What Do People Really Want?

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

Nobody handles consumer data better than dunnhumby, so when it lays out a case that producers and marketers ought to focus on core values, one should heed its findings. Yet one is reminded of French statesman Georges Clemenceau, who repeated the common expression that the voice of the people was the voice of God and added that it was the function of leaders to follow that voice “shrewdly.” In that one word, much cynicism and skepticism was packed.

For the industry, the challenge is how to reconcile the dunnhumby insights — “Natural Sweeteners, Responsibly Produced, Fermented Foods, Small Batch Goods, and Religious Standards,” etc. — with the fact that the fastest growing retailer in America is the deep discounter Aldi. How will the industry reconcile the idea that “produce consumers are interested in supporting the little guy” with the fact that the largest retailer is Wal-Mart?

Items such as soda, processed meat products, and frozen dinners are among the top items sold by supermarkets, so how are we to reconcile that factor with the consumer desire, as dunnhumby reports, to care about how their food is raised, to support small producers, and do something for the environment?

Part of the issue is that ascertaining consumer preferences, in the absence of price, poses odd issues. Capitalism is different than a democracy. Votes in a democracy tell us what people want, but votes in the marketplace are specifically designed to tell us what consumers want most.

Presumably, many people would, in the absence of price, prefer diamonds to cubic zirconias and Ferraris to Fords. When a consumer says, “Price is still a factor in my choice, but if I find these products [organic, natural, etc.] at prices that are not totally out of line with traditional grocery prices, then I will buy,” one is not certain what to make of it. A price that is “totally out of line” represents different thresholds for each person.

The USDA says organic sales account for less than 5 percent of food sales — and that is by dollars, not volume, which would be significantly less. It also includes a great deal of “accidental” organic purchases, which is when a retailer only stocks the organic item on low-volume SKUs to avoid having to procure and slot two items.

So, once again, when a consumer says, “I would not buy any of the above-mentioned products unless it also said ‘organic’ … otherwise, all those labels you are stating are meaningless,” how common could these sentiments possibly be?

Part of the problem is that none of these terms are value-neutral. There is a zeitgeist to the times, and asking consumers if they prefer “responsibly produced” is like asking if they favor helping blind old ladies cross the street. One can’t answer negatively without identifying oneself as a horrible person. Who precisely is in favor of “irresponsibly produced” food?

Many of these terms are so complicated that claiming affiliation with them is more an expression of an aesthetic preference than it is an explanation of what kind of food production one prefers.

Which is more responsible: a farm that hires foreign workers at higher pay than they could get at home, but still very little by U.S. standards; a farm that relocates to Mexico and pays even less than its American competitors do, but more than is common in Mexico; or a farm that invests heavily in automation and hires very few workers, but pays them much higher wages?

There is no possibility of a label that will explore this issue in any meaningful way. Indeed, it is unlikely that significant numbers of consumers are inclined or able to evaluate these issues even if websites and whatnot provide total transparency.

In this sense, the dunnhumby report simply gives guidance for marketers to position themselves so consumers of a product can feel good about being aligned with it. This is a wise reminder that consumers do consider more than the end product.

One suspects a lot of these things only impact purchase if there is a negative sentiment in the knowledge base of the consumer. In other words, it is hard to imagine how consumers would even know — much less that it would have much impact on purchasing — if a farm pays its workers 10 percent more. But a discovery that a farm illegally abuses its staff and withholds wages might lead people to boycott the products of that firm.

Many of the words used in this study have little real meaning. Local, for example, is not necessarily small-scale. And there are questions that presume consumers already have expectations for these “local” products, which could be defined differently by each individual: more flavorful, less expensive, or fresher condition.

We take the dunnhumby report, add to it feedback we get from retailers, and come up with this: Primarily consumers base their purchasing decisions on the same factors they always have: price, quality, variety, and convenience. As the world becomes more sophisticated, people want to present a face to their community, to their family, to themselves, of doing the right thing and of being on the right side. In today’s world, that means being a foodie, supporting local, being pro-environment, and in favor of good conditions for labor.

So it behooves producers to position themselves this way, but the emphasis must remain on efficient production of quality goods as most consumers are not prepared to pay a premium on sub-par goods to support this ethos — although they might pay a premium to avoid being associated with an egregious wrongdoer.