The Arrival of ‘Free-of’ Food
Consumer desire for transparency is behind this up-and-coming trend.
Knowing where their food comes from — including how it’s grown or raised, and what went into it — is increasingly important to consumers, who are just as attracted to what’s in a product as what’s not. When it comes to purchasing fresh foods such as meat, seafood, dairy, produce and deli/prepared foods, the cleaner and simpler the profile, the more appeal it holds.
Some are calling this burgeoning trend the “free-of” movement and predict that its ability to positively affect fresh food sales will be significant in the coming months.
According to Meagan Nelson, associate director for Nielsen Fresh’s growth and strategy team in New York, the overarching theme driving this movement is consumers’ need for transparency. “People just want to understand what’s in their food and how it is produced,” Nelson says. “They want to know where the produce was grown, who the farmer is, how the beef cows or chickens were cared for, and what they were fed.”
Consumers are clearly aware of, and making conscious decisions about, what they put in their bodies these days. Research conducted by Schaumburg, Ill.-based Nielsen in 2016 found that 67 percent of consumers want to know everything that’s going into their foods. In addition, nearly three-quarters of consumers — 73 percent — feel positively about companies that are transparent
about where and how their products are made, grown or raised. More than half of consumers — 68 percent — said that they’re willing to pay more for food and drinks that don’t contain undesirable ingredients.
While it’s true that Millennials and Generation Z are a key force behind the free-of movement, Nelson believes that what’s happening is bigger than that, pointing out that consumers of all ages are looking to have more clarity in what they purchase. “People are so disconnected [from] the food system that knowing where a product is coming from, what’s in it and what they are putting in their body gives them some piece of mind,” she says. “Ultimately, it is about feeling good about the decisions they are making and being confident that the food they are spending their money on is safe.”
Food fear is a real issue today, notes Mindy Hermann, a New York-based registered dietitian nutritionist. She adds that social media is playing a key role in much of the fearmongering happening today and driving consumers’ desire to learn as much as they can about the food they eat. “People want to know if products have been exposed to or contain things such as trans fats, hormones, antibiotics, pesticides or added sugar, so they can make educated decisions about what they are buying,” Hermann says. “The more they know about where the steak came from, or the salmon, or the milk, or their produce, the more assured they are that the food they’re buying is fresh and safe.”
When he looks at the trends driving dairy and meat, David Browne, a Sacramento, Calif.-based market research and retail consultant specializing in the natural and specialty food industry, finds that aspects such as grass-fed, humanely raised and
People are so disconnected [from] the food system that knowing where a product is coming from, what’s in it and what they are putting in their body gives them some piece of mind. — Meagan Nelson Nielsen Fresh
animal welfare are leading the charge. Supporting his assertion are data from the most recent “Power of Meat” survey from Food Marketing Institute and the North American Meat Institute, which found that consumers’ desire for transparency in meat and poultry production is behind the double-digit growth in grass-fed, organic, and hormone- and antibiotic-free meats. “What this tells me is that clean, simple foods are beginning to show up on consumers’ radar,” Browne says.
While the free-of movement has been brewing in the natural channel for a while, Browne notes that it’s just starting to make its way into the mainstream. “Planned or not, this is playing right into the hands of Millennials, who want this transparency and thrive on the backstory of who this farmer is and how was this turkey or pig raised,” he says, adding that the free-of concept may be sustainable in the natural channel, but translating it to grocery — where volume demands are much higher — could pose a challenge.
Regarding current trends, Browne says that nongmo and even gluten-free are still experiencing what he would call a growth phase, and predicts that it will be several years before consumer interest maxes out. “It may be nearing maturity, but we are
still a long way off from seeing either of these trend downward,” he observes.
Shout it Out Loud
For free-of to take off, products will need to be aggressively merchandised on-pack and in-store. “I’ve seen this happen in other departments, such as bakery, where retailers really struggle with how to identify and properly merchandise certain so-called ‘healthful products’ in a way that makes them clearly distinguishable from the other offerings,” Browne says. The other roadblock to growth, he adds, may be store personnel: “Consumers are willing to pay more for products they feel resonate with their values and beliefs, but if none of the employees are able to answer shoppers’ questions about the item, then you risk losing the sale.”
Above all, Browne advises that for the free-of movement to work, there needs to be buy-in from the top and consistent messaging across all fresh departments.
To promote free-of, Hermann suggests that retailers consider using limited-time offers (LTOS) as a way to convey features such as freshness, seasonality, grown locally, made in small batches and available for just a short period of time. “LTOS are well suited for an end cap or specialty refrigerated case, and can be marketed in a way that encourages shoppers to check back with each shopping trip,” she says, noting that developing an easy-to-identify in-store or on-pack free-of symbol would also be a move in the right direction.
“Consumers want short cuts,” Hermann asserts. “They may have a long list of product attributes that appeal to them — or don’t — but at the end of the day, they want a quick and simple way to distinguish who the good guys and bad guys are.” Emphasizing the free-of aspects, she adds, is an ideal way to market to these consumers.
Further, given the declining interest in purchasing meal kits from online companies, this is an optimal time for grocers offering their own meal kit programs to boost their value-added appeal. Hermann notes that as a group, Millennials may not cook much, but prepared foods are an attractive substitute because they look like something that they would make themselves if they could cook. Giving them the backstory about the ingredients used in a dish, in a way, replaces having their own story, Herman says. “Instead of telling their husbands, wives or dinner guests that the meat loaf they are serving is grandma’s secret recipe, they can say the meat loaf is store-bought but comes from award-winning, grass-fed cows that have been pasture-raised since birth at Mcdonald’s Farm in Paducah,” she offers as an example.
Convenience, Hermann adds, doesn’t negate consumers’ interest in knowing as much as they can about where their food comes from. “If you want consumers to pay a premium for your fresh program, you need to do more than simply provide product — you need to stress authenticity,” she points out.
But more importantly, for food retailers to benefit from the free-of movement, industry observers such as Nelson stress that they must make sure to communicate the products’ value proposition. She reminds us that the more consumers understand about what they’re buying, the more connected they feel — something that’s particularly true in fresh departments. Also, given the number of options consumers have today, Nelson says that it would behoove grocers to tout the specialness of the products they carry.
“Highlighting or showcasing what is and isn’t in the food, how it’s made and produced, would go a long way in helping retailers distinguish themselves in the overcrowded, highly competitive prepared food market,” she observes. “At the end of the day, consumers still want convenience, but they want to understand what is unique about the prepared food their grocer is selling. The more distinctive it is, the more likely they are to buy it from their grocer versus another merchant.”
Looking forward, Nelson predicts that as online retailers push to take a bigger bite out of supermarkets’ share of business, grocers may look to cut back on center store square footage even further, to make room for more fresh offerings. “This is really where grocers shine, but to compete near-term will require them to dedicate more space to educate and demonstrate the value statements within the fresh space,” she says. “This is a critical next step if they hope to keep shoppers in the store longer.”
Consumers … may have a long list of product attributes that appeal to them — or don’t — but at the end of the day, they want a quick and simple way to distinguish who the good guys and bad guys are. — Mindy Hermann Registered Dietitian Nutritionist