Economy beats premium for first time in UK food launches
The market research organisation said that British consumers have remained cautious in their spending, seeking out bargains and items on promotion. The food and beverage industry has responded, with new products with economy-related claims accounting for 9% of product launches last year, compared to 7% making premium claims. In 2008, premium launches accounted for 9% of new food and drink products, compared to just 2% that carried economy claims.
However, economy products have evolved, moving from stark packaging to reassurances of value for money.
Director of innovation and insight at Mintel David Jago said that investment in new product development (NPD) for economy ranges has increased steadily since 2010, reflecting continued pressure on consumers’ disposable income levels.
“Much of the activity in the economy segment in 2012 was fuelled by UK supermarkets improving their value-for-money ranges in response to consumer challenges dictated by the ongoing economic turmoil,” he said.
“The largest share of products with economy claims is driven primarily by significant private label investment in essential economy product ranges.”
Middle class value
Branded manufacturers have also used larger, bulk value pack sizes to emphasise lower cost per unit, but Jago suggests that other strategies might be more successful if brands are looking to appeal to newly poor consumers.
“As budgets grow ever tighter, consumers are recalibrating their lifestyles and making new product choices, but they carry their middle and upper-class tastes and experiences with them. Economy product innovation, packaging and marketing needs to remain mindful that downsliding consumers don’t want to be made to feel poorer,” he said.
The UK now has more new product launches featuring economy claims than any other global market, Mintel says, and the country accounted for a fifth of all economy launches worldwide in 2012.
Across Europe, consumers have reported switching from branded products to private labels (34% in Spain and Italy, 21% in France and 25% in Germany).
Senior global packaging analyst at Mintel Benjamin Punchard said: “Alongside clear economy statements on packs, which can be off putting for some, brands have recognised that packaging can give an economical edge through offering a reassurance of value. This might be packaging that protects the product better so that the consumer can rest assured that they will be able to use the product before it goes off. Similarly portioned or dosing packs tell the consumer that they will definitely get the stated portions out of a pack - both a value proposition and a helpful measure for those on a budget needing to know exactly how far a product will stretch.”
