If you want to go bananas trying to decide what's really going on in the food industry, a trip to the annual Food Marketing Institute convention in Dallas last week would have helped you fulfill that desire.
Business is good. Business is bad. People don't care as much about nutrition as they did. People care more. Inflation is a barrier to good nutrition. Inflation is an aid.
For the supermarket operator trying to figure out what customers want in the coming decade, there is bound to be a lot of head scratching.
According to one survey presented at the convention, 59 percent of the respondents are more interested in nutrition today than they were three years ago. According to another survey, a repetition of one done two years ago for Woman's Day magazine by Yankelovitch, Skelly and White, preoccupation with nutrition is less today than it was two years ago. While 80 percent of all the respondents in 1978 said they were more concerned about nutrition than they had been in the previous five years, that figure is now down to 72 percent. (Interest among the 23 percent who describe themselves as hardest hit by inflation is even lower.)
As proof that inflation is taking its toll on good nutrition, the Yankelovitch survey of over 1,200 women and men cites the increased consumption of carbohydrates such as macaroni, spaghetti, noodles and bread, and the decreased consumption of meat, but it doesn't make clear why that is bad. Do some people equate eating less expensive food with not eating nutritiously?
For example chicken is cheaper than red meat, but some experts say it is more nutritious. Consumption of chicken, while not up as much as it was compared with 1978, appears to be up considerably, even among those who say inflation is taking the greatest toll on them. At the same time, consumption for all segments of the population of soft drinks, bacon, cakes, cookies and sweets is down.
Nutrition experts would describe such a shift in eating patterns as a good sign.
No question inflation is having an impact, but the survey raises a serious question about its interpretation of the statistics.
What is clearer about the impact of inflation is that people are returning to the same penny pinching methods they have employed in other tight money periods, as well as adding some new techniques.
Fully one-third of the shoppers in the survey are simply going to the store less often and one-quarter are limiting the amount of money they take shopping. Over one-third buy store brands more often and one quarter are buying more generic products. Forty percent are making a shopping list and sticking to it, while 43 percent are buying fewer snack items and fewer impulse items. Sixty percent are doing more price comparisons and almost half are using cents-off coupons. About one-quarter are serving fewer convenience foods and some are even serving less at meals.
And when you separate those who feel the impact of inflation the most from the total population, an even higher percentage is engaged in all these economy saving measures.
While generics have been around for a few years now and cents-off coupons are bigger than ever, the newest wrinkle for saving money is the one which is posing the greatest threat to the traditional supermarket operators -- no-frills stores. In some areas of the country these warehouse and limited assorted stores have already captured as much as 12 percent of the business.
According to Robert Aders, president of FMI, an association of retailers and wholesalers, no-frills operations are "a semi-permanent part of the market, filling a consumer demand. No doubt," Aders noted, "They are cheap". The Yankelovitch survey bears out Aders assessment: 20 percent of the general population shops at such stores. The figure rises to 29 percent when only those who describe themselves as strongly affected by inflation are counted.
If traditional supermarkets cannot compete with the no-frills operations on price they have to offer something else in what is an increasingly competitive market.
This something else appears to be a greater diversity of products. The exhibition floor at the convention reflected this. The ratio of non-food to food items on display was much higher than it had been in previous years: Expanded lines of health and beauty aids; complete greeting card departments with wrapping paper and ribbon; accessories for car care; garden supplies, cut flowers, plants and all the accessories. Even the workshop which advised an expanded produce department because the consumption of fruits and vegetables is up also suggested all kinds of non-produce items for the department.
In other words, one-stop shopping in what are being called combostores. The general merchandise, or non-food items, carry a higher mark up -- 30 to 40 percent -- and according to Aders "will help to make up for losses in food items."
But there are some other changes in this country that will have an impact on the food industry and for a few years it seemed as if these changes would make economy a secondary consideration: The increasing number of women who work outside the home (over 50 percent now) and the increasing number of one-and two-person households.
But the 1980 Yankelovich survey finds that "under the impact of inflation . . . time pressures appear to give way to money concerns. Time is given as the priority reason for only three of a whole long list of changes -- and these are mostly moderate shifts. Buying take out food to eat at home and shopping for food near work." Ironically as many people say they are buying more convenience foods because it saves money as those who are doing so because they feel it saves time.
Despite ever increasing concerns about inflation, there are certain attitudes which have changed in the last 10 years, even though they may mean higher food costs.
A majority (66 percent) of the public still wants more nutritional information on the labels of products even if it adds a few cents to the price and 60 percent are willing to pay more for food in order to get increased government regulations for product safety. A startling 81 percent would pay more to have manufacturers date their products. On the other hand, only 48 percent think the use of pesticides should be stopped if it means that fresh fruits and vegetables may be less available and more expensive. This is one of the ironic findings of the study because 73 percent of the respondents describe themselves as either very or fairly concerned about the use of pesticides in food.
On the other hand 50 percent think artificial colors should be eliminated from foods even if they look less appealing.
Only 36 percent think preservatives should be eliminated from foods even if it means they won't keep as well, but 42 percent wouldn't care if saccharin were eliminated from foods and drinks.
One figure hasn't changed from 1978: 68 percent still think natural foods are healthier than processed foods even if the latter are vitamins enriched.
The number of people who think manufacturers should stop advertising to children even if it means fewer childrens programs has dropped from 61 percent, to 50 percent.
Fifty percent also think vending machines selling candies and chips to children in school should be banned, while 49 percent say there is no reason to deprive children of these snacks from time to time. On the other hand snacking is acceptable according to 87 percent of the population, as long as the snacks are nutritious things like nuts and fruits.
Confusing as the signals seem to be, in the last two years Americans haven't strayed far from their concerns about the importance of diet and exercise for good health, and food safety.
In all this there is a message not only for food retailers but for manufactures and the federal government as well.