The onset of the global economic downturn coincided with rapidly rising food price inflation, putting food spending in the spotlight and encouraging many consumers to re-evaluate their shopping habits.
Latest research in to premium & value own label food shows how value own-label foods have benefited the most in the downturn in terms of consumer switching between various own-label and branded categories. As many as two in five people now buy more value own-label food. This trend has propelled value own-label into the mass market, now bought by nearly three in four people. Today an equal number buy premium own-label, and 55% buy both, underlining the shift in shopper mentality towards investing in important areas and saving in others.
In terms of value, estimated to have reached £34.4 billion in 2009, the own-label food and drink market posted growth of 21% over 2004-09, and 3.6% against 2008.
Annual food price inflation peaked in August 2008, falling to around 1% in late 2009. Many grocery staples were strongly affected, putting food prices in the spotlight, and encouraging trading down.
Attitudes towards brands and own-label changed during the recession, with brands losing some of their perceived superiority as consumers have looked increasingly for tangible value for money.
In terms of consumer activity in the coming month, this latest research highlights how it will be vital for brand owners to provide consumers with reminders and tangible reasons to return to their store, as only 4% of people plan to buy less own-label once the economy recovers.
The exception to the rule and a large potential target group for brands, some five million 16-24-year-olds do not plan to keep buying the same amount of own-labels once the economy improves.
Seven million adults see premium own-label as a small treat, but unsuitable for special occasions, making this group an attractive target for products pitched above premium own-label food.
The ready meals market is almost devoid of brand presence. Top-end branded products could target the 15 million adults who currently buy premium own-label.
Premium foods tailored for over 55-year-olds could tap into a loyal pool of 7.6 million over-55s who currently buy premium own-label food.
Products offering a momentary escape from the recession through small treats and luxuries that don’t break the bank stand to attract the 17million people just making ends meet.