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By Diane Toops, News and Trends Editor | 12/30/2008
As consumers split between the low and high end of the market, manufacturers will invariably follow suit. Many will start to focus on value brands. “The middle market will increasingly be squeezed and is going to have to prove its worth when faced with competition from newly improved basic lines,” says Holleran. Beyond this, many companies will position their products as a more affordable alternative to going out. Expect premium ready meals that give a restaurant experience at home or beauty products that bring a spa-like feel to the bathroom.
• Playfulness, lightening the mood: In tougher times, people not only crave life’s little luxuries, they also need to enjoy themselves. Small playful distractions such as neon make-up, fun-to-eat food or interactive stores such as Apple will become increasingly popular as people look to let their hair down and have some fun.
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Companies will focus on products and experiences that are light-hearted, and those that offer real entertainment will have a significant competitive advantage. Beyond this, manufacturers will launch products specifically designed to enhance people’s moods in unique ways. From food and beauty to household cleaners, Mintel expects to see a widening range of products that soothe, energize or simply lift the spirits.
Grocery store leverage increases
Economic pressures also are affecting the relationship food processors have with grocery retailers. Shoppers are packing their carts with lower-priced private label products, giving grocery stores some leverage in talks with their suppliers. Penny pinching consumers have increased sales of store branded products by 10 percent last year to more than $81 billion, according to New York’s Nielsen Co. (www.nielsen.com) and Cincinnati-based Kroger Co., the largest traditional food retailer in the U.S, reports Dow Jones.
To promote their brands, branded consumer goods companies may have to kick in more to a retailer’s marketing fund to pay for discounts, two-for-one offers or prime placement in supermarket circulars. Retailers may also get juicier rebate offers from their suppliers, as incentive to help push sales of branded products.
Sales of name-brand products still vastly outsell in-house goods, which accounted for 16 percent of dollar sales and 21 percent of unit sales in the past year, according to Nielsen. Also, most retailers can’t do without Coca-Cola Co. sodas or General Mills Inc. cereals to lure shoppers into their stores.
“The trick is to find a ‘coexisting strategy’ that is a balance between private label and national brands,” according to Thom Blischok, president of Information Resources Inc. (www.infores.com), Chicago.
And it’s better to plan for the unexpected. If the economy improves, consumers may revert back to their favorite brands, but those who have had good experiences with private label products, are likely to make permanent changes.
More, give me more
Health and wellness is expected to continue its march into new product development particularly foods with added health benefits for babies, children, aging baby boomers, seniors and pets. Hopefully, consumers will be able to afford them.
On the wellness front, the N.E.X.T. (New Emerging eXciting Trends) team at Wild Flavors (www.wildflavors.com), Erlanger, Ky., predicts growth in the following categories:
• Kids’ well-being: Recognition of the importance of a proper diet for kids will translate into a greater number of fortified products and better-for-you products for kids, and a focus on gluten-free children’s foods.
• Intestinal well-being, detoxification, probiotics, prebiotics: Immunity from the inside-out as U.S. consumers recognize the importance of digestive system health on overall well-being and body balance.
• Marine-type nutraceuticals: Health ingredients from the sea that go beyond standard fish oils. Exotic salts, seaweeds, kelp, sea cucumber, coral calcium, etc., will create renewed interest and a “back to blue” natural approach to healthy products.
• Bone & joint health: As baby boomers age, stress on bones and joints becomes more evident. Functional health ingredients for joint health and simplistic fortification with vitamin D and calcium will continue to grow in consumer products.
• More whole grains: Whole grains take the center stage again this year with new product offerings centered around heritage and exotic grains for unique flavors and textures – such as quinoa, amaranth, farro, kasha.
• Exotic herbs & vegetables: The movement and recognition of the powers of “superfruits” leads to a desire for more savory exotics, which also are important to the focus on globalization and ethnic inspiration in dining.
• Chocolate plus+: New ingredients will be added to an old-time favorite, which is already showing health benefits. Watch for fortification with omega-3s, plant sterols, probiotics, etc., to grow as chocolate continues to be the easiest functional good-for-you flavor choice.
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