"Hybrid Consumers" Polarize Food Industry

The rise of the 'hybrid consumer' is an emerging trend with significant implications for food companies, food retailers and food service companies, concludes a report from the reseaarch firm Rabobank. The report documents how consumers are becoming less interested in mid-market products and are instead trading down when it comes to everyday value-for-money items, such as basic groceries, while trading up to premium, high-end products that matter most from an emotional and social perspective, such as premium brands in supermarkets and fine dining. As a result of this trend, the food retail sector will become increasingly polarised into value and premium, with middle ground players struggling to retain market share, the report concludes.

The report attributes several demographic, economic and cultural factors for this development, including the proliferation of discounted options, the effect on the internet on price shopping and the global recession that has forced consumers to be more price conscious while still occsionally indulging themselves at an affordable cost.

The report offers several suggestions to food retailers for how they might accommodate this phenomenon, and they apply equally as well to onsite foodservice providers. They include...

Move up to the premium segment of a specific product category. For example, by offering healthier alternatives, using more natural ingredients and incorporating corporate social responsibility as well as sustainable business practices.

Offer 'value' products within the premium segment and 'premium' products within the value segment. By doing so, operators can cater to consumers who have become more cost-conscious due to waning consumer confidence and purchasing power.

Use value products to sell premium products. Operators can use this strategy to attract customers with value-for-money propositions while simultaneously aiming to sell premium, more expensive products to these same customers. A well known UK-based coffee chain, for instance, offers coffee to-go at relatively low price points to generate traffic and simultaneously aims to sell higher priced food products, such as premium sandwiches.