Deloitte's new report on fresh foods shows that shoppers are interested in sustainability but aren't necessarily driven by other attributes, like organic or non-GMO.
Consulting firm Deloitte is out with some fresh insights on fresh foods. According to its latest report, "Fresh Food at the Intersection of Trust and Transparency,” consumers are willing to pay more for what they see as high quality fresh foods but think that some of the prices they are seeing are too high.
The research shows that 68% of shoppers will pay a premium for fresh foods, up 7% from last year despite lingering macroeconomic concerns. Perhaps reflecting those concerns, at least 80% of customers and grocers think that food suppliers have raised prices more than necessary “to increase their profits.” The threshold between demand and price is evident in another data point showing that only 10% of grocers think that their fresh food suppliers were raising prices to keep up with rising costs.
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Beyond price, respondents shared their sentiments on the value of fresh foods. From a sheer enjoyment perspective, 91% of shoppers said that fresh food makes them happy. Wellness is also a perceived benefit, as an overwhelming 83% of consumers said that fresh food minimizes the risk of chronic health conditions and disease and contributes to weight loss.
Survey participants likewise value certain production aspects of fresh food. To 30% of consumers and 36% of grocers, ESG claims matter the most in the fresh department. Upwards of 80% of shoppers prefer to shop at retailers that source food from local farms, and 39% want more data on how fresh food gets from the farm to the store.
Still, shoppers may not be as interested in some fresh food attributes as retailers might think. According to Deloitte’s report, grocers appear to overestimate the importance consumers place in the purchase drivers of organic (+47 percentage points) and non-GMO (+31 percentage points).
"As price continues to be at the top of everyone's grocery list, the health and wellness benefits of fresh food are clear. However, the industry may be overestimating the importance of other purchase drivers. Understanding consumer behavior and preferences when it comes to organic, locally grown and sustainably sourced fresh food can help grocers differentiate themselves from the competition, not just on price, but as a trusted source of information,” said Daniel Edsall, global grocer leader, and principal, Deloitte Consulting LLP.
On that note of competition, whatever factors are driving shoppers’ belief that fresh foods make them happy and their propensity for spending on such items, grocers understand that these categories are increasingly essential to their business. Two-thirds of grocery retail executives polled said that fresh food is the most strategically important department for their sales growth plan over the next one to three years.