Most Households Read Food Labels

Todd Hale, Senior Vice President, Consumer and Shopper Insights

Last June, we fielded a survey to our Nielsen Homescan panel which included a question asking primary shoppers about their tendencies for reading labels on food and beverage packages.  Just under two-thirds of U.S. households (61%) agree completely or agree somewhat that they read these product labels, with 31% agreeing completely.  And as you might expect, we do see some differences when we drill down across demographic groups, but we thought it would be interesting to also look at how shoppers at various retailers differ in terms of reading labels.

Here are the demographic groups who tell us they are more apt to read labels and whose response indexed 10% or higher versus the average household response.  No surprise here: better educated, older (probably needing to look at labels due to a health condition), higher income, and those in a professional/managerial occupation.  Is there an opportunity to increase font side on package labels to help older consumers decipher product ingredients?

% Households agreeing completely to “usually reading labels on food & beverage packages”:

• Total Households:  30.5%
• Female Head College Grad:  36.0% (118 index)
• Female Head Age 55 to 64:  35.0% (115)
• Female Head Age 65+:  34.8% (114)
• Incomes of $100k+:  34.1% (112)
• Professional/Managerial:  34.0% (111

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Economy Changing How Singaporeans Shop For Food

Consumers around the world are changing the way they spend their money given the difficult and uncertain economic conditions.  In Singapore, one way people are adjusting is by eating at home more frequently, according to new research from Nielsen.  The result: the average Singapore home is spending more on fresh food, groceries and household items than in recent years, creating opportunities for retailers and manufacturers who know how to effectively leverage this new behavior.

The average household has increased overall spending in these categories by 14 percent, with fresh food spend registering an average of 15 percent growth, with the biggest increased among high-income households.  Seventy percent of Singaporeans survey said they changed the way they spend their money with a view toward increasing savings.  Almost 75 percent of shoppers said that they now “buy only the essentials” and were making fewer purchases of chocolates, carbonated soft drinks and salty snacks.  Basics such as rice, bread, cheese, butter/margarine and infant milk were some of the fastest growing categories.

“Modern day Singaporeans lead hectic lifestyles and are generally tight for time, and convenience is the key driver when deciding where to shop.  Supermarkets and hypermarkets meet their needs as shoppers are now able to get all of their fresh food, grocery and household needs under the same roof,” said Ooi Pin Pin, associate director, retailer services for Nielsen Singapore.   As a result, these outlets have seen their sales of fresh foods post solid growth, while traditional wet markets have continued to decline.

Read the full press release on how Singaporeans are changing how they shop for food here.

Consumers Cut Back: Retail Sales Change As Value Trumps All

Sales of food and beverages have been more resilient than non-consumable goods during the economic downturn.  But according to Nielsen, consumers are changing the way they buy food as they seek to stretch their dollars farther.

Grocers, drug stores and mass merchandisers are seeing strong growth in store-brand items.  Unit sales of those items grew an average of 4 percent in the last six months of 2008, led by dairy, packaged meats, frozen foods, deli, dry grocery and beverages.  Meanwhile, branded items declined an average of 3.3 percent during the same period, with all categories except for fresh meat showing drops.

Unit sales during 2008 declined 1.3 percent across the store, with the largest declines among non-edibles.  Unit sales of health and beauty, non-food and general merchandise dropped 2.7, 3.7 and 6.7 percent, respectively.

Store brand sales continue to be strong, as consumers realize their quality and value, as well as the increased range of products available.  Nevertheless, store brand sales slipped slightly in the last month of 2008.  At the same time, sales of branded items declined almost across the board.

“Inflation and the weakening economy have led consumers to switch to store brands and to cut-back their total purchases. Additionally, they are cooking more at home and purchasing more staples than in the past,” said Todd Hale, Senior Vice President of Consumer and Shopper Insights at Nielsen.

“Nothing illustrates the consumer shift more than what categories showed the most growth.  In boom times (2004 to 2005), the top five sales leaders were dessert-dairy, men’s toiletries, tea, yogurt and bottled water.  In the period 2007 to 2008, the top five sales leaders were canning and freezing supplies, wine, vitamins, fresh meat and dry vegetables and grains.  Clearly the economy has shifted many consumers to a back-to-basics approach when it comes to eating,” said Hale.

“Natural” Beats “Organic” in Food Sales According to Nielsen’s Healthy Eating Report

Americans are increasingly turning to foods and beverages that promote healthy living.  But just how much do these foods generate in sales? And which categories have shown the most growth?  Nielsen’s Healthy Eating Report for 2008 answers these and many other questions about food and beverage health and wellness claims.

Highlights of the report include:

• Food labeled as “natural” generated $22.3 billion in sales in 2008, up 10% from 2007, and up 37% from 2004
• Organic foods (UPC-coded) accounted for $4.9 billion in sales, up 16% from the year before, and up 132% since 2004
• Foods that tout antioxidants produced $1.9 billion in sales, up 11% in 2008 and up 147% since 2004

• Foods that are targeted to those who are “carb conscious” saw sales decline 3% in 2008 to $2 billion, and declined 31% since 2004

• Hormone/Antibiotic-free foods saw sales grow 11% in 2008 to $2.4 billion, an increase of 66% since 2004

• Caffeine content seems to be less of a concern: sales of beverages labeled “caffeine free” declined 3% in 2008, and 5% since 2004

“Although much is written about organics, products labeled “natural” generate much higher sales.  In fact, sales of products labeled “organic” leveled off significantly in 2008 after four years of solid growth,” said Tom Pirovano, Director of Industry Insight at Nielsen. “Looking at the year ahead, it will be interesting to see how the economic downturn affects sales of foods and beverages that are primarily described as organic, which, for many consumers, have a reputation for being more expensive than other foods.”

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Global Shoppers Consider Ethics And Environment

Compared to the rest of the globe, Latin America’s consumers place the highest importance on how environment standards and labor conditions impact products they purchase. In North America, consumers come in just below the global average when considering the importance of those factors according to a Nielsen report on Corporate Ethics And Fair Trading, done in partnership with Oxford University’s Environmental Change Institute. In addition to Latin and North America, the report details consumer perceptions in the Asia/Pacific region, Europe, and emerging markets. “A global social conscience is one of the biggest trends to have emerged in the last decade. Global consumers are collectively speaking out and demanding that corporations make a positive contribution to society,” notes Amilcar Perez, Vice President, Marketing, Latin America, The Nielsen Company.

Read Corporate Ethics And Fair Trading: A Nielsen Global Consumer Report.