Shoppers Willing To Spend Extra For Ingredients They Recognize
Most shoppers today are more aware of the food and beverage products they buy. They opt for products made from organic and natural ingredients, and they value the transparency of product labels more than ever before.
In a recent survey conducted by Ingredients Communications, it revealed that 52% consumers are willing to spend 10% more on food products that contain ingredients they trust and recognize. The survey interviewed 1,300 consumers from North America, Europe, and the Asia-Pacific. The survey also noted that 18% of the respondents are willing to pay more than 10% for reliable brands.
Consumers from the United States are the ones most prepared to pay extra to 44% of the respondents responding yes. This is followed by shoppers from the Asia-Pacific including the Philippines (29%) and Malaysia (26%) indicating that Asia is an emerging market for food companies who want to improve their transparency and recognizability of the ingredients they use.
Co-Branding Allows Shoppers to Recognize Reliable Products Easily
So, what does this survey imply? It simply points to the importance of having clean labeling on food and beverage products. Consumers are becoming aware that many food companies are now using synthetic or artificial ingredients to make their products. These ingredients are now known to cause negative side effects to the body. The movement of going back to basics which include buying products made from all natural ingredients is becoming popular. Food manufacturers are using this movement to their advantage by rebranding their products and co-branding with their suppliers.
Co-branding has become hugely popular in the clean labeling movement. According to the director of Ingredient Communications, Richard Clarke, co-branding has been used in the tech industry to sell products like laptops. If the food industry uses it, it will be easier for the consumers to know which brands to trust because they have partnered with other reliable brands and ingredient suppliers. This will result in higher spending, repeat purchase, and stronger loyalty to the company.
While co-branding is a great way for shoppers to easily recognize the ingredients and brand of the product that they want to buy, it may lead to higher prices. This leaves food companies to shop around from among its co-branded suppliers to find ingredients that are also cheaper. Successful branding is still resulting in more revenues because shoppers are willing to pay more for products that are made from familiar ingredients.
Shoppers Make Informed Decisions When Shopping
While co-branding is a great strategy to make ingredients more recognizable to the consumers by partnering with equally reliable companies, there are other factors that influence the product choices and decisions of consumers. Today, many consumers are very critical about the decisions that they make when it comes to buying different types of products. With their savvy abilities and increasing awareness, they are able to recognize which ingredients are good and which ones are not. The ability to distinguish the good from the bad ingredients make consumers want to pay more.
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