More Room at the Table for Recognizable Ingredients

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More Room at the Table for Recognizable Ingredients

By Meg Major, EnsembleIQ - 12/16/2016

As a new year beckons, end-of-year countdowns have been flowing freely across the wires, with top food forecasts factoring heavily in the medley of annual roundups.

While many of today's so-called top trends prove to be tomorrow’s clichés, there’s one that stands out in my book as being most influential for years to come: recognizable ingredients. My view on the increasingly important role that trusted, recognizable ingredients will continue to play in the grocery industry is affirmed by new research that finds many folks willing to put their money where their aspiring mouths want to go.

Nearly three-quarters (73 percent) of consumers said they’re happy to pay a higher retail price for a food or drink product made with readily recognizable ingredients, according to a survey of 1,300 consumers across North America, Europe and Asia-Pacific by Ingredient Communications. Further, more than half of respondents (52 percent) said they would spend over 10 percent more on foods and drinks that contained trustworthy ingredients, while nearly one-fifth (18 percent) said they would pay 75 percent or more extra.

Overall, more than three-quarters of respondents (76 percent) said they would be more likely to buy a product that contained ingredients they recognized and trusted.

In addition to underlining the growing importance of clean, clear labeling and the use of familiar ingredients, the findings of the global survey also suggest that there's a significant opportunity to harness the potential of co-branding between food and beverage manufacturers and their ingredient suppliers.

“Co-branding of ingredients in the food and beverage industry is still fairly unusual, yet our survey suggests it would resonate with many consumers,” notes Richard Clarke, director of London-based Ingredient Communications. “We have seen the power of the ‘Intel Inside’ concept in the home computer market. If it works for selling laptops, then why not food and drink?”

Moreover, co-branding can further foster “consumer trust and provide a clear signpost for differentiation,” which Clarke said “can be converted into higher spend, loyalty and repeat purchases. Marketing finished products that contain ‘branded’ ingredients that consumers recognize could be key to commanding a substantial price premium in-store.”

While a key barrier to co-branding “is a perception among food and beverage companies that it reduces their ability to shop around among suppliers of raw materials to achieve the best price,” Clarke believes that "with consumers’ willingness to pay such large price premiums for products made with ingredients they know, this factor might easily be offset by increased sales and profits.”

Interestingly, consumers in the United States were willing to pay the highest prices – with 44 percent of survey participants saying they would pay 75 percent or more extra for ingredients they recognized and trusted. This was followed by consumers in India (32 percent), the Philippines (29 percent) and Malaysia (26 percent), indicating a strong preference for recognizable ingredients among consumers in Asia.

Although the survey results reveal significant convergence in the way that consumers across the globe share similar priorities in sourcing and consuming high-quality foods, there are also key differences between markets. “Willingness to pay more for recognizable ingredients is strongest in the U.S., highlighting the importance of clean and clear labeling” among American consumers,” added Neil Cary, founder of U.K. online research company Surveygoo, which conducted the market research project.

With branding and marketing taking on an ever-greater role in the fresh food domain –particularly produce – the survey’s findings speak volumes to the ripe opportunities I foresee for far more cross-branded products throughout the store. Examples that come readily to mind include genuine Idaho baked potatoes in the prepared food department; New York state Empire apple pie in the in-store bakery; fresh Wisconsin mozzarella for house-made pizza; grilled Alaska wild salmon for your made-to-order salad program; and California avocados and Florida-grown tomatoes as the exclusive key ingredients touted at your store’s salsa and guacamole bar.

Giving shoppers an ability to readily recognize ingredients in your store’s signature offerings, with the quality and taste characteristics that are indigenous to specific growing and production regions, will not only quickly convey a high-quality message, but will also impart true differentiation through your signature products while helping the brands shine brighter in their customary departmental homes.

Happy, healthy selling in 2017!