Fighting fear - key strategies for the food industry

Are our spending patterns dictated by fear? A new report from Datamonitor suggests that this is, indeed, the case. In order to feel safer about purchases, consumer concerns over crime, terrorism, food safety and disease determine their spending habits.

Compounding these concerns - trust between consumer and supplier is rapidly diminishing, primarily as a result of food scares. As we move towards war, the climate will assuredly worsen. How can the food industry alleviate fears?

Datamonitor suggests that crime and terrorism have indirect influences on purchasing patterns. By encouraging people to change their lifestyles - by keeping children at homeafter school, for example - consumers create new consumption occasions andnew demands. The home becomes a place of safety and comfort, encouragingconsumers to spend more time there, and spend more money on enjoying it.

Terrorism has similar effects to crime, but the unpredictable and arbitrary nature of terrorist attacks means that consumers can take less concrete action to meet the perceived threat.

Food safety and disease have more direct impacts on consumers' shopping trolleys. The report cites, and confirms, the general consensus, that the biggest concerns to affect consumers are genetically modified (GM) foods, pesticides,contamination, and allergens.

But, suggests Datamonitor, and this is not surprising, not all consumers feel the same fears and this will have a direct impact on CPG sales. Young people, for example, are notoriously convinced of their own invulnerability, while other people find that concerns such as pressure ofwork eclipse fears over invisible bacteria.

According to Datamonitor's survey, the key consumer groups most likely to change their CPGspending due to fear are the better off, new parents and the elderly. Ingeneral, women's fears exceed men's for every issue - most notably for crime and terrorism.

Being better off is the most important criteria for being a fear-driven consumer. Arguably, worrying about the presence of pesticides or genetically modified organisms is a luxury, afforded only to those who can add criteria other than price to their purchasing decisions. While by no means all better-off consumers will worry about these issues, a significantproportion (64.1 million in 2002) does.

New parents are particularly vulnerable to fear-based spending. They have a natural and very powerful protective instinct which heavily discourages them from taking any risks with their newborn. As a result, their priority becomes finding products which will not introduce any harmful elements into their home or their baby's diet.Take the booming organic baby food sales as an indicator.

The report continues that the elderly are increasingly concerned for themselves. The ageing process increases their feelings of vulnerability and this makes 'taking care of themselves' a greater priority than it used to be. At the same time, Datamonitor argues that retirement leads to a much greater exposure to media messages - due to the increased spare time - with the result that the elderly are much more aware of the current food scares. Datamonitor's analysis found that in 2002, a massive 41 million elderly Europeans were fear-driven in their purchases.

All in all, fear-driven consumers make up 22 per cent of the population. But those in Italy, Spain and the UK making up a far lower percentage of the population than in other European countries.

So what does this mean for the food industry?In short, a market worth €1 billion a year. Datamonitor claims that fear driven consumption is worth €1 billion in increased and transferred spending.

For some markets, this leads to a reduction in value. Meat and ready meals, in particular, suffer from fear-driven spending. The cost tothese markets of consumers seeking to feel safer about their diet and homehygiene is estimated to shortly reach €2.2 billion. Other markets, such as liquid milk, will also suffer, though not to such a great extent.

On the flip side - good news for fruit and vegetable handlers for their market is expected to gain considerably from the trend.

Concerns over disease have an obvious effect on the home hygiene market, but Datamonitor suggests that there are also opportunities for food and drink manufacturers.

How? In a bid to alleviate contamination fears and win consumer trust, food and drink companies can improve packaging, add handling guidelines and educate consumers, writes Datamonitor.

"Manufacturers and retailers have to take action to address consumerconcerns, both to maximise potential gains from this trend, and moreimportantly to prevent consumers' fears from severely damaging their market,"​ commented Andrew Russell, Datamonitor consumer markets analyst and author of the report.

"Improving consumer trust is mandatory - through better information campaigns, transparent policies on the preparation of the product and on the quality and safety of its ingredients - proving to consumers that their concerns over food safety and disease are being taken seriously. This maymean enforcing changes all the way along the supply chain, and working withcertification bodies to create a reliable, recognisable authority which isworthy of consumers' faith,"​ added Russell.

Further details about the report can be obtained from Datamonitor​.