innovation - collaboration - motivation - activation
Dr. Matilda Freund

Q&A on Shopper Insights

With Laura Barry, VP, Consumer Insights & Shopper Engagement, Kraft Foods, Inc.

The economic downturn has affected consumers and their shopping behavior. After a period of denial, most have come to realize that their lifestyle needs to change.

To find out how consumers are coping, Kraft Foods reached out to them to gain insights that could be turned into worthwhile programs in stores. The intelligence gathered resulted in meal solutions that help consumers as they try to stretch their grocery dollars. At the same time, it helped to enhance Kraft's shopping marketing initiatives which have grown in importance.

To learn about the new shopping behavior and how Kraft is working with retailers to help consumers deal with the economic downturn, Supermarket News spoke with Laura Barry, Vice President, Consumer Insights & Shopper Engagement for Kraft Foods North America.

SN: How have shoppers been coping with the economic downturn? What does your research show?

Barry: In the spring of last year when gas and food prices were going up, many consumers were sensitive to what they were being confronted with. More were faced with taking a second job or they knew someone who had lost their position. Other people said, "Well I'm not really going to change my behavior. I'm going to eat what I want, when I want, and do what I feel like."

We knew that we really needed to keep track of what's going on with the economy and the stages that consumers will be going through so that we could adapt our programming as well as our position with them. We listened and observed consumers both qualitatively and quantitatively on all facets of their lives.

The first stage we uncovered on the journey, we refer to as Awareness. Awareness was probably the longest stage because people became aware at different points in the last year. Even with the gas and food prices skyrocketing, people really weren't getting an appreciation of the economic situation. Plus the newspapers kept asking whether we were in a recession or not.

For some, the Awareness really didn't come until it hit their pocketbooks and their investments. When it started hitting people personally, then they started feeling it. When home values started plummeting, people were saying, "This is really affecting me."

That's when Anxiety, the second stage set in, and it was a bit of a panic. Some people are still in this stage. Their dollars are not going as far as they used to. They're confronted with hard choices. If they needed a new car, they're going to put it off. If they planned to send their children to University in the next couple of years and their investments went down 25-30%, how are they going to cover that? Some people who are on the cusp of retirement and are thinking they really can't afford to retire now.

In Fall of last year, people began realizing that they can't look for solutions from the government or from manufacturers. Consumers really had to figure things out themselves. This Retrenchment period had a lot of consumers really changing their behavior. In the fourth quarter, consumers were eating out less and they're also eating down. Food Shopping included less discretionary snack items, frozen vegetables over fresh, cheaper cuts of meats, carb based breakfast items, frozen, meals, pizza, prepared soups and pasta are on the rise. Eating down also meant that they are trading down one step from what they normally would do. So on Friday night if the tradition was pizza delivered, they now opted for frozen pizza. If they had been going to a mid scale family restaurant, maybe they'll go to a lower cost fast food — something that's a little less expensive. They're making tradeoffs and changes.

SN: In other words, their lifestyle is changing as they limit their spending?

Barry: Yes. When you think about it from the perspective of discretionary spending, clothing and food are really two expenses that can be very variable, and one she can feel empowered to control. Some will employ a fixed budget while others will just cut back here and there.

Americans really take pride in trying to figure this out. They are making real changes in their behavior, and they actually like the changes that they're able to make.

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