Presentation at FMI, Stockholm, October 2, 1985. We
are unable to locate the charts for this presentation.
Ingrid Berg and Hans L Zetterberg, Sifo, Sweden
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.
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.
* Goda fen
BILD "Goda fen.
Different countries, different
values
Sample Foods Country Averages (25.7)
Values in Europe
1950s & 1960s
Economic
security
Wants
not only low price but guarantees
Order
Price
stability, hatred of inflation
Shopping
list
Stocking
up
Status
Big
freezer, dining room
The
newest, the best, the appropriate
Different
glasses for red and white wine
Microwave
oven
Utensils
for fondue
Food
processor
Personal
appearance at table
Right
clothes in the right restaurant
Be
slim, cut down on sugar, calories
Less
interested in food
1970s
Health
and fitness
Eat
to feel good rather than to be slim
Holistic
attitude to food and drink
Informality
Beginning
breakfastization
Invite
people at the spur of the moment, not planned in advance
Open
house
Intraception
Mood
and music
Social
responsibility
Nutritical
values more important than taste
Contents
declaration
1980s
Pleasure
Polysensuality
Rich
and full life
Away
from the restriction attitude to food
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
Kiwi
Mango, papaya
Pasta (Italy)
Crepes
(France)
Kebab
(Turkey)
Tamales
(Mexico)
Curry
(India)
·
Remaining largely national dishes
Sauerkraut
in Germany
Beef
and kidney pie in UK
Meatballs in Sweden
Gulasch in Hungary
Pon au feu in France
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.
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!"