IRI Report Reveals Better-for-You CPG Products Spawn Growth in Recessionary Times

– Americans continue to have a love-hate relationship with building and maintaining healthy eating and living habits. The Centers for Disease Control reports that U.S. life expectancy has increased three years in just the past decade, but that over the last 30 years, the prevalence of obesity has tripled. And, despite nearly continuous news articles on the subject of exercise, only about one-third of Americans work out on most days. Among those concerned about chronic disease, the rate is even lower. So, how can consumer packaged goods (CPG) manufacturers possibly develop and market products against this seemingly endless set of contradictions? The latest IRI Times & Trends Report, “Health & Wellness: Redefining Healthy Living,” takes a new look at product development, marketing and merchandising tactics that will increase penetration of better-for-you food, beverage and beauty care products across households of all incomes and other demographics.

“During the past several years, marketing programs have effectively stimulated demand for healthier CPG solutions, but there is still a lot of opportunity for growth,” says IRI Shopper Marketing and Innovation President Thom Blischok. “For instance, retailers and manufacturers should consider leveraging the brand strength of existing national and private brand products and introduce brand extensions that feature healthier and/or organic ingredients. Kellogg’s instituted this approach with its Pop-Tarts brand, which now includes whole grains. And, Hostess has taken a slightly different approach by offering portion-controlled packages for several of its snack cakes.”

Innovative marketing efforts will also increase interest in better-for-you products and living habits. For example, to combat the significant number of consumers that are disenchanted with nutrition labels, Guiding Stars, an independent organization, has developed a simplified rating system based on the nutritional density of food products per 100 calories. Foods are rated on a point system, ranging from 0 stars (does not meet nutritional requirements to receive any star) to 3 (best nutritional value). The goal is to simplify and increase information about healthy products and do a better job of “telling the story” about these products and their nutritional benefits.

Savvy CPG marketers and retailers are also exploring merchandising opportunities. Use of displays or kiosks featuring better-for-you products, cross-selling healthier products on packages of “traditional” products and selectively reducing prices are examples of three successful strategies being employed today.

CPG retailers and manufacturers seeking to develop effective brand strategies in relation to consumer health and wellness trends should consider the following action items:

  • New Product Development: Invest to understand important wellness considerations across key consumer and target groups; re-evaluate store brands to identify opportunities for targeted line extension opportunities.
  • Marketing: Develop targeted marketing messages against high-potential segments, communicating specific health benefits linked to the ailment/condition/wellness goal.
  • Merchandising: Leverage shopper insights to assess shopping patterns of healthier brand buyers to identify optimal shelf placement, adjacencies and promotions.

“The world of CPG marketing is changing quickly,” adds Blischok. “As the economy continues to evolve, so to will CPG-related attitudes and behaviors. Today’s value and health-oriented environment provides opportunity for marketers to really connect with shoppers. Those forging solid relationships today will reap rewards long after the recession ends.”

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