Presentation at FMI, Stockholm, October 2, 1985.  We are unable to locate the charts for this presentation.

Consumer Trends in Europe: 
The Case of Food

Ingrid Berg and Hans L Zetterberg, Sifo, Sweden
  

The New Segmentation

 The traditional picture of the consumer says that rich people will buy "niche" products, of good quality (such as Chiver's marmalade), the broader middleclass will buy branded products supported by mass advertising (such as Kellog's Corn Flakes), and the poor working class will buy cheap products, standard products and generics. This structure favored mass production and mass marketing. Today the situation is changing.

 Market research not only in the food area but from many other sectors, show that lifestyle or niche products increase steadily and are now sold to all social classes. Even wealthy consumer will buy private brands sometimes and will shop standard groceries at the discount store. The money saved is spent on attractive lifestyle and niche products. In the same way research shows that low-income consumers will try to save money in order to buy a long desired niche product. Today, crisp iceberg lettuce is bought occasionally in all seasons, also by low-income families. Twenty years ago it was a very special product in Northern Europe.

 

 BILD The General Market Development

 

 Food is becoming fashion. By tradition food habits have been considered as something rather stable with very slow changes. Of course, this varies from country to country but it is quite clear that food habits and attitudes to food today is something that changes very fast. Changes in values first show up in clothing and fashion, and soon after they appear in food and drink habits, and later in vacations, automobiles and furniture. In the countries in Europe where modern values prevail, food is not the first but the second to change.

 A part of the food market is already a fashion market and this part is growing.

 

Breakfastization

 Anthropologists and sociologists once regarded meals as times when a family gathered at a table, where seating reflected the prevailing hierarchy:  father had his place, mother hers, and the children theirs. The family resembles all other groups who gather at certain times and cement the values common to their members.  When values change, so, too, do a group's gatherings.  Let us recall the typical meals of a European middle-class family in the 50s.

 Even then breakfast was a fragmentary meal.  Family members often arrived at the breakfast table separately and served themselves. It was accepted that each followed his own interests and needs:  one could read the morning paper, be uncommunicative, or even a little sullen at such an early hour. It was not so important that seating at the breakfast table reflect the family hierarchy.  Family breakfasts were rare. Members could take any seat at the table and come and go as they pleased without question.

 

SMΕDIA – Frukostbord

 

 But the rules were different at dinnertime. Then the children had to ask for permission to leave the table, even if they had finished eating. The family remained a united group throughout the meal – a reflection of the greater ritualistic significance attached to dinner compared with breakfast.  At dinnertime, those who could afford it did not eat at the kitchen table but set a special table, with a tablecloth and perhaps even linen napkins. A kitchen table, maybe one with a Formica top or one with a wood surface marked by use, sufficed for the first meal of the day. But the family symbol in the ritual around the main meal of the day – the dinner table – was spotless, perhaps of finer wood, well polished, and ritualistically protected by a white cloth. Differences in the degree of individualism appropriate to the two meals are manifest in the familiar expressions "What do you want for breakfast?" and, its contrast, "We're having a roast for dinner." Individual choices are solicited for breakfast but not for dinner.

 Lunch was a meal that ranked somewhere in between the other two.  As is the case today, it was more ritualistic than breakfast but less so than dinner. Its greater social significance compared with breakfast is expressed in our desire to have company at lunch;  it is not a meal we like to eat alone.

 At dinnertime the family gathered formally. The meal bespoke order and structure. It took place at a specified time; each family member had his place at the table; correct placement of glasses, china, and dinnerware was carefully observed.  Parents reminded their children to wash their hands before coming to the table.  One often dressed for dinner, or at least tidied oneself up. An unspoken rule prevailed against discussing subjects that might disrupt the harmony and thus the unity of the family at the table.  The care that went into preparing the meal was also an expression of solicitude for the family. And the money spent on food was also a token of familial devotion.

 Since the 50s we have witnessed a "breakfastization" of meals. From a social point of view, all meals have become more and more like breakfast: less ceremonial, more individualistic, more mutually exchangeable.  For children the school lunch is socially often a more important meal than dinner at home.  "Proper" dinners are seldom arranged for just the family unit; the old-fashioned dinner is more frequently served only when one has guests.

 

 French 3 course meal

 

 Breakfastization means that households can cut down on the cost of food and the attention they give to nurture, without clashing with culture, as mirrored in some of the basic values of our time.

 At the same time more individualistic values have emerged in respect to food, for example, fitness, health, and a well-balanced diet. Once the culinary arts were a concern common to all households; today they have become a hobby for a minority. The food budget now has to compete with expenses for clothes, entertainment, travel, cars, boats, and payments on credit card debts.  Growing breakfastization has placed the champions of good eating in a tough competitive position.

 

Values

 * Goda fen
 BILD – "Goda fen.

Different countries, different values

 
Sample Foods – Country Averages (25.7)

 

Values in Europe
1950s & 1960s

 1970s

1980s

Polysensualism

 Polysensualism means that one relies on all one's senses to gather information about and interpret the world.  It gives richness to life that differs from the clinically stringent, abstract, theoretical content in today's world.

 The visual has dominated among elites in the Western world, and throughout the centuries advanced civilizations have used visual vehicles to convey cultural messages.  Egypt's pyramids and sphinx have the same overwhelming visual impact in the twentieth century A.D. as they had in the fifteenth century B C. The same is true of the Acropolis and of the clean, balanced lines of Greek sculpture of 400 B.C.  The dominance of the visual has made our culture give high priority to lucidity, and has customarily favored logic and rationality. Since the Enlightenment the dominance of the brain's left hemisphere has been marked in all forms of culture.

 But one can also be more down-to-earth and live in ways that develop the others senses. Then smell, touch, hearing, and the perception of internal bodily processes (biofeedback) come into focus. This is what we mean by polysensualism, the use of many senses.   The brain's right hemisphere is most frequently called into play when polysensualism predominates.

 

BILD Hamburgare (16.23

 

 One polysensual product in the food branch that deserves our admiration is the hamburger. With its big bun and varied colors the large American hamburger is a  sight for sore eyes.  It also has a delightful smell of freshly baked bread and sizzling meat. And who would have thought that you could get the children of Europe's middle classes to eat with their fingers?  But in eating their hamburgers today, they happily use the sense of touch in their fingers. And when they bite into the hamburger they feel how the juice runs into their mouths. When eating, they hear crunching sounds as they bite through crisp lettuce, cucumber, and raw onions. And then, of course, there is the hamburger's total melody of taste sensations.  In short, the hamburger is a polysensual eating experience, just the kind that modern man wants.  And that is why it is such a marketing success.

 

 

Hypernatural (naturens under)
 

BILD – Naturens under (nr 16.24)

 

 In the sixties and early seventies all European countries witnessed a "return-to-nature" trend, which represented a reaction to the urbanization, pollution, and waste of post-war industrial society. Faced with a society which had become overwhelmingly industrialized, standardized and urban in an extraordinarily short time people cultivated a myth of nature based on the countryside and the pre-industrial era.

 The late seventies have seen a reversal of this tendency. :p The basic concept of nature is in the process of changing. Nature is not always in opposition to technology; it may indeed be fostered by it. Increasingly, and in a growing number of areas, the difference is much less clear-cut between what is natural and what is not. The idea is gaining ground that the new technology can produce results for mankind, which are just as good, and natural as, or even better than, those produced by a nature untouched by human technology.

 A new relationship with nature is emerging, which is less ideological and more realistic and pragmatic.

 From a marketing point of view, this new credibility of science and technology could have a remarkably liberating and stimulating effect. However, it must be emphasized that this new trend will make heavy demands on understanding and correct identification of launch markets and consumer target groups.

 A desire to create a new breakfast item here in Sweden resulted in a completely new product: the whey from cheese processing was combined with exotic fruit juices and nectars into a delicious liquid which was given the name "Nature's Wonder." The only problem  with the product for the manufacturer was quite typical – the product was too modern, the authorities could not figure out whether it was a kind of milk or juice or something else. They decided to classify the product as a soft drink, which meant extra tax and consequently a price problem.

 
 

 * Values in Age Groups
     BILD – Values in Age Groups (25.9)

 * Country Averages
    BILD – Country Averages (25.7)

·         Sample Foods
BILD – Sample Foods (25.8)

 

·         Becoming international products

 ·         Remaining largely national dishes

 

 

Private Consumption Expenditure
 

 BILD – Private Consumption Expenditure (25.4)

 

 The share of total disposable income which is food takes highest in Spain. This is to be expected; their somewhat lower standard of living means that basic needs still take a great part of the peoples' income. The food share is also quite high in Finland and Norway, as well as in the UK. In the UK, however, it is alcohol and tobacco consumption that is high, the amount spent on actual food is low, second only to The Netherlands.

 Sweden and Norway have one of the highest standards of living. Normally this would imply lower shares of food costs out of disposable income, but food prices in Sweden and Norway are comparatively high. One of the reasons for the high prices in these countries is value added tax (23%) in Sweden charged on food. In Sweden, the full normal VAT is charged on food. In West Germany only half of the normal VAT is charged (7%). In the UK there is no VAT on food.

 The very high living and eating costs in Sweden and Norway, are partly compensated by very low medical and health costs which have been taken over by the state and financed through the tax system.

The Swedish Case

In line with historical, cultural and socioeconomic factors there are considerable differences in the structure and the development of food distribution between the European countries.

 Generally speaking concentration in the wholesale as well as in the retail sector has gone very far in Europe and there is a shift in power going on from the manufacturers of food to the distributors of food.

 BILD – Top 5 organizations (25.3)

 This table shows the importance of the top five food distribution organizations within each country mentioned.

 Definition of a distribution organization: the entity that conducts most of the negotiations with manufacturers and that exercises the positive or negative power to list or delist a product.

 Sweden has the most concentrated trade structure, with a few central trade organizations representing the major part of the country potential. A "yes", or "no" from five key buyers in Sweden opens or closes 80 per cent of the total food market. Five decision points in the UK, that is, the five main chains, is enough to reach 45 per cent of the market, but apart from these concentration is not at all as strong as in Sweden.

 BILD – ?  

 To be accepted by a distribution organization in Sweden food manufacturers have to pay so-called "entrance fees." They consist of costs for price reductions, contributions to ads in local papers as well as direct mail, participation in promotional in-store campaigns, etc. These fees entered the scene at the end of the 1950s and have constantly risen and thus taken more and more out of the advertising and promotional budgets. In the short run, this system is favorable for the stores and the manufacturers complain that they are in effect, "taxed" or "exhorted" by the stores. Consequently the amount left for brand advertising and promotion directly to the consumer has shrunk, with unfavorable consequences for not only brand loyalty but also on new product development. The stores use the fees mostly to advertise prices and conduct sales.

 In 1967 retail promotion fees took about 35 per cent of the advertising and promotional budgets. In 1980 the share stabilized at about 75 per cent which seems to be the peak.

 There is a shift of power between production and distribution in favor of the later. The tendency is obvious also in other countries.

 In France, concentration has recently increased considerably. In the UK the centralized chains have a strong position, controlling almost half the food volume, but have invented creative partnerships with food manufacturers. In West Germany it is true that the voluntary chains dominate the food market, but they are more decentralized with many local decision points.

 When stores take over the promotion budgets they tend to focus on the price rather than other aspects of the products. In the long run, I believe the excessive concentration on low price in the promotional effort may be detrimental for the whole food sector. The manufacturers must get a better chance to promote the specific qualities and attributes of their products.

 Because of too much focus on price at the expense of variation, choice, and quality, food has become less interesting and less attractive in Sweden. Food manufacturers not only have to compete with one another, but with the entire retail business. And they have been the losers.

 BILD – Private Consumption in Sweden (25.2)

 The Swedish food industry has at present a campaign:  "Eat drink and be merry!"