Just back in from last week’s Natural & Organic Products Europe event in London, Copenhagen-based strategic advisor in healthy and sustainable lifestyle, Karina Kaae Hermansen, has gathered up four key challenges that consumer brands need to be on to attract health and sustainability conscious consumers
1. Increased consumer health freedom and scrutiny
Today 75% of millennials use the internet as first point of contact to get information about healthy eating (Danish Agriculture & Food Council 2017). Radically new rules of information exist, contrary to our historical reliance of healthy eating advices from our government.
Craig Sams, organic food pioneer and founder of Green & Blacks Chocolate, thanks MAAFIA (Microsoft Apple Alphabet Facebook Instagram Amazon) for the access to massive amounts of information, increasing transparency and thereby creating profound implications for health freedom for the consumers. Consumers are left a choice to seek information, increasing their power and giving them freedom to challenge the norm. This gives the opportunity to break outdated eating patterns and even ways of perceiving medication. Call it a wholefood revolution, where consumers in the western world are starting to shift their eating patterns towards more wholesome food. We see a raise in selfcare where more people opt for food as first choice instead of medicine, hereby reducing the boundaries between food, supplements and medicine (Natural Products Global 2018).
As brand owner this creates massive transparency as well as scrutiny. It brings a need to go from reactive to proactive as the implications of lacking information can be large. However, with healthy eating as a global megatrend, consumers are looking for reliable, novel information and are you able to offer this, you have the opportunity to create a loyal following.
2. Consumer cynicism towards FMCG empires
Research shows that young consumers rebel hard against big brands according to Kenneth Fisher, American investment analyst (USA Today 2017). They are getting increasingly cynical towards large FMCG empires and from historically giving consumers a feeling of safety, large brands make young consumers alienated with their lack of transparency, their broad scale communication and longer adjustment time to their changing needs.
The Body Shop was last year sold off by L’Oréal as an example of a large FMCG company, that was no longer able to capture and deliver the true DNA of a grassroot originated brand. Instead of big brands, young consumers opt for handpicked, social media friendly, purpose-led brands with wellness-vibes.
As a big brand what to do? Nelson Peltz, billionaire FMCG investor, radically advocates for splitting into smaller business units to create niche brands. Alternatively, an acquisition strategy of funnelling small innovative brands into the portfolio is a way forward. This is what Unilever and Reckitt Benckiser has recognised the need to do.
3. Clean label and organic, also required for the big old brands
We are moving towards a future where cleaner labels and organic is moving into the mainstream, with Scandinavia and particularly Sweden leading the way. Old food brands recognised for their taste need to be cautious not to alienate their loyal fans, however, adapting to the future is required, as it will be shaped by the progressive young consumers of today who do not accept a list of ingredients, they can’t even pronounce. KitKat as an example has recently reduced the amount of sugar and added more cacao to its recipe to cater for the megatrend of healthy eating and reduce the number of calories, but it can be questioned whether it is ambitious enough not to offer an organic variant.
Last year, all Ben & Jerry’s ice creams were found to contain traces of the controversial herbicide glyphosate. Interest groups and scientists are raising awareness of the potential links between the herbicide and a number of diseases (New York times 2017). Ben & Jerry’s counterattack was to stay largely silent, but to communicate about a planned launch of an organic range.
“Going forward, I believe we will see a wave of consumer brands facing increasing scrutiny for their pesticide use as the awareness of the side-effects increases. As consumer brand, one way forward is to launch an organic version to offer the consumers a simple choice”
Philippe Grandjean, adjunct professor of environmental health at Harvard School of Public Health, advocates for stricter regulation to the use of pesticides as the damages to child brain development is still not recognised by the public society, regulation and industries. Going forward, I believe we will see a wave of consumer brands facing increasing scrutiny for their pesticide use as the awareness of the side-effects increases. As consumer brand, one way forward is to launch an organic version to offer the consumers a simple choice.
4. Alienation of the flexi-vegans, the future consumers
The pressure on the dairy and meat industries is increasing. The milk consumption in the USA has declined by 13% between 2011 and 2016 and 4% in Europe (Euromonitor International 2016). Simultaneously plant-based milk-alternatives are surging, with a 50% sales increase in the USA in the same period.
Arla recently launched a campaign with a fictional “milk without milk and nutrition” positioned as an ironic input to the health debate. Their campaign points towards, what I believe is a key challenge of the dairy and meat industries – that they are used to the traditional “box”-thinking of consumer segments, as either vegans or non-vegans. But according to Mintel 2016, 90% of the consumers who had drunk milk-alternatives had also drunk cow’s milk.
This is just the start of a trend, and in the future, we will see a large group of mainstream consumers across demographics being flexi-vegans and flexitarians. Consumption is becoming occasion-based and varies with food availability, mood and social group at the time of consumption. Consumers might fancy an oat-based latte from the coffeeshop, but a cheese platter for an indulgent family gathering.
Consumers will look for an integrated portfolio of choices of protein sources and milk(-alternatives) and will be alienated by the old box-thinking and stereotyping of their needs.
As a brand owner or retailer, the question is therefore, if you embrace the changing consumer needs with an integrated portfolio of choices and embracing communication, or if you non-intentionally alienate your future target group of flexi-vegans?