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What role should they play in your marketing strategy? Certifications: Eric Pierce – VP Business Insights [email protected] www.linkedin.com/in/ericjpierce/ Amanda Hartt – Market Research Manager [email protected]

Certifications - NEXT Data & Insights · consumers use certifications. Incidence and Importance of Certifications among Consumers Willing to Pay More for Healthy Products. Importance

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Page 1: Certifications - NEXT Data & Insights · consumers use certifications. Incidence and Importance of Certifications among Consumers Willing to Pay More for Healthy Products. Importance

What role should they play in your marketing strategy?Certifications:

Eric Pierce – VP Business [email protected]/in/ericjpierce/

Amanda Hartt – Market Research [email protected]

Page 2: Certifications - NEXT Data & Insights · consumers use certifications. Incidence and Importance of Certifications among Consumers Willing to Pay More for Healthy Products. Importance

© 2019 New Hope Network. All Rights Reserved. 2

NEXT: New Hope Network’s Consulting Group Helps companies of all sizes use market and consumer intelligence to make and

improve data-driven decisions and prioritize innovation efforts.

Provides forward-looking, predictive solutions for successful innovation and maximum Return On Innovation Investment (ROII).

Uses proprietary data and market intelligence for unique insights into health, wellness, and natural products.

Improves decision-making and helps identify “What’s NEXT?”

Page 3: Certifications - NEXT Data & Insights · consumers use certifications. Incidence and Importance of Certifications among Consumers Willing to Pay More for Healthy Products. Importance

Mission Statement Bring more health to more people

Drive growth and change in our food system, making it more sustainable, socially responsible, conscious, and humane.

Page 4: Certifications - NEXT Data & Insights · consumers use certifications. Incidence and Importance of Certifications among Consumers Willing to Pay More for Healthy Products. Importance

© 2019 New Hope Network. All Rights Reserved. 4

The Global Network for Health & Wellness• Deep connections across the entire value

chain, from ingredients to finished goods to retailers.

• Global footprint of ingredient events, publications and data & insights businesses.

• Proprietary data and industry analysts to provide unparalleled perspective on the H&W ecosystem.

• Health & Wellness DNA based on 40+ years of experience in the space.

• Forward-looking, predictive solutions to guide innovators on where the market is headed.

Page 5: Certifications - NEXT Data & Insights · consumers use certifications. Incidence and Importance of Certifications among Consumers Willing to Pay More for Healthy Products. Importance

Belief: Certifications are expensive, resource intensive, and they don’t drive purchase.

Page 6: Certifications - NEXT Data & Insights · consumers use certifications. Incidence and Importance of Certifications among Consumers Willing to Pay More for Healthy Products. Importance

© 2019 New Hope Network. All Rights Reserved. 6

78%

But they must add value …… because the vast majority of new food and beverage products launched at Expo West each year carry 1 or more certification type.

% of Products w/ Certifications

Source: NEXT Trend Database of Food & Beverage products exhibited at Natural Products Expo West 2019

No Certifications

1 or More Certifications

Page 7: Certifications - NEXT Data & Insights · consumers use certifications. Incidence and Importance of Certifications among Consumers Willing to Pay More for Healthy Products. Importance

© 2019 New Hope Network. All Rights Reserved. 7

22%

78%

53%

32%

14%6%

None 1+ 2+ 3+ 4+ 5+

In fact, for many brands 1 isn’t enough.Half of all food and beverage products exhibited at Expo West 2019 carried 2 or more certification types.

% of Products w/ Certifications

Number of Certifications

Source: NEXT Trend Database of Food & Beverage products exhibited at Natural Products Expo West 2019

Page 8: Certifications - NEXT Data & Insights · consumers use certifications. Incidence and Importance of Certifications among Consumers Willing to Pay More for Healthy Products. Importance

© 2019 New Hope Network. All Rights Reserved. 8

And use of certifications is growing.

34%Growth in the number of food & beverage products certified with one of 10 certification types

10 Certification Types Food Safety or Quality Standards Gluten Free Specialty Diets Animal Welfare or Humane Treatment Fair Trade Whole Grain Organic or Non-GMO Eco-Friendly or Sustainability Kosher or Halal Vegan or Vegetarian

Source: NEXT Trend Database of Food & Beverage products exhibited at Natural Products, growth between Expo West 2016 and Expo West 2019

Page 9: Certifications - NEXT Data & Insights · consumers use certifications. Incidence and Importance of Certifications among Consumers Willing to Pay More for Healthy Products. Importance

So what explains the difference?

Page 10: Certifications - NEXT Data & Insights · consumers use certifications. Incidence and Importance of Certifications among Consumers Willing to Pay More for Healthy Products. Importance

© 2019 New Hope Network. All Rights Reserved. 10

Certifications signal trust & consumer fit.

Sales

Certifications may not directly drive sales

Marketing

Instead they communicate important messages to select consumers

Appreciating the role of certifications may require shifting your expectations from: direct to indirect, from sales to marketing, from ROI to demonstration of trust and values.

Page 11: Certifications - NEXT Data & Insights · consumers use certifications. Incidence and Importance of Certifications among Consumers Willing to Pay More for Healthy Products. Importance

© 2019 New Hope Network. All Rights Reserved. 11

Certifications don’t drive sales directly (for a broad audience).

2.8

3.6

4.2

4.2

5.1

5.1

5.5

5.5

Taste

Price

Nutrition Details

Ingredient List

Convenience

Brand

Certifications

Claims

Consumer Survey (Total Sample): Avg Rank Importance in Purchase Decisions

They do communicate important messages …… they : Provide quality assurance Reinforce brand value Provide competitive

differentiation Demonstrate trust Signal the presence or

absence of qualities that consumers seek

Most Important

Least Important

Rank 7 out of 8

Source: NEXT 2019 Certifications Micro Survey utilizing a generally representative convenience sample of 900 US Consumers.

Page 12: Certifications - NEXT Data & Insights · consumers use certifications. Incidence and Importance of Certifications among Consumers Willing to Pay More for Healthy Products. Importance

© 2019 New Hope Network. All Rights Reserved. 12

And they help attract select consumers.

2.7

3.4

4.3

4.3

4.9

5

5.6

5.8

Taste

Price

Nutrition Details

Ingredient List

Convenience

Brand

Claims

Certifications

Consumer Survey: Avg Rank Importance in Purchase Decisions

Most Important

Least Important

Convenience Shoppers Willing to Pay More for Healthy ProductsVs.

3.4

3.9

4.0

4.7

4.7

4.7

5.0

5.6

Taste

Ingredient List

Nutrition Details

Price

Certifications

Claims

Brand

Convenience

Consumer Survey: Avg Rank Importance in Purchase Decisions

Source: NEXT 2019 Certifications Micro Survey utilizing a generally representative convenience sample of 900 US Consumers.

Page 13: Certifications - NEXT Data & Insights · consumers use certifications. Incidence and Importance of Certifications among Consumers Willing to Pay More for Healthy Products. Importance

What certifications are other innovators investing in?

Page 14: Certifications - NEXT Data & Insights · consumers use certifications. Incidence and Importance of Certifications among Consumers Willing to Pay More for Healthy Products. Importance

© 2019 New Hope Network. All Rights Reserved. 17

Innovators are investing in certifications.

Gluten Free

Specialty Diet Types

Humane

Fair Trade

Whole Grain

Organic or Non-GMO

Eco-Friendly or Sustainability

Kosher or Halal

Vegan or Vegetarian

-50%

50%

150%

250%

350%

450%

550%

0 1000 2000 3000 4000 5000 6000 7000

Food Safety and Production Standards (2286% growth)

Shar

e G

row

th b

etw

een

EW’1

6 &

EW’1

9

Count of Products Food & Beverage at Expo West 2019

Source: NEXT Trend Database of food and beverage products exhibited at Natural Products Expo West 2019; Share Growth between EW’16 & EW’19

High Penetration, Low Growth

Hig

h G

row

th,

Low

Pen

etra

tion

Incidence and Growth of Food & Beverage

Certification at Expo West

The fastest growing certification types are: Safety and Quality Specialty Diets Humane Eco/Sustainability

Page 15: Certifications - NEXT Data & Insights · consumers use certifications. Incidence and Importance of Certifications among Consumers Willing to Pay More for Healthy Products. Importance

© 2019 New Hope Network. All Rights Reserved. 18

Food Safety and Quality Production

StandardsEco-Friendly or Sustainability

Special Diets (paleo, keto,

whole30, Weight Watchers)

Animal Welfare or Humane

Treatment

Kosher or Halal

Vegan or Vegetarian

Organic or Non-GMO

Gluten Free

Fair Trade

Whole Grain

3.0

3.5

4.0

4.5

20% 30% 40% 50% 60% 70%

Progressive consumers use certifications.

Incidence and Importance of

Certifications among Consumers Willing to Pay More for Healthy

Products

Impo

rtanc

e in

D

ecis

ion

Mak

ing(

Ran

k)

Incidence Of Use In Decision MakingThe most relevant certification types are: Safety and Quality Humane Eco/Sustainability Organic/NonGMO

Source: NEXT 2019 Certifications Micro Survey utilizing a generally representative convenience sample of 900 US Consumers.

Page 16: Certifications - NEXT Data & Insights · consumers use certifications. Incidence and Importance of Certifications among Consumers Willing to Pay More for Healthy Products. Importance

So which certifications should you pursue?

Page 17: Certifications - NEXT Data & Insights · consumers use certifications. Incidence and Importance of Certifications among Consumers Willing to Pay More for Healthy Products. Importance

© 2019 New Hope Network. All Rights Reserved. 20

Consider multiple certifications to maximize consumer reachThe reach of any single certification is limited

47%Maximum reach among total consumers of the most popular certification type (Food Safety & Quality Production Standards)

TURF Analysis reveals combos to extend reach

53%Growth in reach with four certifications.TURF is a statistical analysis designed to identify combinations of attributes which maximizes the number of consumers who find at least one attribute to be attractive.

Source: NEXT 2019 Certifications Micro Survey utilizing a generally representative convenience sample of 900 US Consumers.

Page 18: Certifications - NEXT Data & Insights · consumers use certifications. Incidence and Importance of Certifications among Consumers Willing to Pay More for Healthy Products. Importance

© 2019 New Hope Network. All Rights Reserved. 21

47% 17% 8% 4%

Safety/Quality Organic/NonGMO Whole Grain Eco/Sustainability

Consider TURF to inform your efforts to reach the largest population.While there are a lot of ways to combine multiple certifications to improve your reach, and the most relevant certification types may vary by product category. Here are two examples that rose to the top of our analysis.

47% 12% 10% 4%Safety/Quality Eco/Sustainability Organic/NonGMO Gluten Free

TURF Analysis: Total Consumers Total Reach

76%

73%

Incremental Unduplicated Reach of Each Additional Certification

Source: NEXT 2019 Certifications Micro Survey utilizing a generally representative convenience sample of 900 US Consumers.

Page 19: Certifications - NEXT Data & Insights · consumers use certifications. Incidence and Importance of Certifications among Consumers Willing to Pay More for Healthy Products. Importance

Conclusion

Page 20: Certifications - NEXT Data & Insights · consumers use certifications. Incidence and Importance of Certifications among Consumers Willing to Pay More for Healthy Products. Importance

© 2019 New Hope Network. All Rights Reserved. 23

Conclusion Start with the basics; identify certifications relevant to:

– Your product category– Your target consumer

Look at what the data says about your competitors, category, and consumer

Shift your perspective: – Think of certifications as a marketing investment not a sales driver– Recognize that certifications communicate indirectly to a broad and

specifically to targeted audience– Use certifications to build trust and signal fit to target consumers

Page 21: Certifications - NEXT Data & Insights · consumers use certifications. Incidence and Importance of Certifications among Consumers Willing to Pay More for Healthy Products. Importance

© 2019 New Hope Network. All Rights Reserved. 24

Conclusion Use certifications to:

– Provide quality assurance– Reinforce brand value– Build trust– Create competitive differentiation– Signal the presence or absence of qualities that consumers seek or

avoid

Page 22: Certifications - NEXT Data & Insights · consumers use certifications. Incidence and Importance of Certifications among Consumers Willing to Pay More for Healthy Products. Importance

Eric PierceVP of Business Insights

[email protected]/in/ericjpierce/

Amanda HarttMarket Research Manager

[email protected]

Thank you!