Where will next year take us?

Posted by Daniel Palmer on 8th December 2008

A no-frills, back-to-basics attitude is set to be taking by consumers, manufacturers and retailers alike next year as consumers and businesses opt for caution in the face of economic fears, Nielsen advised in their latest edition of Consumer Insights. This will see many consumers focus on “going green” only when the cost is right, national brands fight back against private label with innovation in product design and packaging, and increased sales of products useful for ‘coooking from scratch’.

Green intention fuelled more by hip-pocket rather than environmental factors

Consumers have steadily become more interested in environmentally-friendly products over recent years but growth in “green” product sales may stall next year as cost-cutting becomes more paramount. “Families on a tighter budget will be less likely to pay extra for environmentally-sustainable “green” products, but they will improve the environment as a by-product of cost-cutting strategies. Expect consumers to continue saving money on gas by combining errands (lowering car emissions), and on purchasing less non-essential goods (producing less waste),” Tom Pirovano, Director of Industry Insights at The Nielsen Company, advised.

Similarly, while many companies continue to report that their commitments to reduce their carbon footprint are stronger than ever, the downturn is expected to see manufacturers focus their primary attentions on “green” techniques that will save money. “Manufacturers will incorporate more sustainable manufacturing techniques to save on costs by using more efficient product packaging-also good for the environment,” Mr Pirovano said.

National brands fight back

Private label products have made a great impact on consumers this year but national brands may be able to peg back some of their gains next year. Coercing lost customers back will remain difficult for national brands as budgets remain tight, but innovation can offer consumers value beyond price.

“Look for established brands to aggressively go after private label switchers with innovative packaging, unique flavors and additional health and wellness claims,” Mr Pirovano reported.

Cooking from Scratch

Cooking from scratch, a home practice that had lost favour as the trend to convenience gathered pace in the 90s, is expected to continue to increase in popularity. Sales of cooking and baking products have been on the rise and products like flour, oil and spices are likely to be in demand next year as consumers continue to focus on saving money.

Brand Prestige

Fewer premium-priced goods should be introduced as demand wanes for ‘expensive premiumisation’. Manufacturers with premium new products in the pipeline that will be priced above the competition may need to reconsider the most appropriate time to release such products, with a launch in the next six months unlikely to reap great reward. It should be noted, however, that premiumisation in the food industry was a popular trend up until about a year ago and can be expected to again return to favour at some point in coming years.

Mr Pirovano advised that new products do need to be careful of just focusing on low price, as this may see the product fail to meet expectations as value is more than just price. “Marketers should look to emphasise a brand’s value proposition in new and unique ways by linking the value message to the consumer benefit,” he concluded.