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Consumers Wary of Big-Brand Claims

Aug. 24, 2007
IBM study finds consumers wary of claims by big-brand food companies.

Recent product contaminations and recalls coupled with confusion over marketing claims have contributed to an erosion of consumers' trust in consumer products manufacturers, according to a recent survey by IBM.

The computer technology firm commissioned Harris Interactive to survey 1,676 grocery decision-makers in the U.S. and UK Feb. 13-21. A whopping 70 percent of respondents expressed a low overall level of trust in the claims branded food products make about their environmental impact and health and wellness benefits. In fact, almost half are more concerned about safety, and nearly two of every five consumers say they buy different brands today because of these concerns.

Although nearly 60 percent of respondents say they have more knowledge about the contents of the food they buy now than they did two years ago, 72 percent now want even more information about the source, the production methods and the contents of the packaged food products they buy.

Why is IBM studying food purchasing? No longer big in computer hardware, the company now does a lot of business consulting while marketing complementary software, including systems for traceability.

In a complementary IBM study, "Establishing Trust through Traceability," the company identifies the "Omni Consumer," a new breed of consumer driving this shift. These consumers are concerned, empowered and more connected than ever -- with sophisticated technologies at their fingertips. They are also purchasing a wider range of products and are actively and frequently tuning in and out of unwanted marketing messages.

"Clearly the factors influencing consumer purchasing behaviors have changed dramatically over the past five years," says Bill Gilmour, global consumer products lead, IBM Global Business Services. "While product, packaging and branding are still key, their significance has been topped by a number of other factors. The Omni Consumer wants products that deliver incremental health and wellness benefits coupled with an understanding of the impact of these products on individuals, society and the environment."

IBM suggests that companies align a roadmap to "Full Value Traceability" with their brand vision to set themselves apart from the pack. These new systems can both safeguard the food supply and enable the trust and transparency necessary to instill consumer confidence and, in turn, protect and empower individual companies' brands. The linkage of the physical and information supply chains coupled with engaging all the relevant stakeholders, is an imperative in building a "Full Value Traceability" system.

"To date, most traceability investments have been driven by regulation," says Tom Peterson, general manager of IBM Consumer Products Industry. "We're recommending our clients expand these initiatives beyond a defensive posture and leverage them for brand empowerment.

"This enables them to better protect their brands against contaminations, counterfeits and recalls," he continues. "At the same time, it builds a platform to restore consumer confidence and aggressively enter new high-value segments, such as functional foods and organics. The era of the Omni Consumer is requiring a deeper commitment to transparency, and the companies who deliver on this will be the clear winners."

For more on the study, see www.ibm.com/consumerproducts.

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