Market View: Let the Feds Do Your Market Research

April 21, 2014
The NHANES database has a wealth of free information, including consumption, not sales data.

I was at a meeting recently where someone asked whether the data in a slide was shipment data or consumption data. I was a little surprised because I found few companies actually use consumption data. After further discussion, I understood the person was really asking about sales not consumption. I realize that a lot can be learned from studying what people buy. And clearly there's an enormous industry made up of giants like Nielsen and IRI providing both data and analysis.

However there is an enormous amount of information and insight to be gained from studying what people actually eat. When I ask food executives about this, the most common response is, "No one seems to have data like this available." They're always shocked when I tell them it is available and that they have already paid for it.

The data I’m referring to is called the National Health and Nutrition Examination Survey or NHANES. The data is collected every few years by the federal government and the raw data is available online. It is one of the most comprehensive sources of information on what we eat, how we eat, where we eat, etc. Remarkably, very few companies use this data.

I have been using NHANES since the early 1970s when I was with the Campbell Soup Co. However I have worked with a variety of other food companies who took a more strategic approach to the use of understanding how people eat (and not just how they buy).

The database consists of every single item that an individual eats (including the quantity) over a two-day period. The data is coded at the most granular level, so they can be aggregated to the level of interest -- from large categories like salty snacks to a specific item (e.g. potato chips - low fat, BBQ flavored). But it also provides what else was eaten at the same meal, what time it was eaten, the self-identified meal occasion, who else was at the meal at the same time, and so on. The database is made up of about 30,000 people!

As I only have a few hundred words in this column, I cannot begin to tell you all the other socioeconomic and demographic data that is available, as well as the detailed health information that extends far beyond obesity and diabetes (which are hot topics today). The sampling is remarkable for a food marketing research project in that the results are projectable to a national population.

Here is one more interesting point. The data is collected in the home by trained food and nutrition professionals. They use all sorts of mechanisms to accurately estimate how much people actually eat, including food models, cup sizes, plate sizes, etc. They ask the size of the portion when the person began the meal and how much was left over after the meal so that the exact amount consumed can be estimated. This type of data is totally out of the budget of any food company.

So why aren't more food companies using this incredible source of information? The first reason that I'm given when I approach a company is that it does not include branded data. That is, I can tell you exactly how many all-beef hot dogs were eaten in a day, when and where they were eaten, with whom they were eaten, and how obese the person eating them is, but I can't tell you what brand of hot dog was consumed. That makes 80 percent of the market research directors uninterested in the data.

The second reason is that it didn't have a “brand-name solution” that most of the market research suppliers have. When using this type of data, the company must actually diligently think about and articulate exactly what strategic issues they're interested in; only then are they able to examine the data for insights and solutions. As one research director told me, “We don't have time to sit around and think about what problems we have, we need to have a solutions provider come in and tell us.”

Finally, while the data is free and downloadable, it is not in a format that is convenient for most traditional marketing research companies or even marketing research suppliers to use. So while the data is free, it actually has a cost associated with it. While the costs are usually extremely low, it is still a number that is incremental to the marketing research budget.

Believe me, I sympathize with all of these objections. Most research is tactical; if you don't know the brand or you don't know the branded competition, it makes tactical market planning difficult. I also realize most marketing research departments are understaffed and besieged with projects. It makes life almost manageable when someone comes in and says, “Our XYZ product analyzer will solve all of your problems.”

In many cases, presenting the opportunity to interrogate the NHANES database is just another problem on their desk rather than another source of a solution. And finally, if you don't have the money, you don't have the money.

In this competitive world, food marketers have to turn over every rock or search every cranny for information on their consumers. The federal government, surprisingly, has provided the food industry with another place to find solutions. Take a look to see if it can help you! Get something for your tax dollars.

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