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04.08.2009
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StumbleUponRecession: A Boon for Convenience Foods?
Even in today’s uncertain economy, next to price, there is nothing more dear to consumers, seemingly, than convenience. But what exactly do consumers mean by “convenience”? Is it the thrill of finding an open parking space next to the store entrance or the ability to prepare, consume and tidy up after a completely nutritious meal in less time than it takes to read this sentence? And just what does saving time have to do with convenience? More to the point, what are consumers looking for when they say they value convenience?
For its part, the food industry (broadly construed) has variously identified and solved the problem of convenience for us over and over again. We now enjoy convenient parking, convenient locations, convenience stores and, of course, convenience foods.
Are these offerings really in step with today’s convenience-minded consumers?
What Price Convenience?
The thought that consumers might value convenience comes as no surprise to anyone, of course, and when asked simply, “When shopping for foods and beverages, how important would you say convenience is to you?” about two thirds (66%) of them will say it’s very if not extremely important. To put this in perspective, only half that many (34%) feel as strongly about brand name, while a bit more (73%) put as much store in low prices1.
Is convenience really equally as important to consumers as low prices? No, not if convenience is about one-stop shopping. When asked to choose between the convenience of one-stop shopping and the lowest possible prices, over half appear hard pressed to choose between the two. Still, consumers do lean somewhat more toward saving their dough than wanting everything sold under one roof.
In any case, a wide swath of the consumer population is unwilling to give up shopping convenience in their pursuit of the absolute lowest prices. That makes sense. Even in these hard economic times, we’re exceedingly unlikely to see shoppers drive all over town just to save those last few pennies on a can of peas. But how much would they be willing to fork over in the name of convenience foods? Are convenience foods worth a 5% premium, 10% extra or more? The answer depends on the consumer, obviously. One out of every five (23%) wouldn’t pay a cent extra for convenience food, but one of those five (20%) would pay up to 5% extra for the privilege, and at least one more of them (30%) would be willing to go as high as 10% extra. Bottom line, somewhere along the way toward hiking the price up to 10% extra for convenience we’d lose half of our customers.
It seems safe to conclude that most consumers will pay for convenience. Whether it’s forgoing the cheapest prices for more convenient shopping or paying extra for convenience foods, the interest is there.
Reimagining Convenience Foods
What America seeks to prepare easily at home is changing in an era of ever globalizing food culture. America’s eating habits are changing faster than they ever have before due to the explosion of culinary diversity in the restaurant scene. While Americans have gone to restaurants heavily since the 1980s, only in the last 10 years have they had access to the kind of culinary diversity we see today in most major markets. And whole generations, Gen X and Y, have now grown up thinking that frequent restaurant going is simply a normal part of life. These younger cohorts also have become delinked from any notions of “my traditional cuisine,” preferring to sample any cuisine from around the world that strikes their fancy.
It used to be enough for packaged food makers to box up or jar up established flavors and food experiences under the rubric of convenience. This is how the convenience industry began in the 1940s and 1950s. But now, the key challenge is to understand the curious connection between trends in the restaurant scene and the American home-cooked meal.
As the recession cools down spending on dining out, it is heating up opportunities for food manufacturers and food retailers as more and more American consumers eat at home. Download our FREE white paper, Reimagining Convenience Foods: The Opportunity for CPG and Food Retailers to Make Quality, Distinctive Flavors More Accessible at Home, as it unpacks this critical zone of cultural change with both quantitative and ethnographic insights.
PURCHASE THE WHITE PAPER >>
1These and all other statistics cited are taken from a 2008 online survey of 485 consumers. The sample is nationally representative and has a margin of error less than ±4.5 percentage points at the 95% confidence level.
