In Search of Value

Consumers weigh choice, quality and economy in everything from snacks to smokeless.

By
Samantha Oller, Senior Editor/Special Projects Coordinator

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According to research from Symphony IRIGroup, consumers are no longer married to one or two preferred channels as they search for value. Instead, 44% say they select stores to shop where price answers a “need” factor. But value is not necessarily centered on price alone; rather, it is a balance of choice, quality and economic prudence, evident in multiple categories in 2012:

Snacks and candy: Value-driven consumers see bigger as better when it comes to sweet snacking, says Cassandra Matos, confections category manager for McLane Co. Inc., Temple, Texas.“We’re still hearing about good opportunities when retailers promote king. That’s definitely where the growth is, “Matos says, pointing out that prepriced and mini-bottles present an opportunity in gum.

“If that consumer still perceives the price of a pack of gum is too high and not a value, they will not trade up and become a loyal long-term user,” she says.“The most important thing is making sure the retail price is a perceived affordability or a perceived value.”

Beverages: Look no further than beer, where c-store sales growth in the less-expensive domestic premium and subpremium segments lagged behind super premium, imports and craft. And consider the growth in sales for water enhancers such as Dasani Drops and MiO, which enable consumers to tailor a product to their preferences. However, sales of sweetened and enhanced waters continue to slump, according to Symphony IRIfigures.

Tobacco: In smokeless, c-store sales of portion-pouch sales grew by double digit percentages in 2012, and 12- to 16-ounce tubs of moist smokeless also gained, according to SymphonyIRIdata.“With high state excise taxes and a difficult economy driving consumers to seek everyday value in tubs, these businesses combined should account for at least half of total MST category can growth over the next two years,” says Joe Teller, director of category management for Swedish Match North America, Richmond, a., who also points out that that multi-stick foil pouches will be the lone growing package type in cigars.

General merchandise: As manufacturer shortages continue to work their way through the system, retailers are finding some opportunity in private label products. Perhaps the greatest benefit is when generic products are paired with equivalent national brands, says Beth Noteman, national accounts manager for Lil’ Drug Store Products, Cedar Rapids, Iowa. Retailers are able to offer customers better value while pulling in greater profits with private-label products, she says.

Foodservice: “Meal deal” traffic is down in restaurants, according to research by The NPD Group Inc., Port Washington, N.Y., because these deals no longer resonate with consumers who also don’t want to be locked in on choices, says Bonnie Riggs, restaurant industry analyst.

“They are very, very concerned about value,” she says. “Value is not about the cheapest price but about meeting their expectations of value, fresh ingredients and quality food. If you have something you’re selling for $1 and it doesn’t taste good, in the consumer’s mind it’s not worth $1.”

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