Sometimes they say, “Don’t ask the question if you don’t want to hear the answer.” Perhaps that’s never been more applicable than now – when food industry leaders want to believe the nation’s economy is recovering.
But who’s ready to ask the question?
There was no shortage of queries when lawmakers met in mid-June with Federal Reserve Chairman Ben Bernanke. Encouragingly, Bernanke said the nation’s economy is improving on increased manufacturing activity and business spending. Yet he noted that any recovery could be vulnerable to the effects of Europe’s debt crisis, U.S. budget deficit planning, continued high unemployment, a fragile housing market, a nervous Wall Street and cautious consumers.
Interestingly, The NPD Group Inc., Port Washington, N.Y., said it went straight to those cautious consumers with even more direct questions. This June saw NPD issue its own report titled, “What’s Next on the Road to Recovery.”
“There are encouraging signs that the economy may be heading for recovery, but according to our findings, consumers – especially those with lower incomes – continue to struggle,” said Dori Hickey, study author and NPD’s director of product development. “Most consumers have unquestionably felt the sting of tough economic times and have cut back on spending and adopted thriftier behaviors; behaviors that may become entrenched the longer the recession continues. Our findings suggest that we may be looking at a new ‘normal.’”
Hickey said NPD learned that …
… nearly one in five consumers expect to worse off 12 months from now than they are today;
… half of those consumers expect their financial situation to be the same as today;
… nine out of 10 consumers say they will plan and watch their spending on food and beverages outside the home.
Asked what they will do more often during the next six months, consumers said they will (1) use more newspaper and magazine food coupons, (2) stock up on foods when they are on sale, (3) search store circulars for low food prices, (4) buy less expensive brands of foods and (5) search on-line for manufacturer coupons.
“As food and beverage manufacturers and retailers begin to rethink their marketing communication programs as they start their recovery planning, it’s important that they understand their consumer’s mindset,” said Hickey. “Consumers lost personal wealth in this recession and they’re skeptical that ‘things will go back to the way they were. In their minds, it appears the road to recovery will be a long one.”
I certainly agree with Hickey about the need for better consumer insights. Given the “state of the industry,” I think better research – the process of asking better questions – will help everyone involved.