Consumer Confidence at 2004 Levels – Does This Mean Green Grocery is Dead?
Not necessarily. Though consumer confidence is down, recessions are historically the time when emerging trends gain momentum – green is a fast growing trend.
But, if your business depends on retail distribution, now is the time to familiarize yourself with how the grocery channel operates in down markets…which you may not have been a part of until this time.
The effect at retail has more nuance than an upturn in staples sales, as people eat out less and turn to food stores more for their next meal components. Rattled consumers expressed their lowest confidence levels since the start of the Iraq war in 2003, and the lowest expectation levels since the oil embargo and Watergate of 1973, according to the Conference Board.
This means a focus on the consumer benefit for organic foods…not the term “organic” but the health benefit provided. Consumers may be more willing to spend the extra dollars to buy organic if they have the health benefit spelled out in front them at point of purchase.
Or perhaps, no certainly, this is the time to teach consumers how to stretch their menus. During tight times, providing recipes with which consumers may not be familiar is a great strategy. Coupons and selling a value message is paramount.
“Most distribution share growth happens going into a recession or coming out of a recession, not at the top or bottom of an economic cycle.”
Suggestions:
· Build competitive advantage in a recession. In 2001, for example, Kroger transitioned to a lower gross margin environment, and Kimberly-Clark raised margins by decreasing the pack count of its diapers.
· Invest contrarily in growth.
· Design and execute programs with full knowledge of category dynamics.
· Commit to stakeholder consumers, employees and distributors
· Create the necessary infrastructure and ‘entrepeneurial spirit’ to succeed.
Declining consumer confidence doesn’t have to mean a slowing of your business…it just means a changing of the way you do business.
I just had this same conversation with my bro-in-law last night. I told him that I would cut out other things in my life before cutting back on organic groceries. The nutritional value of organic and health aspects of eating organic are too important to me. Our bodies are high performance “machines”. They require high in nutrition value foods. Most people would not pour cheap gas into a sports car why would people want to do that to their own body?
Sustainable seafood is a concept we can all agree on. Democrat, or Republican, carnivore or vegan, we all agree because none of us want these fish to disappear. Whether we want to continue eating them, or simply want to see them protected, we all have the same goal. Check out this site http://www.oceanconservancy.org/vote4seafood and choose which fish you want to help.