the new conversation about sweeteners - high fructose corn syrup …€¦ · · 2015-12-30are...

1CHANGING CONSUMER PERCEPTIONS AND THE IMPACT ON CONSUMER PURCHASE DECISIONS1 THE NEW CONVERSATION ABOUT SWEETENERS

THE NEW CONVERSATION ABOUT SWEETENERS: CHANGING CONSUMER PERCEPTIONS AND THE IMPACT ON CONSUMER PURCHASE DECISIONS

2 THE NEW CONVERSATION ABOUT SWEETENERS

AMERICAN CONSUMERS ARE MUCH MORE CONCERNED ABOUT TOTAL SUGARS IN THEIR DIET THAN ABOUT ANY SPECIFIC SWEETENER.THE CONVERSATION ABOUT SWEETENERS IS CHANGING IN AMERICA, AND THERE ARE BIG IMPLICATIONS FOR FOOD AND BEVERAGE PRODUCT MANUFACTURERS.

3CHANGING CONSUMER PERCEPTIONS AND THE IMPACT ON CONSUMER PURCHASE DECISIONS

American consumers have expressed clear interest in healthier eating and balanced nutrition, and one of the things they are concerned about surrounding that topic is the amount of total sugars in their diet. In fact, research shows that consumers avoid added sugars more than any other ingredient; however, their focus is not on any one type of sweetener, but rather the amount of sweetener in a product.

HFCS and sugar have the same number of calories. However, in terms of cost and versatility, HFCS has no equal.

For the past several years, some food and beverage companies have been focusing on and changing the type of sweetener they use. But sales data over the same period clearly shows that changing the type of sweetener had no significant positive effect on sales.

While there has been media coverage about specific sweeteners in high-profile outlets such as “60 Minutes,” “CNN” and The Wall Street Journal, consumer attitudinal research from Mintel Research Consultancy and shopper behavior data from The Nielsen Company tells a different story.

For manufacturers to meet both the needs of their consumers and their business, smart nutritive sweetener decisions are essential. This white paper outlines expert third-party research and highlights sweetener-switching cases that demonstrate that consumers are more concerned about total added sugars than any one type of sweetener—helping food and beverage manufacturers make more informed decisions.

IF YOU’VE FOLLOWED THE HEADLINES OVER THE PAST FEW YEARS, IT CAN SEEM LIKE CONSUMERS ARE CONCERNED ABOUT HIGH FRUCTOSE CORN SYRUP (HFCS), BUT INDEPENDENT RESEARCH TELLS A DIFFERENT STORY.

“ AMERICAN CONSUMERS ARE MUCH MORE CONCERNED ABOUT TOTAL SUGARS IN THEIR DIET THAN ABOUT ANY SPECIFIC SWEETENER.”


CONSUMER ATTITUDES ABOUT SWEETENERS AND HFCSAccording to current third-party research, as consumers have shifted their attitudes on sweeteners, some marketers have continued to make decisions to meet a demand that is really not there. Perceived avoidance from consumers has driven some brands to launch new “HFCS-free” products.

While the results of extensive research of 2,400 primary household grocery shoppers completed by Mintel Research

Consultancy in October 2012 showed that consumers are indeed avoiding added sugars more than any other ingredient (including fats/oils, sodium, soda or red meat), only a small percentage were avoiding an individual type of sweetener like HFCS.

In the survey, Mintel examined 12 high-volume food and beverage categories, including packaged bread, carbonated beverages, ketchup, cakes/cookies/pastries,

fruit juice, cold cereal, flavored milk, jams and jellies, sports drinks, yogurt/yogurt drinks, spaghetti sauce and salad dressings. In these categories, only 3 percent of shoppers indicated that they were specifically avoiding HFCS, compared to 21 percent of shoppers who said they were avoiding total added sugar.

WHAT ARE CONSUMERS DEMANDING? LESS ADDED SUGAR.In the last six months, have there been any particular foods, beverages, or specific ingredients that you and your family are trying to consume less of or avoid? (UNAIDED)

Source: Mintel 2012; N = 2,400

Q3. In the last six months, have there been any particular foods, beverages, or specific ingredients that you and your family are trying to consume less of or avoid? (multiple responses accepted)

* “HFCS” includes HFCS and corn syrup

22%

21%

17%

13%

8%

5%

4%

3%

3%

3%

Not avoiding or purposefully consuming less

Sugar, added sugar

Fats/oils, hydrogenated fats

Salt/sodium

Soda/carbonated beverages

Carbohydrates/white foods

Fast food

High fructose corn syrup

Processed/packaged foods

Red meat

Package Bre

ad


When looking specifically at each of these 12 high-volume food and beverage categories, the percentage of consumers indicating that they avoid HFCS when buying products ranged from less than 1 percent to 2.9 percent. For example, only 2.7 percent of consumers are avoiding HFCS when buying packaged bread, 1.9 percent when buying fruit juice, and only 0.7 percent are avoiding HFCS when buying salad dressings. What shoppers are more concerned about is added sugar than HFCS specifically.

Q11. You said that you consider sugar or other sweeteners when buying …… Please tell us why. (Open-ended response = “Avoid/dislike HFCS”)

Source: Mintel 2012; N = 2,008

SHOPPERS ARE FAR MORE CONCERNED ABOUT ADDED SUGARS OVERALL THAN ABOUT HFCS SPECIFICALLY

Category shoppers specifying HFCS as a concern when buying products

Category shoppers who consider sugar/sweeteners when buying products

36%

60%

21%

43%

56% 54%

29%

45%42%

52%

24%

35%

2.7% 2.2% 2.1% 2.0% 1.9% 1.9% 1.7% 1.5% 1.5% 1.3% 1.3% 0.7%

Yogurt & Yogurt

Drinks

Spaghetti Sauce

Salad D

ress

ings

Sports D

rinks

Jam

s & Je

llies

Flavore

d Milk

Cold C

ereal

Fruit

Juic

e

Cakes/Cookie

s/Past

ries

Ketchup

Carbonate

d Bevera

ges

Package Bre

ad


“ HFCS AVOIDERS” – WHAT PART OF THE POPULATION?

RESEARCH SHOWS CONSUMERS AVOID ADDED SUGARS MORE THAN ANY OTHER INGREDIENT. ONLY 2.9% OF CONSUMERS AVOID HFCS SPECIFICALLY.

Source: Mintel, October 2012; N = 2,400

EATERS: 20.3% SUGARS CONCERNED: 58.4% SUGARS AVOIDERS: 21.3%

79.7% OF CONSUMERS ARE CONCERNED ABOUT TOTAL SUGARS.

aided

HFCS CONCERNED:aided 23.1%

HFCS AVOIDERS:unaided 2.9%

unaided


UNDERSTANDING AIDED VS. UNAIDED QUESTIONINGTo put consumer attitudes in perspective, it is important to understand aided versus unaided questioning in surveys, such as the unaided one Mintel conducted. Market researchers know that a gap exists between aided and unaided responses from consumers.

Aided questions, by definition, suggest answers. Many people typically agree to suggested answers, given the natural human tendency to be agreeable and not to appear ignorant or apathetic. This type of questioning can create false positives in survey results, leading to misreading of true consumer attitudes.

By contrast, unaided questions, which are open-ended with no menu of possible answers, reveal what is really top of mind in the respondent. For instance,

“In the last six months, have there been any particular foods, beverages, or specific ingredients that you and your family are trying to consume less of or avoid?” Because the survey doesn’t suggest “correct” answers, responses can often result in more accurate insights into consumers’ true attitudes and likely behaviors, providing valuable data for business.

When used in proper combination, an aided/unaided approach to questioning consumers usually provides better understanding of attitudes, enabling marketers to conduct better business decisions.

Keeping these methods of questioning in mind, concerned consumers identified in the 2012 Mintel survey were categorized in three ways:

• Sugars Avoiders: Say they avoid or limit sugars on an unaided basis. This segment includes HFCS Avoiders—those who mention HFCS specifically on an unaided basis.

• Sugars Concerned: On an aided basis, say they limit all sugars, or that total sugars matter more than HFCS. This segment includes HFCS Concerned—those who say on an aided basis that they limit or avoid HFCS specifically.

• Eaters: No concerns about sweeteners in foods and beverages.

While there is some demographic split within the segments—with women mostly comprising the Sugars Avoiders group, and the Eaters category skewing male—research shows that common perceptions about those who avoid HFCS do not play true when one digs deeper into the demographics and segments.


WHAT CONSUMERS ARE REALLY AVOIDINGAs conclusively shown in research by Mintel and Nielsen, people are avoiding sugar more than any other ingredient; however, it’s important to understand what consumers say versus what they do. While consumers may be expressing concern about many ingredients, this concern does not necessarily affect their purchase decisions.

Consumer behaviors were shown to be similar when dining out at restaurants. A 2012 Family and Casual Dining Survey from NPD Group showed that only a small sliver of consumers (4 percent) specifically visit a restaurant because it has removed HFCS from a menu item, even though 51 percent of diners say they had tried to minimize or eliminate their use of a certain food, beverage or food ingredient in the past six months. Of the top items that people are avoiding, HFCS was mentioned by fewer than 1 percent of those surveyed, compared to other ingredients.

Surprisingly, businesses still consider a switch from HFCS. Why? Often it results from distraction due to inaccurate information, skewed perceptions and research that doesn’t mirror the actual consumer behavior.

OF THE NEARLY 50 PERCENT OF THOSE POLLED WHO SAY THEY ARE REGULARLY READING PRODUCT LABELS FOR CATEGORIES LIKE CALORIES, FATS, SODIUM AND CARBS, 28 PERCENT SAY THEY ARE SEEKING INFORMATION ABOUT SUGAR, WHILE ONLY 5 PERCENT ARE CONCERNED ABOUT HFCS AND HFCS SPECIFICALLY.

50%WHO SAY THEY ARE REGULARLY READING PRODUCT LABELS FOR CATEGORIES LIKE CALORIES, FATS, SODIUM AND CARBS

28%

5%are concerned about HFCS and HFCS specifically

say they are seeking information about sugar


Millions of consumers have already heard misleading information about HFCS due to intense high-profile news coverage resulting from soda bans and similar issues that have increased sweetener awareness.

It’s not just news coverage that is creating confusion. Social media also perpetuates the appearance of consumer concern that isn’t there. In social media outlets, HFCS may sometimes appear to be trending, yet more than 60 percent of posts on the subject are by people who post only once or twice a year, with

THE CHATTERanother 15 percent of posts on HFCS from people paid to do so, or from automated bots. Even so, perception from consumers is often heightened by these types of posts.

In fact, the most vocal criticism of HFCS may not be from consumers at all, but could be coming from those who may have a financial interest in the discussions. According to social media expert Katie Delahaye Paine, CEO, KDPaine & Partners, when monitoring issues on social media platforms, “We need to take into account the motivations of some commentators seeking to create false controversies. A high volume of comments on sites such as Facebook and Twitter does not necessarily translate into high consumer interest.” These commentators represent a very small number of consumers.

Despite what has been reported in the headlines or has been posted on blogs, HFCS is really not a hot topic of conversation. Posts about overall sugar content are 30 times greater than those about HFCS. In fact, HFCS mentions in social media represent only 1 percent of social media conversation about nutritional ingredients.


LOW SEARCH VOLUME FOR “HFCS” INDICATES LOW INTEREST

SEARCH VOLUME ON “SUGAR” NEARLY 45 TIMES GREATER THAN FOR “HFCS”—A SIGN OF CONSUMER PRIORITIES.

*”High Fructose Corn Syrup” search combines commonly used terms, “High Fructose Corn Syrup and “Corn Syrup.”

Source: Google Trends; scale is based on the average traffic in U.S. only

SEARCH VOLUME INDEX52 WEEKS ENDING

“HIGH FRUCTOSECORN SYRUP”

“STEVIA” “SODA” “SUGAR”

Jul 26 2009 1.4 1.3 11.8 42.2

Jul 27 2010 1.3 1.3 12.6 42.9

Jul 26 2011 1.3 1.3 13.5 47.1

Jul 24 2012 1.2 1.5 15.4 53.6


While the vocal minority may be noisy, facts tell the real story when it comes to switching sweeteners. According to Google Trends, the search results for “sugar” are at an all-time high over the last four years, and they are at an all-time low for HFCS. Searches for information on sugar were nearly 45 times greater than searches for HFCS, another sign of consumer priorities. What that means is that the type of sugar is less interesting to consumers than the total amount of sugar they are consuming.

So why all the chatter? Recent research sheds some light into the psychological motivations related to fear or personal image and peer acceptance. In late 2011, Dr. Brian Wansink of Cornell University, renowned author and expert on consumer behavior and nutritional science, investigated emotional drivers behind “ingredient food fears.” There were two motivations

that led consumers to avoid a certain food: first, a strong, principled proof-based belief or sense that an ingredient is harmful; and, second, a strong need for social desirability potentially related to one’s self-identity.

In other words, negative attitudes toward a food ingredient could merely be a reflection of political or peer group beliefs, and could be a vehicle for self-expression. What Dr. Wansink labels “The Prius Effect” (named after the car) is when a small minority of people are motivated to project a certain image about themselves. This small minority of HFCS avoiders value socially desirable behaviors more than those who don’t, and they want to demonstrate that attribute to friends. Interestingly, Dr. Wansink’s research also shows that while these consumers project this image on themselves, and it may show up when surveyed, consumers don’t necessarily act on this image when they shop, and it may not equate to purchasing behavior.

While businesses can be distracted by media noise, they need to understand that there is a big gap between what people say and what they do, regardless of potential fears or the personal image consumers are attempting to create.


In terms of purchasing decisions, research shows that the overwhelming majority of consumers don’t respond to manufacturer strategies based merely on switching the type of sweetener. Still, many companies have incurred the expense of switching from HFCS to sugar because they believe that consumers are demanding it, despite the fact that the data does not prove it.

The performance of the 25 leading brands selected in these categories—tracked over three to four years—confirms that an HFCS-free strategy, regardless of execution, was not always effective in driving sales.

There were several sweetener strategies tried by manufacturers—replace, extend, promote, reduce and maintain. Those manufacturers that took the replace approach switched one type of sweetener for another. When extending the brand, the manufacturer offered a new type of sweetener and left the existing product

HFCS-FREE? CONSUMERSAREN’T BUYING IT

Nielsen shopper data tracked sales performance of brands that switched from HFCS to sugar in more than 3,200 SKUs across 25 leading brands in three major project categories—beverages, baked goods and prepared foods.

unchanged. Companies that used a promote strategy used the replacement strategy and also promoted the fact that this was done—perhaps with package-label callouts to notify consumers of the change. Those that took the reduce route focused on the level of sweetness, with several brands offering lower-sugar line extensions. Those that opted to maintain did not make changes in the face of the competitor response.

BEVERAGES BAKED GOODS PREPARED FOODS

Soft Drinks

Ready to Drink Teas

Juice Drinks

Sports Drinks

Refrigerated Yogurt Drinks

Fresh Bread

English Muffins

Bagels

Rolls

Buns

Snack Crackers

Canned Soup

Condiments

Syrup

Granola

Source: Nielsen, September 2012

Miracle Whip brand dominates its category with more than a 90 percent dollar share. The company replaced its sugar/HFCS blend to 100 percent sugar in May 2009, but it then went back to HFCS again in September 2011. Due to its fan devotion to product taste and texture, the sweetener formulation was not an issue, and

sales remained flat both times that Miracle Whip switched sweeteners. The company’s experience showed that people eating Miracle Whip are not really concerned about HFCS. As a result, Miracle Whip returned to the HFCS blend and saw lower ingredient costs while maintaining fan expectations on product taste and texture.

TO ILLUSTRATE SOME EXAMPLES OF THESE STRATEGIES,THE RESULTS ARE EXAMINED:


APPROACH DESCRIPTION

Replace Reformulate brand without promotion

Extend Offer HFCS-free extension

Promote Reformulate brand with heavy promotion(including package label call-outs)

Reduce Offer lower-sugars line extension

Maintain Stay with HFCS

MIRACLE WHIP


Heinz is the dominant brand in ketchup. Its sweetener strategy was to extend the brand by launching a low-salt, HFCS-free product called Simply Heinz. Shoppers responded favorably to the reduced-sugar, reduced-sodium line extension, despite it being a premium-priced version. However, this switch really didn’t grow the flagship brand’s market share. If anything,

this addition cannibalized the company’s existing base by about a 7 percent market share, driving those consumers to the premium-priced version. This new product was only 2 percent of Heinz’s overall sales, but accounted for 23 percent of its sales growth. Ultimately, Heinz ketchup total volume share has remained virtually unchanged.

Hunt’s brand of ketchup (which has 15 percent of category share) took the promotional route in its sweetener strategy when it replaced the sweetener type. However, its brand reformulation still did not pay off, as consumer demand for HFCS-free ketchup was not as strong as expected, and the company experienced no growth in volume after switching from HFCS to sugar. In fact, Hunt’s brand dollar sales share trend has declined steadily since reformulation to HFCS-free. The brand later switched back to HFCS.

In the ketchup examples, research found that shoppers were more concerned with total sugars than with any specific sweetener. While one in five shoppers considered overall sugars when purchasing ketchup, only two in 100 shoppers mentioned HFCS as a concern. What is interesting is that most of those polled were more concerned about sodium information when buying ketchup, which may be why Simply Heinz did well.

HEINZ

HUNT’S BRAND


Capri Sun switched from HFCS to sugar and then back again. During this time, advertisements did not feature HFCS-free messaging either before or after reformulation, and its sales did not change at all. Capri Sun had spent a lot of money to switch to sugar, yet consumers didn’t focus on the type of sweetener, but rather its level. The Roarin’ Waters formulation, on the other hand, which is HFCS-

sweetened, touts reduced sugars. Roarin’ Waters kept the HFCS in the product during the entire time Capri Sun had made its changes in sweeteners. Sales of the Roarin’ Waters line extension increased dramatically in two years by simply promoting reduced sugars. The sales have since leveled off. Roarin’ Waters has 30 calories versus the Capri Sun original product at 60 calories. The brand came up with the Roarin’ Waters HFCS-sweetened high-growth product geared to health-conscious parents and still was successful. This approach again reflects the fact that lower sugars overall, not a specific type of sweetener, is what matters to primary shoppers, and that was what the brand purposely leveraged in its marketing.

Powerade competes against Gatorade, which invented the energy-drink category and is the dominant player. However, Gatorade’s market share dropped from 30 percent to 27 percent when it made the switch from HFCS to sugar. Since then, the energy drink sees the normal seasonality volume increases due to spring/summer

retail promotions. Powerade, on the other hand, did not follow Gatorade’s lead and maintained its HFCS formulation when Gatorade switched to sugar. During this time, Powerade saw its shares rise from 8 to 11 percent (about the amount of share Gatorade lost).

CAPRI SUN

POWERADE


As explained in the aforementioned examples, switching sweeteners doesn’t necessarily equate to a gain in sales volume or share.

None of these brands grew significantly in volume or share when switching from HFCS to sugar, and that was because consumers seem to be concerned about levels of sugar, not type. As Nielsen confirmed in its data, brands that switched the type of sweetener, regardless of execution, were not necessarily effective in driving sales.

WHAT STRATEGIES WORKED BEST?

IN TERMS OF GROWTH, LOWER SUGARS ARE LEADING THE WAY.

BRAND APPROACH OUTCOME

Miracle Whip Replaced without promotion Switched back to HFCS

Heinz HFCS-free line extension Maintains HFCS-free line

Hunt’s Replaced with promotion Switched back to HFCS

Capri Sun Lower-sugars line extension with HFCS Dramatic sales growth

Powerade Maintained HFCS formulation

Slight gain in market share over HFCS-free Gatorade


In the product examples listed above, we can take away a few key points:

• Those companies that relied on the promotion strategy learned that it was costly and saw little or no net growth.

• Those that extended their product line with HFCS-free products learned that such products could cannibalize their existing line while also meeting a niche demand.

• Those that reduced total sugars saw growth by aligning with consumer needs.

• Far more consumers are interested in reduced sugars as opposed to switching sweetener type.

• It also takes a lot of time for these brands to switch sweeteners and then undo the changes they made in sweetener type. Capri Sun, Miracle Whip and Hunt’s all returned to HFCS after switching to sugar.

Additionally, public perception may be that “HFCS-free” is a major trend, but the fact is that only a limited number of HFCS-free products are in a smattering of categories, compared to those products with lower added sugars. In fact, Mintel shows that only 2 percent of all food and beverage products launched in the United States in 2011 were HFCS-free. That means that of the 20,000 new food and beverage products launched, only 400 of them were HFCS-free. This small number of HFCS-free products reflects the overall low consumer demand seen in the sweetener switching that Nielsen tracked above.


FACT: ONLY 2% OF ALL FOOD AND BEVERAGE PRODUCTS LAUNCHED IN THE U.S. IN 2011 WERE HFCS-FREE.

Source: Mintel GNPD, 2011

PERCEPTION: HFCS-FREE IS A MAJOR TREND.

FOOD & BEVERAGE PRODUCTS LAUNCHED (USA)

Total New Products Launched

25,000

20,000

15,000

10,000

5,000

02010

21,00020,050

328 419

2011


WHAT DOES THIS ALL MEAN?Most companies that switch from HFCS believe that consumers are demanding it. But attitudinal research from Mintel, and the shopper behavior and four years of SKU data from Nielsen, shows that consumers want to reduce total added sugars.

The overwhelming majority of consumers don’t respond to strategies based merely on switching the type of sweetener. They are, in fact, more interested in total sugars. And it seems that the concern about HFCS is misrepresented by high-profile media coverage that is inauthentic and doesn’t reflect consensus in the scientific community on consumer habits. The data shows that changing the type of sweetener usually has no effect on sales.

Manufacturers must think about whether or not they are assuming unnecessary costs to develop or promote HFCS products that few of their consumers care about. Third-party data shows that only one strategy has been effective in growing sales volume and market share—and that results from product formulations that align with consumers’ true needs, like reducing overall sugar content. That is what this conversation is telling us.

For more information, visit www.cornnaturally.com.

GET THE FACTS:• Millions of consumers have

heard misinformation about HFCS.

• Intense media coverage of soda bans and similar issues has boosted awareness of sugar and HFCS.

• Few consumers say they limit or avoid HFCS; the vast majority is far more concerned about total added sugars and balanced nutrition.

• Consumers show their needs in what they buy—and “HFCS-free” has little demand.

• Some marketers have made decisions about product formulations without a full or up-to-date view of consumer attitudes toward nutritive sweeteners.

• Now top brands are staying with or returning to HFCS based on a better understanding of consumer interests and needs.

ABOUT MINTEL RESEARCH CONSULTANCYMintel Research Consultancy is an independent, award-winning provider of world-leading marketing intelligence, delivering robust information, analysis and critical recommendations. Its trusted portfolio of proprietary industry solutions and products has been supporting high-profile clients in key sectors such as FMCG, financial services, media, retail, leisure and education for over 38 years.

ABOUT THE CORN REFINERS ASSOCIATION (CRA)The Corn Refiners Association is the national trade association representing the corn refining (wet milling) industry of the United States. CRA and its predecessors have served this important segment of American agribusiness since 1913. To learn more, visit CornNaturally.com.

the new conversation about sweeteners - high fructose corn syrup …€¦ · · 2015-12-30are...

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