MarketingProfs

Here was a great statement in a recent Reuters article, Food makers look to health as downturn defense: “Industry giants such as Kraft, General Mills, Sara Lee, ConAgra, Unilever and Danone all told the Reuters Food Summit in Chicago that healthy products were on top of their menus in insulating themselves from the U.S. economic malaise as they showed much higher growth than more traditional selections.”

It’s no surprise that given the strength and meteoric growth of natural and organic food products, the largest mainstream food companies are jumping on the bandwagon. Consumer demand is driving cleaner foods. That means lower fat, less sugar, less salt, less processing, fewer artificial ingredients, fewer preservatives. Just think LESS.
Even with the rise in commodity food prices, higher-priced healthier options are perceived as having a distinctively higher value, and that’s important when we come into weak economic cycles. Translation: consumers will plunk down the money to buy better when times get tough.
As the article states so well: “The emergence of so-called health and wellness foods with lower fat, sugar and salt are aimed at keeping consumers buying premium brands even amid the escalating credit crisis, high fuel prices and housing meltdown.”
* Kraft Foods reported that its “better for you” foods are growing two to three times faster than its other food lines. According to Kraft North America President Rick Searer: “Health and wellness is a priority.”
* General Mills is on a “health and wellness drive”. All of its breakfast cereals contain whole grains. Its Progresso soups feature many low sodium choices. Its Yoplait yogurts now contain vitamin D.
* Sara Lee noted that “. . .so far, volumes have not suffered and consumers have not been shifting to cheaper products.” COO of North American Operations, C.J. Fraleigh: “If we sell more whole grain bread and reduced-fat meat, it does benefit us, as these products are high margin and growing quickly.”
* ConAgra Chief Executive Gary Rodkin: “Seventy-five percent of our research and development is into health and wellness, where we have a robust pipeline.”
* The U.K.’s Unilever noted it has been “cutting out fats, sugars and salt from foods as a way to bolster its health and wellness lines”. Bauke Rower, Wenior VP of Foods for the Americas: “The long-term trend towards better food and people looking after themselves is here to stay.”
* France’s Danone cited that the health benefits of its recent introductions of two probiotic products with live bacteria: Dannon DanActive and Activia should mean “strong revenue growth.” Even with two price hikes since last August, Danone Chief Executive Juan Carlos Dalto: “We are very optimistic we will see nice double-digit growth in the years ahead in North America.” Even though these two products cost 10-30% more than other yogurts.
On the face of it, this trend is hugely beneficial to consumers, who are clamoring for “cleaner” foods. Of course, that comes at higher prices.
Questions:
* How do you feel about the move of the major food companies to healthier foods? Are you willing to purchase them even though prices are higher?
* Do you think healthier foods are worth more?
* How do you feel these companies are doing in getting the word out about offering healthier food choices via their marketing and advertising?
I’d love to hear from you.