Better-for-You and Clean Label Foods: What Impact Has COVID-19 Had?

If you’re reading this blog, the Coronavirus pandemic has undoubtedly affected your life in one way or another. With governments around the world attempting to slow the spread of the virus, our collective day-to-day existence has been flipped upside down. 

Many states in America have implemented some sort of stay-at-home order that restricts access to places we used to take for granted. No longer can you meet up with friends for a drink at your favorite bar, enjoy a ballgame on a sunny afternoon, or catch the latest movies out in theater (that last one hit me pretty hard). However, even during this difficult time we need to keep our most essential services open – grocery stores being among those. 

At the end of 2019, GutCheck conducted an extensive research study of 7,000 consumers to understand their attitudes and behaviors toward ‘better-for-you’ (BFY) and ‘clean label’ foods, a subset of the broader food and beverage retail category comprised of products that are generally seen as healthier compared to other options. We gathered some pretty in-depth knowledge and insights from this survey, and our clients in the space were eager to learn what we uncovered.

But then COVID-19 hit. Since our survey was completed prior to the outbreak, we decided to run another wave of research with the same respondent population to understand how the pandemic has impacted the way they shop for BFY and clean label products. 

Below are a few of the changes we noted. It would be good for food and beverage companies to be aware of these as they plan strategies going forward. Keep in mind, these insights were gathered in the earlier days of the pandemic, and could become more pronounced in the near future.

#1 – Health Considerations Decline Slightly

Consumers are paying a little less attention to health and value claims when choosing between products. These are still important, just to a lesser extent than before.

For consumers who were already interested in BFY/clean label products, we did not note a major shift in priorities or the claims (e.g. natural, low sugar) that were important to them. However, interest in and shopping for clean products does seem to be on the downturn. 

#2 – Change in Retailers

Club stores – Costco in particular – are experiencing higher traffic since we first ran this study. This shift is particularly notable in the West and Northeast regions, the latter of which experienced the earliest effects of COVID-19. Shoppers in the Northeast visited Target more than in the past, and discount retailers (e.g. Aldi) around the country have seen a general decline. The impact on online shopping is not quite visible yet, but we know from our weekly Consumer Mindset Index study that online shopping in general has experienced an uptick.

#3 – Shopping Frenzy

Related to the above point, consumers are shopping less frequently to reduce the spread of COVID-19. They’re favoring retailers that can be a one-stop-shop, are looking to buy in bulk in order to make less trips, and are attempting to be as fast and efficient as possible when they do need to venture into the store.

As a result, they’re also making much quicker and more spontaneous purchase decisions, and their choices are driven by availability. The products that consumers spot first are likely to be the front runner. Price comparison – as well as comparison of health benefits – is still occurring, but to a lesser degree.

#4 – Millennials Pull Back

Shopping behaviors of Millennials seem to be the most impacted at this early stage of COVID-19. In our first run of the study, Millennials were the generation most interested in BFY and clean label claims, which aligns with their focus on fitness and healthy lifestyles. In fact, one-fifth of that generation said they will only purchase clean label foods and beverages, and 71 percent stated they are either sometimes or always willing to pay more for clean labels.

However, we noted in our re-field that Millennials’ drive to purchase these healthier products has declined a bit. This indicated their preferences in the category are a choice, not a necessity, and they can switch behaviors as needed. And with the needs currently being fewer trips, stocking pantries, giving less time to price/health comparisons, and just going with products that are available, Millennials are certainly willing to adjust to goods that “will do fine for now.”

It’s pretty clear that consumers are altering their shopping behaviors in response to the pandemic. It’s also pretty clear that previous product and marketing strategies likely won’t be as effective in our current environment. The companies that stay agile and can adjust to this new normal (which seems like it could continue for quite a while) will be the ones who stay afloat while their competition struggles. But in order to effectively communicate and appeal to your consumers, you first need to understand what they’re going through. Market research will help you do that, and GutCheck is here to help – every step of the way.