THE NEW CONSUMER, HEALTH, AND RETAIL

TODAY’S CONSUMERS ARE MOVING TARGETS ON HEALTH

A quick online definition lookup of the word “health” returns the following: “The state of being free from illness or injury.” That may be accurate, but the reality is far more complex when 

it comes to consumers. Health often means different things to different people, varying by generation, income, and other demographics. Consumers often don’t agree on what kinds of foods or lifestyles will keep them well. Many are confused because of conflicting advice from a wide variety of sources. 

“Wellness” vs. “well-being”: Speaking of definitions, let’s take a look at wellness. The overall topic of health and wellness is gradually expanding into “health and well-being.” Wellness is still a highly relevant term and is used in many places throughout this report. However, well-being has a broader definition, including aspects such as emotional health, energy levels, and sleep behaviors. That is why the term “well-being” is used in this report’s title. Susie Ellis, chairman of Global Wellness Institute, said in an online post that wellness will be increasingly associated with health and prevention, whereas well-being will be linked to happiness. David Portalatin, vice president, industry advisor, The NPD Group, said in a blog piece that today’s consumers are focused on aspects ranging from physical to mental health. He added that consumers are “embracing a lifestyle centered on health and wellness and future well-being.”

New expectations from retail: Consumers look to food retail as an ally in supporting their health, and retailers have stepped up with impressive and exciting initiatives. However, even as they build a positive story, retailers face ongoing challenges in understanding the changing expectations of shoppers.

KEY REPORT INSIGHTS

• Moving target: Health and well-being is a dynamic topic at food retail today. Consumers are moving targets on their needs and perspectives. They have new wellness expectations from food retailers. This represents an opportunity for retailers to further advance their efforts to engage shoppers.
• Food as medicine: Consumers broadly eye food as “medicine” to boost health. However, the details play out differently by consumer demographics, including with different generations. So it’s crucial to avoid generalizations when interpreting consumer behaviors.
• Social benefits: It’s not only about the food itself. Consumers believe in the health and social benefits of eating meals at home with family. They also seek out meal attributes such as enjoyment and connection, which are wrapped up in the concept of “eating well.”
• Free-from and organic: Shoppers exhibit strong opinions about food labels, health, and transparency. They are embracing free-from products with simpler ingredients lists. They are moving along a path that is somewhere between “clean label” and “clear label.” Many consumers are drawn to organic, even if their reasons vary. Organic, in fact, is a bright spot for supermarkets, but other retail channels, including supercenters and club stores, are proving to be quite competitive in this segment as well.
• Transparency imperative: Consumers are increasing their requirements for transparency, both for ingredients within packages and information about sourcing, animal welfare, and other factors that go beyond ingredients. This will have big implications for how retailers connect with consumers in the future.
• Trust factor: Consumers trust their primary store as an ally in health. They also trust guidance from retail dietitians and other health professionals. Millennials in particular are advocates of retail private brands, and these brands are embracing free-from and organic strategies.
• Total-store wellness: Consumer feedback indicates that retailers have a big role to play in advancing total-store wellness strategies, both in bricks and mortar and online. Moreover, consumers look to specific store departments for different wellness solutions, from produce to center store to foodservice.
• Retailers step up: Retailers recognize the crucial importance of health and wellness to their businesses, and they’ve already made significant investments, from hiring health professionals to providing health-focused recipes and classes. However, there is more they can do, including digging deeper into consumers’ unmet needs and getting an early handle on the behaviors of younger generations.
• Advancing to the next level: Retailers can advance health and well-being by tailoring efforts to their individual customer bases. They should give special consideration to a range of strategies that have worked well across food retail. These include pursuing total-store wellness strategies, advancing consumer education, embracing local marketing, building health partnerships, and further enhancing consumer trust.

SHIFTING CONSUMER APPROACHES TO EATING AND SHOPPING 

A time traveller from decades ago probably would not recognize today’s shoppers. Consumer perspectives on wellness have changed dramatically, and the shifts continue. Food is now identified with a wider variety of health benefits and concerns. However, the story isn’t uniform because consumers range widely in their attitudes and behaviours, based on variables that include age and income level. 

TAKING STOCK OF HOW MUCH CONSUMERS HAVE CHANGED

Sometimes a good place to start is by looking back. Consumer perspectives on health and wellness have shifted dramatically in the past few decades. A good barometer of that change is FMI’s annual, comprehensive U.S. Grocery Shopper Trends report, which surveys consumers on their views each year. 

• 1980s-Economic focus: Consider that in 1981, health and wellness was not an emphasis of the report. Front and center for consumers were high food and gasoline prices, unemployment, economizing, and “consumer activism.”

• It wasn’t until 1983 that FMI even felt the need to include questions on consumer concerns about nutritional content and food safety.

• 1990s-Manufacturer claims: The 1990s was a decade when government focused more on nutrition labeling, and the Nutrition Facts panel was born. By 1990, Trends was exploring consumer perspectives on reading food labels and on statements manufacturers make about health benefits and risks associated with food products.

• Some of the findings might seem surprising today. For example, in 1990, younger shoppers were the ones most likely to believe manufacturer statements about health benefits and risks associated with food products, a scenario that doesn’t seem to ring true with today’s skeptical Millennials.

• By 1995, Trends was asking for the first time about awareness of biotechnology/genetic engineering, and the majority of consumers—65 percent—had heard little to nothing about this.

• 2000s and Beyond-Ingredients lists: According to research conducted by the Hartman Group, shopper perspectives in the first part of this century have shifted markedly over a 10-year period. In 2007, only 11 percent of consumers were looking for food and beverages with the shortest list of ingredients. That rose to 20 percent by 2017. Similarly, only 13 percent of consumers sought locally grown or produced foods in 2007, compared to 21 percent in 2017.1 Some consumers believe local indicates healthier or more sustainable products, but that is not necessarily the case. FMI Trends research showed an increasing consumer focus on nutritional content of foods between 2005 and 2010. Fat content often led the focus in the early years of this century. For example, in 2005, the top concerns, in order, were fat content, cholesterol, trans-fat, calories, chemical additives, and sugar/artificial sweeteners.

FOOD EYED AS “MEDICINE” TO BOOST HEALTH 

Consumers today increasingly look to specific foods for health benefits, against the backdrop of rising health care costs and a growing attention to self-care strategies. About two-thirds of shoppers view foods as “medicine for their body.” Range of benefits: Cardiovascular health ranks highest on the list of desired benefits from food, followed by weight loss/weight management, energy, brain function, and digestive health.

In addition, most consumers believe that fresh produce has positive health benefits:

• Many consumers identify produce as a category that supports health. About two-thirds of Americans believe fresh produce is a crucial part of a balanced diet.

• More than half closely link fresh produce to heart health, healthy weight, and essential nutrients in diet.

• Consumers hope to benefit by increasing fresh produce consumption across day parts, from dinner to snacks.

However, the awareness that food is linked to health only goes so far. About six in 10 consumers are unable to connect a top health issue to a food, indicating the need for increased education to reduce confusion.

DIFFERENT LENSES FOR DIFFERENT GENERATIONS 

• In assessing how consumers view health and wellness today, it’s important to consider how trends differ by generation. For example, a lot of comparisons are made between Baby Boomers, born between 1946 and the mid-1960s, and Millennials, born between the late 1970s and mid-1990s.

• Boomers are more likely than Millennials—51 percent to 36 percent—to look at calorie/nutrition icons and graphics.

• Boomers also more frequently check expiration dates, ingredients lists, and brand name.

• Younger adults, on the other hand, are more likely to embrace nontraditional attributes such as transparency about a product’s improving impact on the environment and humane treatment of animals.

• Younger adults show more trust than older consumers in technology-based sources

• of information about which foods to eat, which includes fitness apps, bloggers, and TV personalities.

It’s important to avoid generalizations about health and wellness that paint all generations with the same broad brush. It’s also useful to recognize that even as Millennials have exhibited some nontraditional views on health and wellness, many of their perspectives influence older consumers over time.

IDENTIFYING NEXT RETAIL OPPORTUNITIES 

No matter how comprehensively one looks at consumers, health, and well-being, the ultimate findings can only represent a snapshot, a point in time. That’s because consumers are moving so quickly on this topic. Nevertheless, it is possible to make highly educated guesses about future opportunities based on evidence to date. 

DETERMINING WHAT ELSE CONSUMERS WANT

What are the best ways for retailers to see where the wellness puck is headed? The best approach is staying attuned to shifting consumer desires. Consumers may not always be able to identify their unmet needs, but they can help provide clues to retailers. It helps to ask shoppers directly about how to better meet their wellness needs. Shoppers usually will respond honestly. For example, here are shopper verbatim comments about what they want for the meat category, based on responses in FMI’s Power of Meat report.

• “Carry a full line of healthy, organic, sustainably-raised meat/poultry and sustainably-caught wild (not farmed, ever) fish products all year round.”

• “Carry locally raised, free-range meat and poultry.”

• “Need healthier selections that are cook-ready or heat-and-eat.”

Another consumer-expressed need is a bigger variety of portion sizes, as with this comment: “Please remember that there are those of us out here who don’t have a ginormous family. We cook for one. We need healthy, nutritious options for us to prepare for ourselves. We are a very underserved demographic.”

These are useful comments that demonstrate the importance of asking consumers about unmet needs. 

PREPARING FOR MOVING TARGETS: GENERATION Z AND BEYOND

Figuring out consumer needs will not get any easier. Retailers have managed to gain insights into the behavior of Millennials, but they need to stay on top of changes as these younger consumers progress in life. Even as the industry better understands Millennials, retailers are now gearing up for the next consumer group, Gen Z, whose oldest members are now transitioning from college to the workforce. 

Many of the unique traits of Millennials will accelerate with Gen Z, such as the need for variety, the embrace of omnichannel and technology, the insistence on convenience, and the imperative for transparency.

In fact, this generation will put its own unique stamp on wellness. It’s just too early to know exactly what that will look like. The target for retailers will keep moving when it comes to consumer health needs. 

STEPS FOR ONGOING RETAILER COMMITMENTS

Retailers have made impressive strides, but it’s important to keep adapting solutions for a range of needs, including food safety, health and wellness, social good, and inspiration and discovery.

Retailer strategies need to be based on knowledge about individual markets and customer bases. That said, a number of strategies have been widely successful and are likely to grow in importance. FMI’S Best Practices and Excellence in Fresh Department Health & Wellness Programming34 is one of the many FMI reports that outline successful strategies. Here’s a brief look at some proven retailer strategies that will be useful as consumers continue to raise the bar on health and wellness. 

• Emphasize food as medicine: Consumers realize categories such as produce are healthy, but retailers can further educate shoppers on how specific items can address various disease states.

• Embrace transparency: Retailers should make efforts to satisfy consumer transparency needs, including through a digital transparency initiative such as SmartLabel®.

• Play up convenience: Consumers are embracing both convenience and health, so offering creative solutions to both needs can produce winning solutions. These could include, for example, “pre-seasoned meat, poultry and seafood, or pre-made kabobs with fresh vegetables.”

• Prioritize portions: Shoppers sometimes want to indulge in a department like bakery, but they also appreciate options for smaller portion sizes. Retailers can be an ally by offering a range of pack sizes.

• Promote local: Consumers are often interested in the sources of food and sometimes prefer items from local producers. Retailers should accommodate this need and explain how local is being defined in their marketing.

• Explore partnerships: There are many partnership opportunities to enhance retailer wellness efforts. A comprehensive list of partnership opportunities and resources appears in FMI’s Best Practices and Excellence in Fresh Department Health & Wellness Programming.

• Educate on food safety: It’s important to enhance food safety practices and education, from farm to fork. For example, the FoodKeeper app is a useful resource to provide guidance to consumers about using products at home. It includes information on shelf-life and handling. The resource was created through the work of FMI, Cornell University’s Department of Food Science, and the U.S. Department of Agriculture (USDA).

• Encourage Togetherness: Retailers can build on the existing consumer momentum for eating more meals together with family (whatever one’s definition of family). This can involve participating in The FMI Foundation’s National Family Meals Month™ campaign.

• Boost Private Brands: There’s a big opportunity for store brands to further embrace wellness trends. These brands already have a strong head start on the organic front, and they have gained the attention of Millennials.

• Enhance Trust: Shoppers already trust their primary store as an ally in health. Retailers have the opportunity to further advance that status, using a range of solutions that enhance the proposition of total store wellness.