Can Consumer Preferences Be Changed?

By Jim Prevor, Editor-in-Chief, Produce Business

In the season of F. Scott Fitzgerald and The Great Gatsby, one remembers the apocryphal conversation Ernest Hemingway claimed to have had with his friend:

Fitzgerald: The rich are different than you and me.

Hemingway: Yes, they have more money.

Now, the Nielsen Perishables Group tells us that there are other differences as well, such as affluent people purchasing more, and different types, of fresh products.

One of the most significant changes in retailing has come from the use of UPC data to better understand the customer. Retailers once assumed that their “best” customers were the biggest customers. It was, after all, hard to get data much beyond the total ring. With more data came the opportunity to see that the highest volume customers were often from large families and were economically strained.

Those large baskets were driven by items on sale, the use of coupons, and a focus on lower margin merchandise.  The shoppers of these larger baskets often were both aware of prices and driven by the economy. The big buyers had a lot of dollars and a relatively high percentage of income at stake, so they studied ads, cherry-picked and shopped competitive outlets. It turned out these shoppers often bought a lot of stuff but the contribution to profitability was minimal.

It gradually became obvious that the “best customer” might need another definition entirely. A high-income urban bachelor wasn’t going to buy the copious amounts of paper goods and cheap hot dogs on sale that the largest volume customers were buying. Instead, he ran in on the way home from work to pick up expensive prepared foods and bought premium beer and wine. He stocked his house with pricey olive oil and balsamic vinegar, and he didn’t hesitate to buy raspberries — regardless of cost. In fact, he wasn’t very aware of prices, didn’t check ads, use coupons or shop anywhere other than the convenient place near his home or office.

This study by the Nielsen Perishables Group provides an important additional perspective for both retailers and marketers to assess business opportunities. Why do certain people buy differently, and is there anything that can be done to change these habits? If so, what can be done?

For retailers, this is interesting, and retailers certainly would like to switch consumers to higher margin products. It is also in retailers’ interests to encourage consumption of fresh. After all, fresh produce requires frequent replenishment, which translates into more frequent consumer visits, which gives retailers more opportunities to sell more products.

Yet, in the end, the big win from this kind of focus is with marketers. After all, the study doesn’t show that Enthusiasts eat more than Elusives — it just points to differences in purchasing preferences. Changing those preferences switches a retailer’s sales around, but switching consumer purchases around — from products a given marketer doesn’t sell to one the marketer does sell — is the point of most marketers’ efforts.

So why are Enthusiasts and Elusives different? Well, the obvious call is affluence. Products such as specialty cheese, seafood, fresh-cut salad mixes and berries all are on the pricey end of the spectrum. Beyond the actual price of the product, fresh produce always carries a financial risk. If a family buys frozen or canned spinach, and then things come up, and these items aren’t consumed, the consumption is deferred. Fresh meat can also be brought home and frozen. But that bag of fresh spinach, if not consumed, is money lost.

If the family is affluent, it is a small risk for a small expense, but if a family is living paycheck to paycheck, with every dollar budgeted out, it is a risk they may not want to take. It is also true that convenience produce items suffer because economical replacements are so accessible and obvious. So consumers can easily compare the price differential between bagged salad and head lettuce, and one doesn’t have to be a great chef to cut vegetables. In contrast, it is a big job to make one’s own sausage, and it is beyond the time and experience of many consumers.

There is, however, more than money involved in these statistics. There is a cultural gap. One wonders if a study has ever been done on how eating habits change in America when affluent families see their incomes go down. In desperation, people may eat anything to stay alive, but in less extreme situations, we would be surprised if the contours found in this study don’t stay the same. One culture finds it acceptable to serve bologna sandwiches and one does not. One culture is predisposed to eat meat and another to seafood and to produce.

The opportunities presented are many, and Kelli Beckel is right to point to things such as bagged salads as possible leverage points to increase consumption. However, the health and convenience messaging most common among produce marketers probably won’t do the trick for the same reasons it has never done the trick. The Elusives are likely to see appeals to convenience as self-indulgent, and the appeals to health won’t be sufficient to overcome cultural practices and budgetary concerns. So the challenge is to reposition produce with greater relevance to blue-collar concerns. How to do that is, well, to steal a line from Churchill: “A riddle, wrapped in a mystery, inside an enigma….”