Food Retail Study Determines Transparency Yields Greater Brand Loyalty

ARLINGTON, Va. and CHICAGO, Sept. 18, 2018 /PRNewswire/ -- A new report released today from Label Insight and Food Marketing Institute (FMI) revealed that grocery shoppers exhibit loyalty to those products that create deeper relationships through information exchange. The Transparency Imperative report found that shoppers increasingly demand transparency and a closer connection to their food, so much so that 75 percent are more likely to switch to a brand that provides more in-depth product information, beyond what's provided on the physical label. When shoppers were asked the same question in 2016 in a similar study by Label Insight, just 39 percent agreed they would switch brands.

FMI, with support from Label Insight, developed this report with the goal of defining what transparency means to shoppers and how it impacts their food retail purchases. The Transparency Imperative further delves into attitudes and behaviors among health-conscious shoppers, those who are digitally engaged, and reveals how consumers respond across generations. Recognizing these consumer audiences, the report recommends the necessary steps brands should consider to further embrace transparency; relay information beyond just ingredients; understand the specific needs of key shopper groups; meet the increased expectations of online shoppers; and track changing consumer preferences as this trend progresses.

In the report, 86 percent of shoppers agreed that if food manufacturers or retailers provided access to complete and easy to understand definitions for all the ingredients, it would result in more trust. Nearly as many shoppers (80 percent) said that they are more likely to be loyal to a brand that provides more in-depth information, beyond what is provided on the physical label. More than half of shoppers (54 percent) are even willing to pay more for a product that has additional product information.

"The new shopper mindset requires brand owners to think about their products well beyond the traditional label and respect a more digitally-minded consumer," FMI Vice President, Industry Relations, Doug Baker noted. "The study offers several considerations for how to make the best use of these findings, but overall, they require companies to recognize and communicate the importance of transparency and perform a thorough review of their unique consumer audiences and commerce channels."

What is Transparency?
The vast majority of consumers (69 percent) say it is extremely important or important that brands and manufacturers provide detailed information such as what is in their food and how it is made. Interestingly, online shoppers (80 percent), college graduates (76 percent) and higher grocery spenders – $125+/week (75 percent) – were more likely to agree with this sentiment.

When asked to further define what elements define transparency, older generations (Baby Boomers and Generation X) are more likely than Millennials to focus on a complete list of ingredients, ingredients descriptions, and nutritional Information.  Millennials also focus on these indicators, but they are more likely than older generations to look at allergen information, certifications and claims, explanations of ingredient usage information, and other details such as animal welfare, fair trade and labor practices. 

"We titled this report The Transparency Imperative because as we executed the research to bring the key findings of our 2016 studies current, we see clearly that transparency is only becoming more important to consumers," said Patrick Moorhead, Chief Marketing Officer for Label Insight. "Their attitudes and preferences, particularly with the growth of e-commerce, make it clear that transparency is critical to growth and our industry must take action."

Meet the Health-Conscious Shopper
Nearly half (47 percent) of American households have someone on a diet or following a health-related program. These shoppers are even more likely to place a premium on transparency – 61 percent will pay more for products that offer in-depth product information, versus 54 percent of general shoppers. When a label is not sufficient, these shoppers (89 percent) are very likely to seek out information elsewhere. Nearly half of this segment (47 percent) would be very likely to use a smartphone in-store to find additional information beyond what's available on the label and the shelf.

The study also found that the presence of children in the home increased the desire for transparency. Shoppers with children are more likely to place greater importance on ingredient information, nutrition and health benefits. They were also particularly likely to find value in accessing detailed product information in-store on their smartphone (87 percent) and to use this method (85 percent).

Grocery E-commerce Increases Transparency Expectations
The study found that 26 percent of shoppers purchased groceries online in the last 30 days. Yet this group represents a valuable demographic – they are more educated, have higher household incomes and more likely to have children under the age of 18. While Millennials are disproportionately shopping online, they only make up 39 percent of online shoppers. Generation X (30 percent) and Baby Boomers (23 percent) also represent a significant portion.

Online grocery shoppers expect more product information (76 percent) when shopping online than if they were in a physical store; and 72 percent believe that getting product information is even more important when shopping online. Additionally, 81 percent are willing to switch to a brand that provides more in-depth product information, compared to 75 percent of general shoppers.

Methodology
This research is based on an online survey of a random sample of 2,022 U.S. grocery shoppers who are 18 years of age or older. The research was conducted via an online nationally representative sample from May 15 to 22, 2018. Quotas were established to ensure that survey respondents were representative of the U.S. population by age, region and gender. Details of key demographics and a shopping profile can be found in the Appendix of the report.

Download a copy of The Transparency Imperative here.

Additional Resources for The Transparency Imperative:
For deeper dives into the report, FMI and Label Insight will offer three complimentary webinars:

1. Wednesday, December 5, 2018, 2:00 p.m. EDT, How Do Diets and Health Consciousness Impact Transparency
2. Thursday, January 17, 2019, 2:00 p.m. EDT, How Does Transparency Differ Across Demographic/Generational Segments?
3. Thursday, February 14, 2019, 2:00 p.m. EDT, What is the Future of Transparency in an Omnichannel World?

Webinar registration available here.

About FMI
Food Marketing Institute proudly advocates on behalf of the food retail industry, which employs nearly 5 million workers and represents a combined annual sales volume of almost $800 billion. FMI member companies operate nearly 33,000 retail food stores and 12,000 pharmacies. FMI membership includes the entire spectrum of food retail venues; single owner grocery stores, large multi-store supermarket chains, pharmacies, online and mixed retail stores. Through programs in public affairs, food safety, research, education, health and wellness and industry relations, FMI offers resources and provides valuable benefits to almost 1,000 food retail and wholesale member companies and serves 85 international retail member companies. In addition, FMI has almost 500 associate member companies that provide products and services to the food retail industry.  For more information, visit www.fmi.org and for information regarding the FMI Foundation, visit www.fmifoundation.org. 

About Label Insight
Label Insight is creating transparency at the intersection of retailers, brands, and consumers, with an industry-leading platform for CPG product attribute data covering more than 80 percent of top selling food, pet, and personal care items in the U.S. The company's technology combines supply chain and on-package product information and employs patented data science and machine learning capabilities to create more than 22,000 high order attributes per product. This solution set delivers transparency to consumers and powers digital transformation through analytics, marketing, merchandising and e-commerce solutions for leading organizations across the Retail, Brand Manufacturer, Government and Technology industries. For more information, visit http://www.labelinsight.com

SOURCE Label Insight

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