Business Strategies

Customer Satisfaction Weakens

Customer satisfaction with food companies dipped for the first time in three years, falling 2.4 percent to an ACSI score of 81.

After almost two years of stalling scores, the overall American Customer Satisfaction Index (ACSI), founded at the University of Michigan's Ross School of Business and produced by ACSI LLC, fell 0.3 percent in the third quarter of 2010, which brings the Index to a score of 75.7 on a 0-100 point scale.  Accordingly, it will be difficult for the U.S. economy to look to strengthened consumer demand for a boost.   
Customer satisfaction with food companies dipped for the first time in three years, falling 2.4 percent to an ACSI score of 81. Rising food prices seem to be the culprit, but some slippage in quality is also to blame as satisfaction with 9 of the 13 largest manufacturers declined. Heinz fell 1 percent to 88 but leads the industry as it has for the past decade, with cereal maker Quaker Oats and confectioner Hershey (both –1 percent to 86) close behind and Mars (-2 percent) and Sara Lee (unchanged) next at 85.

Fresh and frozen meat producer Tyson plunged the most (-6 percent to 77), an all-time low and well below other food companies. Customers are complaining about quality and a recall of deli meats probably hasn't helped either. Kellogg also experienced a big drop, down 5 percent to match the industry average at 81. 

At the other end of the spectrum, ConAgra alone improved, surging 6 percent to nearly offset a steep drop in 2009.  Discounts on many frozen food lines and the introduction of new products created better value for money and higher quality. 
After three years of stagnant scores, customer satisfaction with pet food fell slightly, down 1 percent to 83, although pet food remains one of the highest-scoring products with no company ever below 79.  Mars Petcare leads the way, up 2 percent to 85 and tying the aggregate of smaller pet food brands. Del Monte (recently acquired by Kohlberg Kravis Roberts & Co.). was next, after a 4 percent surge to 83. Colgate-Palmolive's Hill's Pet Nutrition and Nestlé Purina PetCare share the next industry slot with identical scores of 82, just below the industry average. Hill's jumped 3 percent, while Nestlé Purina plunged 5 percent. Iams dropped even further (6 percent to 80), as quality falls from in best in class to about average, according to customers, which is unlikely to be satisfactory when buyers expect premium quality and are charged accordingly.

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