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Provenance in the cereal products Sector. Current issues and future opportunities. Contents. Introduction & objectives Research Sample Defining provenance and purchase drivers Who buys provenance? Identifying the provenance shopper Provenance in the cereal products category
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Provenance in the cereal products Sector Current issues and future opportunities
Contents • Introduction & objectives • Research Sample • Defining provenance and purchase drivers • Who buys provenance? Identifying the provenance shopper • Provenance in the cereal products category • Comparing cereal products with other categories • Cereal products and provenance attributes • The role of farmers within cereal supply chains • Provenance and organic cereal products • Cereal products, provenance and health • The hurdles for cereal products – brands & meal occasions • Provenance observations and opportunities across the cereal products categories • Summarising provenance opportunities
Introduction & Objectives The market for foods with provenance is evolving • Shoppers taking greater interest in food origins, with local food the most prominent form of food provenance “The number of shoppers buying locally produced food has almost doubled in the last three years to 27%, compared to 15% in 2006.” Source: IGD Consumer Unit 2009 • Provenance attributes are being used to build superior credentials and support sales “Products that can demonstrate quality and clarity of provenance, whether it be through geography, production methods or some other factor, are well placed to prosper.“ Source: “Britain’s Posh Nosh Passion Intensifies” http://www.igd.com/index.asp?id=1&fid=6&sid=25&tid=90&folid=0&cid=249
Introduction & Objectives • Across various categories, provenance is already impacting on consumer perceptions of food quality and taste “Shoppers motivated by better food quality and greater knowledge of the product.” Source: FSA Local Food Omnibus Research Report http://www.food.gov.uk/multimedia/pdfs/localfoodreport.pdf • Readily associated with local foods and organics, but much wider potential e.g. producer and/or place of origin; variety; production standards; regional speciality; environmental positives
Introduction & Objectives Provenance attributes are most apparent in the meat, dairy and fresh produce categories To date, the use of provenance across the cereal products sector has focused on supporting premium positioning and organic foods Current provenance use varies widely across the sector e.g. beer includes a large number of SKUs of regional specialities whereas cereal bars have few provenance-based product lines HGCA aims to: • Provide insight into this evolving market place • Identify how provenance relates to cereal products • Understand the provenance opportunities for the cereal products sector
Introduction & Objectives This research has used sales data to analyse shopper behaviour and to identify shopper groups who already buy into the wider provenance category It compared the types of shopper that buy specific products with provenance with those active in the overall parent category e.g. profile of shoppers who buy flour with specific provenance attributes versus the profile of flour shoppers in general The hypothesis is that shoppers who buy provenance in other categories will also be the most likely to buy cereal products that incorporate relevant provenance attributes Based on the profiles of these groups, focus groups were selected to research their shopping behaviour and interest in provenance in detail Quotes from focus group respondents are included in this report to illustrate the opinions and issues expressed throughout the primary research stage
Introduction & Objectives Researcher Comment This research has sought to identify possible building blocks for provenance and understand their relevance. The potential to incorporate provenance varies across cereal products. In addition, the ability of individual businesses to develop provenance will be impacted by their supply chain, scale and existing business practices. This report highlights the significance of provenance with different cereal product types, based on respondents’ feedback from across the focus groups, although the qualitative focus of research confines the capacity to produce a definitive hierarchy of specific attributes,
Research Sample 7 focus groups comprising of different lifestage and lifestyle • Family: aged 30-50, with at least one child under 16 still at home • Post family: aged 50-70, with no children under 16 Each focus group to consist of either urban or rural dwellers: • Rural – live in a market town, village or open countryside • Urban – live in a city/large town, town suburb General Research Criteria: • Main Shopper of the Household • Have an interest in where their food comes from • Shop at a mixture of supermarkets • Respondents from broad socio-economic classifications (ABC1C2D) Research not skewed to high income shoppers or upmarket retailers
Research Sample Research Stimuli As part of the discussion guide framework used across all focus groups, a range of products were used as stimuli to encourage debate. These included Waitrose Leckford Estate flour, ISB bread from Tesco & Sainsbury, Hill Farm oil, Walkers shortbread biscuits, Dorset Cereals, Quaker cereal bars, and Hook Norton beer. Through all focus groups, respondents also participated in interactive exercises. These used stimuli including flash cards with logos, products, and provenance specific messages in exercises to: • Map regions associated with cereal products • Group bread, breakfast cereal and flour products according to perceptions of provenance attributes
What is provenance? Oxford English Dictionary definition: • the origin or earliest known history of something • a record of ownership of a work of art or an antique Focus groups identified that provenance is a term not widely understood or recognised by respondents No clear definition of provenance was established in the focus groups Respondents are familiar, however, with a diversity of attributes that can be considered as providing provenance “Where it comes from originally, where it is produced and packaged and how it got to the shops.” Norfolk Rural Family “If any chemicals that have been used or haven’t been used, like pesticide use or environmental measures or it might have come from a traditional farm using old style techniques.” Lancashire Urban Family Specific attributes have wider appeal and relevance than the term provenance itself
Provenance attributes A range of provenance attributes were raised by respondents in focus groups Clearly, the relevance to cereal products varies across these attributes Applicable attributes and their relative significance to different cereal products are explored in more detail later in this report
Key provenance themes The provenance examples raised by respondents in the focus groups relate to a number of core themes: • Supporting the local community e.g. buying local or regional food, items with low food miles • How food has been produced e.g. to specific standards, using natural ingredients • Where food has come from e.g. named producer, assured supply chain • Environmental issues e.g. organic, welfare standards Specific attributes overlap across core themes, with organic a prime example. Respondents view organic as delivering environmental benefits, and also providing information on how a food has been produced and where it has come from.
Themes and reasons to buy Probing of attitudes through the focus groups identified that these core themes in turn translate to a range of purchase drivers. Purchase drivers and the respondent reasoning behind them are outlined below. It should be noted that overlap across the drivers, themes and reasoning was again observed. • Purchase drivers • Demonstrates standards • Shows transparency • Implies freshness • Supports rural economy/farmers • Demonstrates health • Provides food safety reassurance • Good for environment • Implies a tastier product Knowing the origin of a food provides me with reassurance on food quality Buying a food with natural ingredients will be healthier for me and the environment Buying local food indicates freshness, and implies a better tasting product Because a local food hasn’t travelled as far, I expect it to be cheaper. But I am willing to pay more for foods that I think are better quality I help my local community prosper through buying food locally
Lifestyle of provenance shoppers Provenance currently appeals to three distinct lifestyles (based on shopper sales analysis data), and these represent segments that are an initial target for cereal products with provenance Healthy Interested in foods that are ‘Good for me and/or good for the environment’ Shoppers of organic foods, Fairtrade and products that are low in fat/sugar • Traditional • Enjoy cooking from scratch, typically plan their weekly shop, value heritage and eat traditional meals (i.e. meals with a ‘meat and two veg’ focus – chops, stews, roast dinners, etc) • Will use a portfolio of shops to buy their food • Finer foods • Most likely to buy premium products, adventurous in their cooking and willing to experiment • High income but time-squeezed shoppers who are interested in where food comes from
Lifestyle of provenance shoppers These shopper types cover a broad social spectrum and this allows a number of observations (based on shopper sales analysis profiles) • Finer food shoppers are time squeezed and only visit a limited number of retailers. Therefore, the provenance option needs to be readily available in the places where they already shop (i.e. supermarkets) rather than rely on them visiting additional outlets • Traditional shoppers respond to the heritage or long-standing values surrounding a product or brand • Healthy shoppers’ interest in naturally produced foods gives potential for foods that demonstrate authenticity and traceability assurances
Lifestyle of provenance shoppers A note on lifestyle segments: • Analysis is based on a comparison of shopper types that buy specific cereal products with provenance with those active in the overall parent category Although initial targets, provenance in cereal products will not be limited to traditional, healthy and finer food segments In other food categories, we have seen food provenance emerge onto mass market products and gain mainstream appeal e.g. Walkers crisps use 100% British potatoes, Muller yogurt source 90% of milk from within thirty miles, increased use of grower imagery and details across all packaging types and not just premium lines The lifestyle of shoppers that buy into cereal products with provenance will evolve as more products develop and convey provenance attributes
Lifestage of provenance shoppers There is a clear link with lifestage and shoppers that are already buying cereal products with provenance • Tend to be older adults (adults aged 40-59) and pensioners • Typical tipping point after children leave home • Post-family shoppers most likely to have the time (and money) to buy different foods and ‘shop around’ and venture beyond the supermarket “I shop in Tesco, M&S but there’s also two local farm shops and I like to buy my stuff in there when I can. One of them actually does all the bread, and that is where I always get my eggs as well.” London, Post Family “As you get older you body and you worry more about your health.” Lancashire Urban Post Family
Lifestage of provenance shoppers Young Families are an emerging lifestage (based on shopper sales analysis) Buying for themselves View cereal products as an ‘affordable indulgence’ Opportunity to buy foods specifically for themselves alongside child-focused products • Buying for children • Parents endeavouring to give their children healthy and wholesome foods • Evident for some breakfast cereals, but most prominent in healthy snacks (cereal bars in lunchboxes)
Comparing cereal products with other categories The focus groups revealed that provenance is not as ‘top of mind’ for cereal products as it is for fresh produce and meat products The lack of speciality cereal products (compared to other categories) limited respondents’ views • By contrast regional cheeses, Cornish clotted cream, Scottish salmon were all name-checked across focus groups Two factors mean respondents perceive provenance in cereal products to not be on a par with the meat and produce categories • The prevalence of brands • The nature of meal occasions for cereal products, “I think the problem with cereal products is that I don’t think about it. I know what to use and what to recognise, I think it is because we haven’t had to think about it before, where it has originated from.” Lancashire urban post family
Comparing cereal products with other categories The prevalence of brands The nature of meal occasions for cereal products These hurdles are explored in more detail later in the presentation. • Shoppers largely trust the cereal products brands they purchase • The lack of brands in fresh produce and meat categories means they look for provenance as a form or reassurance about product quality or taste Bread and breakfast cereals in particular are regarded as staple purchases that are consumed over a number of meal times Shoppers are more inclined to choose provenance when buying something ‘extra-special’ or as an occasional purchase e.g. if I had more money I’d buy a good leg of Welsh lamb
Cereal products and provenance attributes Local food is the most prominent aspect of food provenance, although the focus groups revealed: • Few UK regions linked with cereal products by shoppers • Exception is oats, porridge and shortbread and the link with Scotland • Where oats have Scottish provenance, they are typically viewed as premium products • Although geographic link not top of mind, shoppers are aware of local food processors (in urban areas) and/or farms/bakeries (in rural areas) • High awareness of local breweries • Yet beer was not immediately associated with cereal products
Cereal products and provenance attributes Perceptions of finest smoked salmon from Scotland / best clotted cream from Devon and Cornwall Similar preconceptions about cereal products are not widespread Clear opportunity to ‘stake a claim’ First in ‘wins’; need to be credible Creates a blank canvas • Producers, processors and manufacturers can link their region with cereal products • Scope to develop shopper expectations about region and quality • Geographic expansion can complement product re-positioning for regional products • Benefit from lack of pre-conceived ideas about location and product E.g. a locally-produced bread brand was perceived as mid-lower market by shoppers in the region where it was produced, but was perceived to have a higher market positioning by shoppers in other regions.
Cereal products and provenance attributes Focus groups identified greatest interest in buying British cereal products, in the absence of a local or regional knowledge of cereal products Respondents viewed this as an extension of supporting their local community • Rural shoppers see farmers as integral to local community (along with independent food outlets) • Urban shoppers more familiar with food manufacturers and processors, citing the relative importance to the local economy “I think ours is as good as anybody else’s if not better, probably fresher and it’s supporting the farmers isn’t it?” Lancashire Urban Post Family
Cereal products and provenance attributes Respondents’ desire to buy British was a strong reaction to the credit crunch Across the focus groups, the importance of supporting the UK economy was a frequent discussion point Particularly emotive with older shoppers Indicative of a growing recognition of interdependence “I think with the credit crunch now we should buy everything British.” Lancashire Urban Post Family
Cereal products and provenance attributes Respondents acknowledge that buying British is more than supporting the economy: • Lower food miles • Greater confidence in UK production standards • Post family shoppers were also concerned about Britain’s food security Background concern that shoppers may have to alter their shopping habits to buy British e.g. use a farm shop or local specialist Respondents interpreted British origin as supporting several different provenance attributes “I think we should buy British whenever we can. We have got to support our farmers.” Lancashire Urban Post Family “It should be British - it is important to the environment and the area that you live in.” Norfolk Rural Family Opportunity to remind consumers of product origin and the inherent benefits, as well as flagging availability in mainstream outlets
The role of farmers Supporting farmers is inherently linked with buying British Respondent recognition that meat and fresh produce have underlined provenance e.g. images of producers, naming specific suppliers on packaging and labelling Why use farmers? • Has relatively broad appeal with shoppers • Using a farmer indicates traceability • Traceability creates trust “If you go to farmers markets and buy things from the farmer and you get a really nice feel good factor from that.” Norfolk Rural Family “You feel like you are doing your bit, supporting the farmers.” Lancashire Urban Family Cereal and oilseeds sector can do similar, building on farmers’ role in the supply chain and shoppers’ favourable perceptions
Farmers and cereal supply chains Opportunities for specific messages relating to farming/agriculture Favourable perceptions among respondents related to: • A network of family farms • Heritage and tradition • Preserving the fabric of the countryside • Natural production • Producing environmental benefits => particularly in terms of reducing pesticide/chemical use • Respondents’ underlying motivations: • Smaller businesses seen to be more altruistic • Established businesses are experts at what they do • Reassurance that food consumption does not have a negative environmental impact • Underlines the natural origins of food • Can give a ‘feelgood’ aspect to foods purchased
Farmers and cereal supply chains Given the consumer appeal of farming messages, there is potential for cereal products to use the Red Tractor logo more widely. In general, there are advantages and disadvantages associated with using the logo, but the research has highlighted that a focus on educating consumers about the logo through more communication would be beneficial. Recognition by a particular segment => older and rural respondents Communicates a standard e.g. food safety Respondent recognition they need signposting towards quality products Reasons to Exclude Reasons to Use Low levels of logo awareness across focus groups Associated with meat and livestock and not cereal products Mixed interpretation of the logo, including some link with organic Underlying respondent scepticism in logos – Who polices it?
Provenance and organic cereal products Due to widespread availability of organic cereal products in mainstream outlets, organic is a recognisable form of provenance, generating a range of positive and negative talking points across focus groups • Organic cereals – the positives • Perceived taste benefits • Viewed as healthier • Natural foods • Always use high quality ingredients • Linked to small scale / specialist production • Perceived as fresher • A way of addressing food intolerances and avoiding harmful substances • Some view organic as a way of feeding children responsibly • Better for the environment • Generates a ‘feelgood’ factor Organic cereals – the negatives Irregular purchase Price viewed as barrier Credibility of organic standards prone to questioning Organics considered as exclusive and ‘not for us’ foods Difficult to understand health benefits of eating organic if also eating conventional Volume of organic imports is a concern Growing awareness of media questioning of organic benefits
Provenance and organic cereal products Researcher Comment Some longstanding barriers for organic producers and unlikely to alter due to credit crunch But opportunity for organic producers and food manufacturers to: • Communicate the values behind organic production • Inform the benefits of buying organic • Tell shoppers why they should be buying organic • Demonstrate the efforts you put into growing/producing organic Organic on the label helps to differentiate products, but there is potential to go beyond just the organic message in order to remind and inform shoppers why organic products are unique.
Cereal products, provenance and health Provenance was associated with less processed foods across the focus groups Specific attributes linked with provenance included natural ingredients, low chemical / pesticide use and higher production standards Such attributes convey an image of a more natural, less processed product, and help to emphasise the health attributes of cereal products Respondents considered the health message to be particularly important for breakfast cereals, and specifically children’s cereal products “Breakfast is a bit of a credit isn’t it? Have a healthy breakfast and in the evening you can have treats.” London Urban Post family Versus adult products, kids’ cereal products are perceived as artificial, highly processed, not as healthy and at the lower end of the quality scale.
Cereal products, provenance and health Researcher Comment There is potential to link provenance and health by emphasising natural ingredients or production techniques Respondents particularly open to health messages as they get older Consistency and coordination in messages and branding is essential Health expectations are shaped by the quality and type of packaging • Respondents currently expect health foods in earthy colours, and to use recycled and minimal packaging “Just tell them to keep it as natural as they can” Lancashire Urban Post Family “If it’s just wheat, how can it be anything than really good for you?” Lancashire Urban Post Family
The hurdles for cereal products “For fresh fruit and veg, I buy local. You go to the local greengrocers but with cereal products you can’t.”Lancashire Rural Post Family “It bothers me that food has travelled from around the world, because sometimes the animals are poorly treated. I don’t think I worry about the travelling time for cereal products.” London Urban Post Family Some of the provenance attributes that respondents are familiar with from other food categories are not necessarily synonymous with cereal products. Specifically: Local • Respondents identified a lack of a local choice, and feel they have little opportunity to buy local cereal products Welfare • Respondents viewed animal health and welfare as key reasons for buying livestock products with provenance. • The same level of concern over production practices for cereals were not evident across focus groups.
The hurdles for cereal products In addition, one of the underlying purchase drivers behind provenance is freshness Freshness is a key motivator for fresh produce and meat products Respondents equated fresher with better tasting This is not immediately relevant to cereal products, particularly where relatively high degrees of processing are involved. “Cereal products are processed anyway. With vegetables, fruit and meat, you think if it is local it is better because it is fresher.” Norfolk Rural Family
Although barriers may exist at present to taking advantage of these provenance attributes, it is not to say that they are irrelevant Freshness Welfare Local Critical that bread is viewed as fresh Beers use ‘brewed on’ dates to imply freshness Underlying concern over pesticide use, particularly amongst urban and family shoppers Environmental measures being taken by supply chains could help address these concerns in a positive way Shoppers buy local products where available Shoppers like the appeal of supporting local businesses Artisan and small scale producers are successful in targeting local markets e.g. rapeseed oil producers. Clearing the hurdles
Brands and provenance Focus group feedback confirms some food brands have become an integral part of our diet and shop They are firmly established within our food heritage and tradition Respondents viewed heritage and tradition as key provenance attributes, and interpreted this as implying an underlying quality • ‘They must be doing something right if they’ve been around all these years’ “Some breakfast cereals they have been around for years. We know they are reliable because we grew up with them we still stick with them.” Lancashire Urban Post Family “That bread advert tells me they are still as they were, all these years later.” Norfolk Rural Family
Brands and provenance Respondents regarded many brands in the cereal products sector as long established The concept of brand inheritance (buying the same brands as our parents used to) particularly evident in the bread and breakfast cereal categories • Hovis, Warburtons, Shredded Wheat & Weetabix were among the brands name-checked in the groups Established businesses and brands can use heritage and tradition to convey provenance and support brand extension
Brands and provenance Researcher Comment For new or own brand products, generating a similar sense of heritage is an obvious challenge • Farming and the supply base can provide a simple and clear link with tradition • Longevity of many farm businesses can be used to strengthen the proposition of new to market brands or producers • But be credible in any claims made about sourcing or supply chain
Meal occasions and provenance Respondents did not regard cereal products as ‘centre of plate’ ingredients But provenance does have a role Research identified occasions when respondents look for provenance e.g. • Following a recipe that specifies good quality ingredients (most relevant for flour and rapeseed oil) • Purchasing an affordable and regular treat or indulgence (biscuits) • Buying complementary products (a premium bread or cracker to go with an extra-special cheese) • Buying different types of bread at weekends • Emphasising healthy options/natural ingredients at the breakfast table
Meal occasions and provenance Researcher Comment Consider that pack size can limit trial • Core provenance shoppers are likely post family lifestages=> product size is important • e.g. if they buy an 800g loaf, they may not buy another bread product in the same shop as they perceive they are being wasteful • Older respondents viewed rapeseed oil in half litre bottles as being in a bottle size much larger than they would need • Imminent deregulation of specific sizes for pre-packaged bread (and possibly unwrapped bread) could create opportunity to expand purchase repertoire “I only need to buy small loaves. When your family is like mine and flown the nest, or like my mum who is on her own, it’s very very hard to use up anything other than a small loaf.” Lancashire Rural Post Family
Impact of the credit crunch Research was conducted in autumn 2008 Anticipated that the credit crunch and food prices would be a focus of discussion In fact, respondents had to be prompted to discuss financial concerns and their shopping/eating behaviour Respondents reported several behaviour changes: • Shopping around • Trialling new stores, particularly discounters • Trimming back on waste • More baking and cooking at home Changes to purchasing patterns were focused on fresh produce (buy more seasonal) and meats (shifting to different cuts), rather than cereal products “Credit crunch? It will be alright. We know how to cook up here.” Lancashire Rural Post Family
Impact of the credit crunch Price was not a key issue for respondents that already buy provenance, particularly for older lifestages • Indicative of them not willing to trade-off their values (and taste preferences) for value • Relatively low price of cereal products in total shop means few regularly compare prices • e.g. few had switched bread brands although they had noticed the increase in price per loaf “I use a traditional local bakery. I like the bread. Price wise I not worried because I like it.” Lancashire Rural Post Family “I don’t pay attention to how much it is.” Lancashire Urban Family Provenance may be associated with upmarket positioning, but the credit crunch does not translate to shoppers abandoning their provenance purchases
Provenance observations and opportunities across the cereal categories The following slides summarise the issues and views of focus group respondents across different cereal products categories. The generic opportunities highlighted are indicative of actions that the cereal industry could pursue based on this research, rather than being a prescriptive list of recommendations.
