Affluent Consumers in the New Economy: Food and Foodservice

Published by: Packaged Facts

Published: Jul. 1, 2009 - 54 Pages

Table of Contents

Chapter 1: Affluent Consumers in Context

Scope and Methodology of Report

The Economic Context

Figure 1-1: Quarterly Personal Consumption Expenditures on Food, 2006-2008 (billions of dollars and percent change)

Figure 1-2: Consumer Price Increases for Food, Food at Home, and Food Away From Home: May 2008 through April 2009 (percent increase)

Figure 1-3: Consumer Distribution Based on Change in Financial Situation, Q3 2008 to Q1 2009 (percent of U.S. adults)

The Affluent Consumer

Figure 1-4: Affluent Consumers: Largest Demographic Blocs, Q3 2008 to Q1 2009 (percentages, number, and index)

Figure 1-5: Affluent Consumers: Top Demographic Indicators, Q3 2008 to Q1 2009 (percentages, number, and index)

The Affluent Consumer and Financial Change

Figure 1-6: Consumer Distribution by Economic Cohort and Change in Financial Situation, Q3 2008 to Q1 2009 (percent)

Figure 1-7: Patterns by Age Bracket: Financially Worse Off Affluent Consumers, Q3 2008 to Q1 2009 (percent and index)

Figure 1-8: Metro Area Patterns: Financially Worse Off Affluent Consumers, Q3 2008 to Q1 2009 (percent, number, and index)

Figure 1-9: Live Events Disproportionately Experienced by Worse Off Affluent Consumers, Q3 2008 to Q1 2009 (percent, number, and index)

Figure 1-10: Selected Demographic Indicators: Financially Better Off Affluent Consumers, 2008 to Q1 2009 (percent, number, and index)

Financial Change and Financial Insecurity

Figure 1-11: Consumer Distribution by Economic Cohort and Sense of Financial Security, Q3 2008 to Q1 2009 (percent)

Figure 1-12: Affluent Consumer Indexes for Agreement or Disagreement with Statement, “I Feel Financially Secure”: Selected Demographics, Q3 2008 to Q3 2009 (index)

Chapter 2: Food Psychographics & Financial Change

Grocery Spending Patterns and Skews

Figure 2-1: Average Weekly Household Grocery Expenditures: By Economic Cohort, Q3 2008 to Q1 2009 (percent)

Figure 2-2: Average Weekly Grocery Shopping Expenditures Among Affluent Consumers: By Change in Financial Situation, Q3 2008 to Q1 2009 (percent)

Financial Changes and Organic/Natural Foods

Figure 2-3: Agreement Among Affluent Consumers with Statement, “When Shopping for Food, I Especially Look for Organic or Natural Foods”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index)

Figure 2-4: Agreement Among Affluent Consumers with Statement, “When Shopping for Food, I Especially Look for Organic or Natural Foods”: By Change in Financial Situation, Q3 2008 to Q1 2009 (percent)

Financial Setback and Doing the Right Thing

Figure 2-5: Ethical Consumption Psychographics: Affluent Consumers by Change in Financial Situation, Q3 2008 to Q1 2009 (percent)

Financial Changes and Health/Nutrition Consciousness

Figure 2-6: Agreement Among Affluent Consumers with Statement, “I Work at Eating a Well-Balanced Diet”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index)

Figure 2-7: Agreement Among Affluent Consumers with Statement, “I Prefer Foods Without Artificial Additives”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index)

Figure 2-8: Agreement Among Affluent Consumers with Statement, “I Think of the Calories in What I Eat”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index)

Figure 2-9: Agreement Among Affluent Consumers with Statement, “I Am Currently Dieting”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index)

Figure 2-10: Agreement Among Affluent Consumers with Statement, “I Usually Only Snack on Healthy Foods”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index)

Financial Changes and Food Adventure

Figure 2-11: Agreement Among Affluent Consumers with Statement, “I Enjoy Eating Foreign Foods”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index)

Figure 2-12: Agreement Among Affluent Consumers with Statement, “I Prefer Foods Cooked With Lots of Spices”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index)

Figure 2-13: Agreement Among Affluent Consumers with Statement, “I Really Enjoy Cooking”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index)

Figure 2-14: Agreement Among Affluent Consumers with Statement, “I Look for the Freshest Ingredients When I Cook”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index)

Figure 2-15: Agreement Among Affluent Consumers with Statement, “I Like to Try New Recipes”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index)

Figure 2-16: Agreement Among Affluent Consumers with Statement, “I Like to Try New Drinks”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index)

Figure 2-17: Agreement Among Affluent Consumers with Statement, “I’m Usually The First to Try New Health Foods”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index)

Monthly Usage Patterns for Foodservice

Figure 2-18: Monthly Usage Patterns for Chain Fast Food and Family Restaurants/Steakhouses: By Economic Cohort, Q3 2008 to Q1 2009 (percent)

Figure 2-19: Monthly Usage Patterns for Chain Fast Food and Family Restaurants/Steakhouses Among Affluent Consumers: By Change in Financial Situation, Q3 2008 to Q1 2009 (percent)

Fast Food Psychographics

Figure 2-20: Agreement Among Affluent Consumers with Statement, “Fast Food Fits My Busy Lifestyle”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index)

Figure 2-21: Agreement Among Affluent Consumers with Statement, “I Like the Trend Toward Healthier Fast Food”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index)

Figure 2-22: Agreement With Statement, “I Prefer Fast Food to Home Cooking”: By Economic Cohort, Q3 2008 to Q1 2009 (percent)

Figure 2-23: Agreement With Statement, “I Eating Fast Food Helps Me Stay Within Budget”: By Economic Cohort, Q3 2008 to Q1 2009 (percent)

Chapter 3: Competitive Implications

Demand for More, not Less, from Groceries

Figure 3-1: Weekly Household Grocery Expenditures: Affluent Consumers, 2004 to Q1 2009 (percent)

Grocery Shopping Outside of Supermarkets

Figure 3-2a: Usage Rates for Selected Grocery Retail Channels and Chains: Affluent Consumers, 2004 to Q1 2009 (percent)

Figure 3-2b: Usage Rates for Selected Grocery Retail Channels and Chains: Other Consumers, 2004 to Q1 2009 (percent)

Figure 3-3: Affluent Consumer Usage Rates for Selected Grocery Retail Channels and Chains: By Change in Financial Situation, Q3 2008 to Q1 2009 (percent)

More Openings for Store-Bought Meals

Figure 3-4: Share of Frequent Users of Store Meals: Affluent vs. Other Consumers, 2004 to Q1 2009 (percent)

Restaurants Fight the Home Court Advantage

Figure 3-5: Use of Chain Restaurants: Affluent Consumers vs. Other Consumers, Q3 2008 to Q1 2009 (percent)

Figure 3-6: Percent Agreeing With Selected Fast Food Psychographic Statements: By Economic Cohort, Q3 2008 to Q1 2009 (percent)

Figure 3-7: Affluent Consumer Indexes for Agreement With Survey Statement, “I Like Trend Toward Healthier Fast Food”: By Selected Age and Regional Demographics, Q3 2008 to Q1 2009 (index)

Marketing in a Subprime Economy

Coupon Use on the Rise

Figure 3-8: Use of Coupons for Food Spending: Affluent vs. Other Consumers, Q3 2008 to Q1 2009 (percent)

Figure 3-9: Use of Coupons for Food Spending: Affluent Consumers by Change in Financial Situation, Q3 2008 to Q1 2009 (percent)

Affluent Consumers Migrating to the Internet

Figure 3-10a: Shopping-Related Use of the Internet: Affluent Consumers, 2004 to Q1 2009 (percent)

Figure 3-10b: Shopping-Related Use of the Internet: Other Consumers, 2004 to Q1 2009 (percent)

Figure 3-11: Shopping-Related Use of the Internet: Affluent Consumers by Change in Financial Situation, Q3 2008 to Q1 2009 (percent)

Abstract

The economic turmoil that reached crisis level in fall 2008 has been a bull in the china shop of American consumer behavior, even for a market as fundamental as food. Food spending, fueled by price increases but dampened by consumer cutbacks, took on a volatility that matched the chaotic economic trajectories of American consumers. Even within the affluent cohort of upscale-to-affluent U.S. adults ($75K+ individuals; $100K+ households), as of first quarter 2009, nearly a fifth described themselves as significantly worse off than they were a year ago, and nearly a fourth described themselves as somewhat worse off..

Focusing on this upscale-to-affluent U.S. cohort, Affluent Consumers in the New Economy: Food and Foodservice examines how responses to economic turmoil are affecting consumer demand for food products and chain restaurant services. Notably, for example, affluent consumers who have taken a financial hit are more likely to shop for organic and natural foods, and are more sensitized to ethical consumerism issues. In addition, affluent consumers whose financial situation has recently worsened or improved show higher levels of health and nutrition consciousness, as well as a keener taste for food adventure. In an era of widespread economic turmoil, such psychographic responses to financial setback and financial recovery will shape and transform consumer spending on food.

The effects of economic turmoil are being seen not only in which types of food products consumers are buying, but in which retail channels and chains they are flocking to. Although affluent consumers remain less likely than the rest of the population to shop at Walmart supercenters, they are shifting to Walmart at above-average rates, making supercenters an ever-bigger part of the equation for marketers of affluent foods. At the same time, shopping patterns for Trader Joe’s and warehouse clubs show the heightened potential for adventurous but value-priced store brands among the affluent cohort.

The effects of economic turmoil are also presenting broadly felt and widely reported challenges to the foodservice industry. Even within the current environment, however, specific segments of affluent consumers are more receptive to healthy fast food and more likely to find that fast food fits their current lifestyles. Therefore, the true task for restaurants is to match supply to demand, rather than to create or maintain it. Successful foodservice strategies must accommodate generationally and regionally inflected economic contexts, food landscapes, nutritional psychographics, and consumer lifestyles.

Overall, consumers who have been set back or thrust forward financially are more likely to be thinking and rethinking about what they need, what they want, and how and where best to find it. For marketing and customer communications, as discussed in this report, more is now more.

Report Methodology

This report is primarily based on original research and analysis. The analysis of affluent consumer trends, demographics, and psychographics derives from custom extraction and cross-tabulation of data collected by Experian Simmons (New York, NY) in its Winter 2008/09 National Consumer Study (fielded from late July 2008 through late March 2009), which is based on 13,128 U.S. adult respondents. In addition, this report draws on recent Packaged Facts consumer market studies, as well as relevant data from various government, business, and trade sources.

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