Global brands, local cultures: Brands in Motion 2018 food and beverages report
No consumer goods inspire such strong feelings as food and drink. That's what makes food and drink a standout sector in Brands in Motion, a global report from WE Communications and YouGov. Brands in Motion's food and beverage data shows a clear split between Western and Eastern market attitudes.
That in itself isn't surprising. After all, food is central to a sense of cultural identity. Deeply rooted cultural differences, therefore, offer both challenges and opportunities to brands operating in this highly commoditised and extremely mature market, but understanding how those differences shape customer attitudes is key.
A change of flavours: East vs West
Brands in Motion surveyed food and beverage in five markets: the UK, US, China, India and Australia. The category covers all food and drink bought from all restaurants, grocery and convenience stores, coffee shops, bars and pubs. This also includes pre-packaged food and snacks plus all soft and alcoholic drinks.
This wide-ranging definition results in a high intent to purchase across all markets, with nearly 50% of the 2,232 of respondents across the US, UK and Australia, planning to purchase over the next year. It i’s at 58% in China, although it drops off to 50% in India.
Brands in Motion found that US and UK consumers have significantly stronger than average rational responses to food and drink beverage brands, as well as stronger than average emotional responses and high expectations around innovation in the category.
In China, India and Australia, this category drew lower than average emotional and rational scores. In China and India, these lower scores spring from the differences in their attitudes towards food and cooking in general. Consumers are more likely to cook from scratch, so shopping habits skew to ingredients toward raw materials rather than prepackaged and branded foods.
Over in the UK and US, consumers are highly engaged with food and beverage brands, and over 50% of respondents in both markets believing brands in this category are cutting edge. This is reflected in love for the brands, which is at 55% in the US and 54% in the UK.
In China, it is a completely different story; 60% of respondents slammed food and beverage brands for being stuck in the Stone Age - 57% of Australians and 52% of Indian consumers surveyed agreed. Consumers aren't feeling the love either, with over half of respondents across the Eastern hemisphere claiming to hate brands.
Role of tech and innovation in food and drinks sector
In the UK and the US, where disruptors are remaking the food and beverage industry, brands need to harness their forward motion. Challenger brands, like Whole Foods, Amazon’s stand to gain ground, and trends ranging from health and wellness, to the demand for greater transparency around provenance mean that brands need to change how they communicate to consumers.
Ruth Allchurch, UK managing director at WE Communications, says the challenger brands are in a strong position to take advantage of the excitement around the food and beverage category in the UK. “The challenge for the traditional brands has been getting innovation to market. It can take up to two years. [The challenger brands] are more nimble and are able to make decisions more quickly.”
The excitement and interest in the sector and it brands should not be mistaken for loyalty, however. Steve Axe, group chief marketing director, of Nomad Foods (which owns Birds Eye and Aunt Bessie’s amongst other brands) does not believe loyalty in this sector exists. “It depends on the category, but I think customers have a repertoire of three to five brands they switch between.”
He adds that price and promotion can still make a difference, but brands need to have a strong point of view to be chosen at all. “Twenty-five years ago, brand positioning was about speaking to a particular consumer, now brands needs to speak to as many people as possible.”
For Ian McLearnon, international director of travel retail for Europe and America for Remy Cointreau, brand positioning is now about relevance and having a value, both functional and emotion, for customers. “Purely being different from your competition is no longer relevant,” he says.
This is just as true for brands in China and India where 53% of respondents said they had no need for food and beverage brands. In countries where eating is entwined with beliefs about family and, in India, religion, it is essential for global brands to better understand what consumers actually want.
“Brands need to be authentic and not talk at consumers to try and change their views,” says McLearnon. “Listening is a core competence for successful brands today.”
Brands also need to look beyond the boundaries of their own sector to see how other categories are innovating. “China is much more digitally aware than Europe and the Americas,” explains McLearnon. “Consumer expectations are faster and very different from the West. It’s a great opportunity [for brands] to work on their positioning from the ground up.”
Global environmental forces drive polarised perceptions
There’s one alarming similarity between Eastern and Western markets, however: the belief that food and drink companies are harming society. This is most likely driven by concerns around environmental issue such as plastic pollution and farming practices.
Over 50% of respondents in all markets believe [food and beverage] brands do harm, rising to 59% in Australia. Plastic pollution, farming practices, and unethical sourcing may be driving this strong response. Interestingly 66% of Australian respondents also cite executive behaviour as a strong influence on brand choice.
British grocery retailer Iceland is taking a lead on this issue. In January, it announced plans to eliminate plastic from its own branded products, and, in December, it released an advert to raise awareness of the deforestation caused by palm oil. Iceland struck a chord with consumers, but the Advertising Standards Authority stopped the advert from airing.
The moment generated positive press for Iceland, but, if the retailer truly wants to take a stand, according to WE’s Allchurch, it could have gone further and refused to stock brands that use uncertified palm oil. Consumers today are too sophisticated for half measures.
With nearly 70% of respondents happy to shame food and drink brands if they feel step out of line, brands must live up to the values they set. “Corporate social responsibility needs to sit at the heart of your brand,” warns McLearnon, otherwise food and beverage brands, like any other category, will not be immune to changing consumer sentiments.
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