FMCG Gurus studies reveal consumer caution amid cost of living crisis
Consumers are continuing to prioritise health and wellness with their food purchases, including within confectionery, according to research group FMCG Gurus latest trends analysis for 2023, writes Neill Barston.
According to the firm, which recently played a strong role in our World Confectionery Conference, shoppers are especially mindful of economic concerns, with the cost of living crisis, signified by the retail inflation pressures at a 40-year high, have made many people cautious on spending, and reflect on how they spend their limited financial resources.
As Mike Hughes, Head of Research and Insight at FMCG Gurus noted, “For the third year in a row, consumers will enter the New Year in a high state of uncertainty. This time it is not worry over the course of the pandemic, but the economic downturn and rising cost of living that people are facing.”
He added: “This result in consumers wanting to continue to seek out products that satisfy various needs, while at the same time, engaging in recessionary shopping habits and being more attentive to value. The key implication of this is that consumers will be reluctant to give up products that they deem essential and small luxuries but at the same time, must be more mindful of spend. FMCG Gurus has launched its Top Ten Trends for 2023, highlighting opportunities to enhance perceptions of value.”
In terms of the major trends identified, the organisation noted that for 2023, it is inflationary driven and focuses on how consumers are looking to make their money go further without sacrificing their need states, such as becoming less brand loyal and shopping around, being more resourceful, and looking to save money on certain products to spend more elsewhere. It must be remembered that few households have adequate savings, meaning any deterioration in the economy, financial well-being, or job security will hit many people hard and fast, meaning brands must be seen to be as responsive as possible. While consumers accept some form of compromise over the next twelve months, value will be more important than the cheapest price when seeking out products.
Furthermore, as in previous years, health and wellness has shaped a number of trends, as consumers continue to take a proactive and holistic approach to well-being. The first health-orientated trend is Fuel my Mood which describes how consumers will place greater emphasis on happiness, emotional wellness, and energy levels, especially as they realise the impact that fatigue can have on long-term wellness.
Another trend related to health is Finding Balance which emphasises how consumers will look to step back from daily pressures and re-evaluate what is important to them, prioritising their health, self-educating themselves about wellness issues, and doing their best to ensure they are not overawed by daily pressures and stresses.
Proactive Profiles highlights how consumers are continuing to take a long-term approach to wellness and stay fit and active until as late in life as possible. Linked to this, consumers are also recognizing the link between digestive health and immunity, a trend that will continue to become more prevalent as awareness of the gut microbiome grows. Finally, for health and wellness, Technolution looks at how technology will be seen as the way forward for offering new forms of innovation in the market, ranging from personalized products to fermentation and fortification, to cultivated products.
However, according to the organisation’s research, consumers do have other priorities beyond health and wellness, and in an era of austerity, more emphasis will be placed on brands reassuring people that they have their best interests at heart and are putting maximum care and attention into the formulation of products.
The Eagle Eyes trend looks at how consumers are being more attentive to information as they continue to demonstrate elements of risk aversion, meaning authenticity and transparency are crucial, with brands expected to provide the story behind the products that they have made.
Concerns will continue to exist around the state of the environment, and the Blue Planet trend showcases how people expect brands to take a holistic and proactive approach to sustainable practice along the whole of the supply chain, especially as people make changes to their diets and lifestyles to behave in a more environmentally friendly manner. This is something that creates new opportunities around technology, with the Age of Innovation highlighting how consumers expect brands to be as resourceful as possible, avoid waste, develop new farming practices that are natural, and address issues such as food waste and carbon emissions.
Self-expression is something that is also synonymous with value, and the Inclusive Era trend shows that consumers want products that mirror their attitudes and outlook on life, irrespective of whether the individual wants to actively challenge societal norms, or whether they feel that society is changing at too fast a rate. Finally, Taste Temptation looks at how consumers will continue to seek out small indulgences for reward and escapism purposes, especially as they reduce spending on big-ticket items, and hedonistic products positioned either nostalgia or experimentation will appeal to those who seek out small moments of indulgence.
As FMCG Gurus concluded, Irrespective of the trend being targeted, at a time when reduced financial confidence means that brand loyalty will likely decline, transparency of operating is key with regards to the industry responding to market demands from consumers.