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Kwan Ho Lee
Posted in January
Research by Kraft
Leads Creative Meal Solutions

By Jack Grant

The economic downturn has spawned new shopping behavior by consumers. Most of them
now realize that selecting groceries and developing meals can never be the same. They are getting down to basics by buying more private label goods and looking for value among
branded products.

The major food marketers are quickly figuring out how to respond to these needs. For example, Kraft Foods has doubled its investment in shopper marketing in the last year and is mining shopper insights to develop new meal solutions in stores. It is helping retail partners by co-developing differentiated in-store programs that provide value to shoppers during the recession.

“This economic cloud has a sliver lining,” said Diane Tielbur, senior director, CIS, KNA at Kraft. 
She referred to insights that Kraft has gleaned from recent research, which trace how consumers have changed their attitudes for the better. She outlined these stages in a presentation in Chicago at a private label conference hosted by the Institute for International Research (IIR).

According to Tielbur, consumers have been on a four-part journey during the current recession:

  • Awareness  Life has changed. This stage took root when home values began    to decline and unemployment inched up. The changes around the country          became personal. 
  • Anxiety Money is not going as far as before. Low-level panic began to set in as hard choices had to be made. Retirements and major purchases were being postponed. Plummeting investments fueled this stage. 
  • Retrenchment  Limits on spending have caused lifestyle changes. Dining out declined as cooking more at home became the obvious alternative. Trade-offs became trendy. For example, pizza delivery gave way to bringing home a frozen pizza from the grocery store.
  • Bright Siding  Look for the bright side in bad situations. This current stage of resourcefulness has consumers discovering new priorities and advantages from living a simpler life.
    •

According to Kraft research, six of ten consumers (61%) say the recession has permanently changed their attitudes, while seven of ten (72%) plan to use their new shopping strategies even when the economy improves.

Consumers are more resourceful, according to Tielbur. For example, they are eating at restaurants less and even “eating down” by using what’s already in the pantry rather than buying replacement products before current stock is depleted. 

Kraft knew that it needed to keep track of the stages that consumers would be going through because of the recession. This enabled the company to modify its marketing programs to suit the new environment. 

Tielbur told CPGmatters that results of the research led to a new collaboration between Kraft and certain major retailers already promoting their house brands to recession-hardened shoppers trying to stretch their grocery dollars. She referenced co-marketing with Wegmans in its weekly circular.

In addition, CPGmatters has learned that Kraft has developed customized programs with such major customers as Publix, Safeway, HEB, Meijer, and others. The programs range from simple meal solutions such as Meijer’s Lunch Spot which group everything needed to make a really great meal with a sandwich.  Kraft offers recipes and dinner suggestions via links between retailers’ online communities and Kraft.com. 

In solo promotions, Kraft published “50 Great Ways to Save Money, Time and Energy” in its Food and Family magazine. Its “One Bag, Five Dinners” program showed shoppers how to make five dinners with one bag of groceries. Kraft urges shoppers to visit Kraft.com and as well as dabbling in apps on the i-Phone and i-Food.

Kraft’s new focus on shopper marketing has coincided with this new wave of frugality in the last 18 months. The marketer has in place promotions with top customers in 2010 that leverage larger events like major sporting events,   Back-To-School and national holidays, as well as platforms such as convenient meals and simple sandwiches. Kraft continues to tie into a retailer’s Frozen Food Month and Dairy Month promotions.  

While Kraft has been focusing on solutions with its top customers, the marketer welcomes working with retailers of all sizes. This collaborative approach is paying off with improved trade relations as both partners aim to provide meal solutions to a common customer. Kraft aims to customize its programs so they are differentiated.  
 

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