July, 2007

Research Perspective and Comments & Analysis

Closing The Satisfaction Gap

The beauty of travel is how it opens one’s senses to different cultures. Having recently vacationed in Tuscany, I can still recall the flavors of that region’s cuisine. Yes, the great food was helped down with great Chianti. But it also stood on its own as a tribute to the role of food in doing far more than giving sustenance to life. The celebration of great flavors gave every meal a meaning and a memory.

This time isn’t the first and won’t be the last I write in this space about the critical role of better taste in driving more consumption of fresh fruits and vegetables. After all, the complex issue of improving the consistency of taste is simply too important — season after season, year after year.

So with Tuscany on my mind, I want to share a few new research insights while focusing attention on the satisfaction gap — the gap between how important taste is to our customers versus what they perceive they are receiving — between where our best customers would like us to be and where they say we are. This isn’t just research theory: I’m sure my good friend Jim can readily add specific examples of great marketers who already embody these best practices.

Our industry is in the enviable position of growing and selling foods that consumers are actually being told to eat more of, not less. Fruits and vegetables pack more health-promoting, disease-fighting, waistline-narrowing nutrients per serving than any other food group. And unlike many so-called health foods whose taste profile and appearance is as insignificant as their nutrient density, fruits and veggies also offer eye-catching, lip-smacking appeal — the kind that can make tongues smile. If only that were always our No. 1 goal.

Produce Marketing Association’s (PMA) latest consumer survey demonstrates how important taste and flavor are to produce consumers. Unfortunately, that research also indicates we are disappointing our customers — and missing an opportunity to grow our sales in the process. In late April, Opinion Dynamics Corporation surveyed 1,000 primary food shoppers by telephone for us. Their opinion is quite eye opening.

Of no surprise, the consumers we surveyed report they place a high degree of importance on the taste and flavor of their produce — this has been a consistent trend for years. Taste of fresh produce is “somewhat to extremely” important to 92+ percent of consumers. Taste and flavor also are critical drivers of where most consumers shop for produce, with 76 percent of shoppers surveyed reporting taste and flavor are “somewhat to very much” a factor in their choice of store.

When asked how important taste was compared to some other produce characteristics, our shoppers told us taste was more important than year-round availability. In other words, they don’t mind waiting for foods with inconsistent taste to be at their in-season best. That’s one reason why taste is clearly an important factor influencing purchases of locally grown produce. More than half (56 percent) of our survey participants report they buy locally grown because it is always fresher or better tasting. When pressed for their definition of locally grown, most define it as being from the local area or within their state.

When we asked which was the more important purchase factor, taste or health, we found a close race: 35 percent said health, 25 percent said taste, and 38 percent said the combination of taste and health influences their purchasing. This is the first time health has nudged out taste in our consumer surveys. In previous surveys, taste has been ranked a few percentage points ahead of health benefits.

It does seem we are largely disappointing our flavor-minded customers. The shoppers we surveyed report a low level of satisfaction with the taste and flavor of their produce, in marked contrast to how important they told us taste is to them. Only 25 percent report they are extremely satisfied with the taste and flavor of produce, while a larger 30 percent report only middle-of-the-road satisfaction. Lack of freshness and flavor are the reasons most often given by those respondents who told us they aren’t satisfied.

Why aren’t our customers more satisfied with the taste of their produce? Each of us could suggest several reasons. Criteria such as yield, shipability, shelf life, appearance, color or being first-to-market are just some that spring immediately to mind.

As it turns out, our customers appear to be willing to pay more for the good taste they crave, based on our latest survey. The satisfaction gap suggests that our industry has an opportunity to both market and deliver high-quality, good-tasting produce, and to get paid a premium for it.

Nearly 70 percent of our shoppers told us they would pay at least a little extra for better-tasting produce, and 10 percent are willing to pay a lot more. This research indicates taste is important to our customers, they don’t think their produce tastes as good as it should, and they are willing to pay more for fruits and vegetables that meet their taste expectations.

This is a clear road map to grow sales and increase margins, by delighting our customers. Doubters will say consumers always tell researchers they’ll pay more for better taste and quality but don’t behave that way. But look around the country and at market leaders worldwide and you’ll see companies closing the satisfaction gap and making more money doing it. Starbucks coffee, anyone?

No Standards For Taste

About 15 years ago, Produce Business did a major consumer focus group series that analyzed consumer attitudes toward taste. During a session in Los Angeles, one woman insisted she would shop only at Ralph’s as she knew they had the best-tasting produce. As the moderator, I asked her how she knew which retailer had the better-tasting produce. After hemming and hawing, she ’fessed up. She had a pet rabbit that rejected, so she claimed, vegetables from anyplace but Ralph’s!

Say what you will…at least this consumer had a way of ascertaining who sold better tasting produce — which is more than we can say about almost everyone else.

Although the issue of taste is often presented as a breeding problem, in which we have selected varieties for high yield and ease of transport — and there is truth in that — it is better thought of as a marketing problem.

We can accept that taste is “somewhat to extremely” important to 92+ percent of consumers and a factor in selecting a store — even that consumers would pay more for good taste. But then we realize this is an unactionable abstraction. How are consumers to ascertain which product tastes better? How are they to know which retailer sells better-tasting produce? On what basis could they decide to pay more for product A and not product B?

We have USDA grade standards for many items, but in not one is taste a criterion for earning a USDA grade; these standards can’t really help consumers select product by taste.

We have well-known consumer brands, but the criteria for branding rarely relate to flavor. Even where producers have proprietary varieties, most market proprietary and non-proprietary varieties. The consumer, who can’t rely on the brand or label for superior flavor, would have to be an expert on the individual variety of each produce item. Even with proprietary items, some marketers may imply better flavor or taste but few have done, and fewer still promote, any consumer research indicating their items do, in fact, taste better.

Most branded product operates under relative, not absolute, quality standards. After the recent freeze, Sunkist was the exception that proves the rule. Withdrawing its branded oranges until the new crop, it announced no oranges met the criteria to be branded Sunkist.

Sunkist is virtually the only company to have done this — and it took a catastrophic freeze to do so. Normally branded marketers relax quality standards if necessary to have product to sell. A good brand may sell relatively top quality product but varying standards mean consumers can’t rely on the brand.

Those brands that highlight flavor do so without making a clear commitment to the consumer. Some firms will mention that they offer “a more intense (fill in the produce item) flavor” — which sounds like puffery more than a commitment to the consumer.

Even when a specific measurement is used — such as a brix level — companies will promote that, on average, the brix level of their product is greater than standard industry product — a very bland warranty to consumers who don’t care about averages, especially when an entire season’s crop might be shipped below average if weather went wrong. Consumers want to know the item they are buying tastes good — a warranty shippers so far don’t seem to want to make.

Retailers are also involved, but the way most handle product makes them not very useful to the consumer buying for taste. Few supermarkets make the commitment to handle one brand of an item. For example, there are loads of mini-melons out there, with dramatic variance in flavor and taste. Yet it is common for retailers to switch brands based on price.

These products look the same but are genetically distinct. Even if a particular brand of melons was better tasting and even if the consumer knew it, in most cases the consumer could not count on that brand being at any particular store. Even a willingness to switch stores wouldn’t help, because the consumer wouldn’t know what store to switch to.

When the retailer does make a commitment to handle a better-tasting item, it is usually classified as a secondary item and marked up to an extent that dissuades consumers from buying it. In other words, the mainstream item is not replaced with the better-tasting item. Instead, the new item is relegated to small displays at premium prices.

There are plenty of issues regarding taste. Notably, how do we define flavor? On many fruits, brix level seems a reasonable proxy but what criteria do we use for broccoli? Locally grown being better tasting is unsubstantiated. Riper peaches or melons are better tasting, and picking later can lead to riper fruit. But we just have no evidence iceberg lettuce picked locally tastes better than that picked far away.

There is much retailers can do without perfect knowledge or total reform of the system: Don’t worry about being first to market; develop a reputation for selling only what meets a chain’s flavor tests. Most consumers will appreciate not buying items not yet ready.

Retailers can also treat items with respect. Items, such as apples, that require refrigeration need to be refrigerated and not put on dry tables so consumers buy mealy apples.

Ironically, the trade’s problems with food safety may yet contribute to a solution on the flavor front. Food safety and flavor depend on supply chain commitment to deliver that end result. As long as a retailer buys product from whomever is cheaper that day, the retailer can’t know if it is getting flavor or food safety.

At the other extreme, if the retailer has a completely aligned supply chain, it can arrange for planting of only the most flavorful varieties to be grown in the safest way.

What is clear is this: If consumers can’t identify what is the most flavorful produce by label or where it is sold, we will continue to disappoint our customers. That is discouraging, and unnecessary.