Recalculating the Value Proposition
Drawing on 27 years of dedicated experience in the food industry, William Jennings leads First Fresh Foods as CEO.
The consumer view of the value proposition was at one time fairly simple and straightforward: “Is the product quality and quantity equal to or greater than the price I am paying for it?”
But with the advent of healthy eating, socially conscious brands and more recently niche, artisanal products that have found a national audience online, that equation has grown much more complex.
Today, where a product is made, how it is made, who is making it, what is its impact and how healthy it is — in addition to the traditional factors of quantity and quality as compared to price — are all driving new considerations made by the consumer of the value proposition. These newer, evolving factors are disrupting the value proposition in a way that presents both opportunities and challenges for the food industry,
According to the 2015 Deloitte survey, “Capitalizing on the shifting consumer food value equation,” about half of consumers surveyed indicated that they weigh health and wellness, safety, social impact, experience and transparency more heavily than traditional drivers. Because of this shift in values, an opportunity has opened for retailers and manufacturers to determine where their products will live in this equation.
In essence what has occurred is that the concept of value has become fragmented and more complex in the consumers’ mind. Where once value was simply delivery of a specific brand promise — or at least perception of delivery of a brand promise — “it tastes good,” or “it cleans well” or “it refreshes,” etc., now, there are a whole host of brand requirements that need to be satisfied for consumers to determine that value is being received — and many of them are universal and cut across product categories.
Additionally, some of these relate not to product experiences, but to what extent product use implicate — by extension — the consumer in social or environmental impact. Consumers now calculate value on not just delivery of brand promise, but on the product’s impact on health, the environment, society and even in the desire for authenticity.
So how can brands ensure that they are speaking directly to and connecting with this new value equation?
A few examples:
- Health and wellness: Companies should be reviewing their labels and assessing if their product can meet these new concerns and requirements from consumers such as gluten-free, antibiotic free, natural, etc.
- Safety: This links with health and wellness very closely so brands need to match their labels with actual ingredient content.
- Social impact: A growing movement, but if activated and vocalized can have the deepest impact on public opinion. Look how closely GMO usage or tainted food can spread and tarnish a company’s brand (Chipotle, Monsanto, etc.).
- Experience: This must be authentic and if it includes everything along the path to purchase it can elevate satisfaction, trust and loyalty.
- Transparency: Providing access to all relevant information and ongoing authentic engagement with consumers.
To compete, brands must understand the new value proposition and recalculate how these new consumer habits will impact pricing, profitability and the new normal.