L.E.K. executive calls attention to customer’s different insights with respect to food categories
Understanding that the assortment of a supermarket is dynamic and changes according to the different waves of consumer behavior is the key to obtaining success. This is the path pointed out by Fernando Fernandes, Partner and Leader of the office of L.E.K., in São Paulo, during his presentation on the first day of the APAS Show 2019 Management Congress.
One of the ways to “hack” growth is to understand how the categories are perceived by the consumer and to develop strategies based on these consumption drives. To give an example, Fernandes cites five consumption categories in relation to food, analyzed from L.E.K.’s own study.
Natural – with artificial ingredients, 100% natural, parameters of organic origin, non-transgenic, and clean label (absence of additives considered as undesirable by the consumer).
Ethical – classifies those produced locally, with no antibiotics or hormones, animals bred in freedom and products of fair trade origin;
Enriched – foods rich in proteins, healthy fats and antioxidants;
Foods with low content (or “low in”) – emerged in a post-boom period of the food industry, with reduction of ingredients perceived as food “villains”, like sodium, calories, fats, sugar and carbohydrates.
Alternative diets – more advanced groups in food trends and with low participation and absorption by the market, although they may represent a good investment potential. They include vegan products, vegetarians, gluten or lactose free or directed toward paleolithic diets.
Conducted initially in the United States and then in Brazil, the study indicates that, for the North American market, there is great preference of consumers for ethical and natural foods.
In contrast, in Brazil, enriched and natural foods have great appeal, with the consumer, accepting even to pay more for the value of these products a low perception in the United States, mainly due to the income difference factor. However, the similarity between the two countries is still the low share of the alternative diet segment, very related to lifestyle. “The Brazilian looks for foods with more pragmatic and perceptible effects,” Fernandes explains.
These new behaviors have provoked a series of changes in the market, mainly on account of the loss of share of the large industries in ultra-processed foods. To work around this situation, these companies undertake various acquisitions in an effort to introduce themselves within these categories, while other players invest in innovation so as not to lose margin and to cease serving these publics. Brands like Burger King with its vegetarian hamburger and the vegan pizzas of Domino’s are among the examples mentioned by Fernandes.
For the supermarkets, understanding these behaviors imply in investments in new channels, such as e-commerce and even in the new layout of the stores, as for example Pão de Açúcar which created the “fresh” session to provide more visibility to fruits, legumes and vegetables. “Assortment is the retail’s soul. It is alive; it evolves to cope with the transformations of the consumer’s behavior,” the executive concludes.