Discover how dairy brands can navigate declining impulse buying trends by aligning with consumer values and innovating in advertising. Will your brand adapt or fall behind?
Recent data from Nielsen IQ and Circana indicates a decline in Consumer Packaged Goods (CPG), which could be seen as a negative trend for the sector. However, MMR Research, a trusted authority in the field, suggests that these figures might be concealing significant macro shifts in shopping behavior. Andrew Wardlaw, a prominent figure at MMR, speculates that global economic pressures and a surge in intentional living are fundamentally altering how consumers approach their purchases.
Andrew Wardlaw’s insights are instrumental in understanding the evolving consumer behavior. He suggests that consumers, in contrast to the impulsive buying patterns of the past, are now more likely to make deliberate and thoughtful purchases that align with their lifestyle and values. This shift is leading to a decline in traditional impulse purchases. As Wardlaw puts it, “A convergence of macro dynamics is not particularly conducive to impulsive shopping, which means that brands will need to innovate to reignite demand.”
The dairy industry is a clear example of a sector grappling with the impact of changing consumer behavior, particularly the decline in impulse purchasing. Factors such as evolving lifestyles, the dominance of e-commerce, and the lingering effects of the pandemic have all contributed to this shift.
“To maintain growth and consumer loyalty, brands can no longer rely on old methods. What’s necessary is an innovative approach—one that blends impulse with intention, crafting a shopping experience centered around the consumer’s needs and values.”
Adapting to this new landscape isn’t easy, but brands can turn the tides and make a comeback with the right strategies.
Understanding the Decline in Impulse Buying Trends
You may be aware that current data from both Nielsen IQ and Circana suggests a significant dip in the sales volumes of various consumer packaged goods. However, MMR Research suggests that these numbers merely hint at broader macro shifts in shopping behavior rather than spell doom for the CPG sector.
Andrew Wardlaw of MMR Research hints at a combined effect of global economic pressures and the emergence of intentional living as potential reasons for the slump in impulse purchases. According to his hypothesis, these broad trends create an unfavorable environment for impulsive buying behaviors, thus forcing different CPG categories, including dairy, to work harder and think strategically to rekindle consumer interest and spending.
In moments like these, you, whether you’re a small dairy business owner or the head of a large consumer goods company, need to use your understanding of the markets and consumers to devise effective strategies to navigate these changes. These could range from shifting focus to products less dependent on impulse buying to exploring novel advertising methods – the key lies in aligning with the evolved buying behaviors of today’s consumers.
Unveiling the Rise of the Intentional Consumer
With societal shifts leading to an increase in purposeful buying, we see a significant rise in the ‘intentional consumer.’ This change is something that brands must acknowledge and adapt to. Intentional consumers are thoughtful about their purchases, often considering factors such as product quality, sustainability, and a brand’s ethos before deciding. They’re also more likely to align themselves with brands that resonate with their values- wellness, environment, or self-expression.
Andrew Wardlaw from MMR Research explains that the pressures of the global economy, combined with intentional living, are currently reducing impulse buying. This situation presents a compelling reason for brands to strategize differently to reignite consumer spending. It’s important for brands to recognize this change in consumer behavior and implement measures to attract these intentional shoppers.
Younger audiences, in particular, have shown significant tendencies towards intentional buying. They prioritize brands that reflect their personal values and beliefs. It’s crucial for brands to tap into this change, making it a focal point of their marketing and communication strategies. Understanding, aligning with, and promoting values that resonate with these customers can help brands create a solid connection, ultimately driving the much-needed demand.
In this new era, brands need to evolve alongside their customers. With customer preferences shifting from impulsive to intentional buying, brands should revisit their strategies to better meet the needs of intentional shoppers.
Effect of Inflation and Global Economic Pressures on Dairy Market
As inflation and global economic pressures persist, dairy sectors such as desserts and ice cream brands that are less linked to regular household restocking are likely receiving the brunt of the shift towards less impulsive consumer buying. Andrew Wardlaw, a representative from MMR Research, conjectures that a general decline in impulse purchases is prompting these categories to enhance their efforts to spark demand.
One contributing factor is the rise of the ‘intentional consumer,’ those individuals who are more deliberate and thoughtful in their purchasing decisions, often due to economic pressures or lifestyle shifts. Brands need to be aware of these shifts and adopt strong strategies to appeal to these consumers effectively.
For example, products need to align with shopper values more than ever before, particularly when it comes to younger audiences. This aligns with the rise of intentional living, as these customers often choose brands that resonate with their beliefs and principles on important topics such as wellness, sustainability, and self-expression.
Many brands have reached out with new initiatives in response to these pressures. For example, Unilever’s Magnum ice cream range now promotes ‘mood shifts’ with its products, while Danone’s Two Good Yogurt brand focuses on charity initiatives alongside its functional benefits. These tactics provide examples of the pivots needed for dairy brands to survive and thrive in this challenging market landscape, suggesting the need for further innovation and customer-focused strategies to reignite demand and foster growth.
Adding Value to Dairy: Aligning Brands with Evolving Shopper Values
Brands will need to connect more profoundly with the shifting values of shoppers to solidify their market position. Notably, wellness, environment, and self-expression have become significant points of focus. This aligns seamlessly with the values of the younger generation, who habitually seek for brands that mirror their principles. In particular, these intentional consumers are making more calculated decisions based on their convictions rather than instinctive buying choices.
Research insights indicate that younger shoppers show a strong inclination to purchase dairy products such as cheese, ice cream, milk, and yogurt on purpose, especially when they perceive these brands as aligning with their core values. This shift provides an excellent opportunity for the dairy industry to affect change by redefining its strategies and focusing on value-added offerings.
This underscores the need for the dairy industry to recognize the current value shifts and ensure that these are well-reflected in their brand narratives. As the role and identity of dairy manufacturers change with new technologies, there is a pressing need to anticipate and meet consumers’ expectations.
There is also a lot to learn from a study by JDS Communications, which revealed that education about dairy nutritionled to a significant increase in dairy food purchasing and consumption in the United States. This suggests that a focus on consumer education, particularly surrounding the nutritional benefits of dairy products, may promote an increase in intentional dairy purchases.
Creating a strong connection with consumers requires brands to resonate with their values and aspirations, leading to more than just an impulse purchase but building a long-term brand relationship.
Case Study: How Magnum Ice Cream and Two Good Yogurt are Winning in the Intentional Market
Dairy, desserts, and ice cream categories appear to bear the brunt when shoppers steer clear of impulse buying. Wardlaw suggests that brands in these areas need to realign their strategies to echo the evolving consumer values. These could be anything from wellness and environment to aspects of self-expression. The new-age customer is no longer satisfied with just the product; they are more interested in what the brand stands for.
The story behind the success of brands like Magnum Ice Cream and Two Good Yogurt from Danone is the perfect illustration. These brands have managed to turn the tide by infusing intentionality in their previously impulse-driven offerings. They have consciously woven advocacy for causes that matter to their consumers into their business ethos – a move that strongly resonates with the rising league of intentional shoppers.
These brands have effectively transitioned from merely satisfying cravings to addressing issues of importance to their consumers, thereby creating a deeper, more meaningful relationship with them. It’s a monumental paradigm shift – a switch from impulsive purchases based solely on immediate gratification to intentional purchases dictated by a combination of need, value alignment, and brand loyalty.
Navigating the Market: Use of Nutrition and Health Benefits in Dairy
When it comes to creating appealing dairy products in line with today’s consumer trend of intentional shopping, there might be a silver lining in prioritizing nutritional and health benefits. This would be particularly relevant in response to the health-conscious wave sweeping over the buying populace. With challenges posed by the advent of weight-loss aids like Ozempic and mounting pressures from regulators on food products loaded with fat, sugar, and salt, consumer tastes are changing rapidly. Therefore, traditional ‘crave-able’ foods might cease to be as desirable as they once were.
Andrew Wardlaw implies here that the industry could benefit from enhancing its offerings’ nutritional density. This would act as a crucial counteractive strategy to meet consumers’ shifting preferences and overcome the threat posed by ‘crave-able’ foods by Ozempic.
As Wardlaw puts it, “We might just witness a surge in ‘smaller but better’ innovation, where the emphasis would fall on improving the nutritional density. Our research indicates that nutritional density and diversity can stir strong consumer motivation.” But, he notes, “These elements are mostly underrepresented in the industry. Here lies an untapped opportunity ripe for the taking.”
Diverse Advertising Strategies and What They Entail
Given this shift in consumer behavior towards intentional shopping, brands must adapt their advertising strategies to stay relevant. In this ‘low-attention economy’, where traditional forms of advertising are witnessing a decline in their effectiveness, it’s time to shift gears. New disruptive advertising formats could hold the key. Yes, we are talking about immersive audio-visual experiences or even innovations in texture and flavor that can captivate consumers.
What’s vital here, according to Wardlaw, is the enhancement of mental availability among shoppers. Traditional advertising might not necessarily cut it. The need of the hour is to revamp product experiences in such a way that they make a lasting impression. So, think more along the lines of memorable brand interactions, encounters that keep shoppers engaged and coming back for more. Wardlaw asserts, “Maximising mental availability with shoppers requires a deep dive into renovating product experiences to make them more memorable.”
The Ice Cream Market Continues to Thrive Despite Behavioral Shifts
Even with the evolution of consumer behavior, the ice cream market shows no signs of slowing down. In the United States alone, growth projections indicate an annual surge of 5.10% from 2024 through 2028, as revealed by Statista. But it’s not just about America. Across the pond, there’s also a rather promising scenario. The British have been steadily increasing their consumption of ice cream, yogurt, and desserts, highlighting the enduring appeal of these treats.
Besides, a 2022 Kantar survey pointed out a telling statistic: more than four million UK residents indulge in ice cream at least once a week. And a strong 3.3 million of them do so two to three times every week, underlining the ingrained habit of enjoying these delights.
Incidentally, the European Union isn’t far behind, with a 5% boost in ice cream production in 2022. Unsurprisingly, the top three contributors by volume were Germany, France, and Italy. This paints a vibrant picture of a market moving forward, seizing the burgeoning opportunities amidst the changing consumer landscape.
The Bottom Line
In conclusion, the dairy industry needs to adapt to the evolving shopping behavior marked by an increase in intentional buying. This may involve ensuring that products align with consumers’ values on health, the environment and other key areas. Additionally, brands must learn to communicate effectively with consumers, particularly the younger generation, and adapt new, disruptive formats of advertising to elicit action and remembrance. Lastly, dairy brands must offer more than just an impulse buy, but a product that positively changes consumers’ lives, whether through health benefits or socio-economic contributions. The future of dairy lies in adding intention to the impulse.
