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Transparency Yields Greater Brand Loyalty: Study defines what transparency means to shoppers and how it impacts their food retail purchases.

Grocery shoppers exhibit loyalty to products that create deeper relationships through information exchange, according a report from Label Insight and the Food Marketing Institute (FMI). "The Transparency Imperative" report found shoppers increasingly demand transparency and a closer connection to their food, so much so that 75% are more likely to switch to a brand that provides more in-depth product information, beyond what's provided on the physical label. When shoppers were asked the same question in 2016 in a similar study by Label Insight, just 39% agreed they would switch brands.

FMI, with support from Label Insight, developed this report with the goal of defining what transparency means to shoppers and how it impacts their food retail purchases. The report further delves into attitudes and behaviors among health-conscious shoppers, those who are digitally engaged, and reveals how consumers respond across generations.

According to the report, 86% of shoppers agreed that if food manufacturers or retailers provided access to complete and easy to understand definitions for all the ingredients, it would result in more trust. Nearly as many shoppers (80%) said they are more likely to be loyal to a brand that provides more in-depth information, beyond what is provided on the physical label. More than half of shoppers (54%) are even willing to pay more for a product that has additional product information.

"The new shopper mindset requires brand owners to think about their products well beyond the traditional label and respect a more digitally-minded consumer," noted Doug Baker, FMI vice president, industry relations. "The study offers several considerations for how to make the best use of these findings, but overall, they require companies to recognize and communicate the importance of transparency and perform a thorough review of their unique consumer audiences and commerce channels."

The vast majority of consumers (69%) said it is extremely important or important that brands and manufacturers provide detailed information such as what is in their food and how it is made. Interestingly, online shoppers (80%), college graduates (76%), and higher grocery spenders--$125+/week (75%)--were more likely to agree with this sentiment.

When asked to further define what elements define transparency, older generations (baby boomers and generation X) were more likely than millennial to focus on a complete list of ingredients, ingredients descriptions, and nutritional information. Millennials also focused on these indicators, but they were more likely than older generations to look at allergen information, certifications and claims, explanations of ingredient usage information, and other details such as animal welfare, fair trade, and labor practices.

"We see clearly that transparency is only becoming more important to consumers," said Patrick Moorhead, chief marketing officer for Label Insight. "Their attitudes and preferences, particularly with the growth of e-commerce, make it clear that transparency is critical to growth and our industry must take action."

Nearly half (47%) of American households have someone on a diet or following a health-related program. These shoppers are even more likely to place a premium on transparency--61% will pay more for products that offer in-depth product information, versus 54% of general shoppers. When a label is not sufficient, these shoppers (89%) are very likely to seek out information elsewhere. Nearly half of this segment (47%) would be very likely to use a smartphone in-store to find additional information beyond what's available on the label and the shelf.

The study also found the presence of children in the home increased the desire for transparency. Shoppers with children are more likely to place greater importance on ingredient information, nutrition, and health benefits.

The study found 26% of shoppers purchased groceries online in the last 30 days. Yet this group represents a valuable demographic--they are more educated, have higher household incomes, and are more likely to have children under the age of 18. While millennials are disproportionately shopping online, they only make up 39% of online shoppers. Generation X (30%) and baby boomers (23%) also represent a significant portion.

Online grocery shoppers expect more product information (76%) when shopping online than if they were in a physical store; and 72% believe that getting product information is even more important when shopping online. Additionally, 81% are willing to switch to a brand that provides more in-depth product information, compared to 75% of general shoppers.

Research was based on an online survey of a random sample of 2,022 U.S. grocery shoppers who are 18 years of age or older.
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Title Annotation:Top of the News
Publication:Nutraceuticals World
Date:Nov 1, 2018
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