healthy, a company will have a much better foothold regarding if/how to implement these products.

Qualitative research is important because it helps to answer the “why?” and fills in the complete picture of consumer perceptions and desires. In providing these “whys”, companies are then able to make informed, strategic changes to their products/packaging that best communicate their benefits. It also allows for strategic cost/benefit analysis of adding newer or trending ingredients (i.e. are consumers willing to pay more for certain ingredients due to their perceived health benefits?). Having a conversation with consumers about products on shelf builds intuition about their current brands and products. That conversation is also essential in teasing out consumers’ perceptions, and, most importantly, fills in the “why?” behind those perceptions.

-Beth Wogen, Research Associate/Bilingual Coordinator

More Protein, Mightier Beer?

Mighty Squirrel Brewing company has developed a high-protein (at 5 grams) beer and is expanding distribution within the U.S.  As a fan of the exploding craft beer scene—especially with our office being surrounded by so many breweries in NE Minneapolis—and as someone who has tested more protein-oriented products than one can imagine, this seemed like an interesting case-study to explore further.

The founders of Mighty Squirrel found their inspiration from post-tennis beer drinking that was a regular occurrence for them.  Like other protein seekers, they wanted something that would refuel them post-workout and keep them fuller for longer, a benefit that is far from the full-flavor (and buzz) that most craft beer seekers are looking for.  For the health conscious, beer, especially a craft beer, is likely perceived as an indulgence or cheat; they work out so they can afford to reward themselves with their preferred beer options. Will a high protein beer impact their system if it doesn’t deliver on the flavor reward they initially sought? As a researcher, I appreciate that the idea comes from a perceived need, but I have to wonder if this merger of protein and craft beer trends is truly delivering on a meaningful benefit.

Branding also plays a role due to the seemingly growing preference for smaller breweries.  Would this product be perceived as more of a gimmick if branded as Budweiser/Miller/Coors instead of as a small start-up offering? Regardless, preference for a small brewer will not be enough of a benefit on its own right due to the pervasiveness of small breweries in most markets and readily available craft beers, be they regionally or nationally distributed.

An interesting parallel beer product that didn’t last long was Budweiser Extra (aka “B to the E”), a caffeine and ginseng infused fruity beer introduced a little over a decade ago.  With the rise in popularity of energy drinks, adding the caffeine bump to beer seemed like a no-brainer. However, Budweiser chose to include the lingering fruity flavor found in energy drinks as well, which was found to be off-putting to traditional beer drinkers. The eventual product failure suggests to me that taste is a critical piece in the beer equation, and it cannot be sacrificed for other benefits.  While big name beer brand names were not the kiss of death back in 2004 the way they are now, even then a reputable brand was not enough of a driving force to maintain success.

Since I haven’t had the chance to have any conversations with Mighty Squirrel drinkers, I don’t have a clear sense for whether it will share Budweiser Extra’s fate. Perhaps the involvement of a craft brewery will help to keep the focus on taste first and protein second. If not, I won’t be surprised if this is a beer that doesn’t survive past the initial curiosity-driven trial phase.

-Luke Cahill, Managing Principal