Consumer Food Insights - March 2022

The results from the March edition (now issue #3) of our newly launch Consumer Food Insights (CFI) survey from the Center for Food Demand Analysis and Sustainability (CFDAS) at Purdue are now available.

This month, we continued tracking many of the key measures I’ve discussed in previous months. Here are some highlights:

• The Sustainable Food Purchasing (SFP) Index was unchanged from last month and it is at 68 out of 100.

• There was a slight decrease in the the share of consumers indicating they couldn’t find specific foods at the store (a fall from 25% to 21%) from February to March

• Total food spending increased by 8% from last month

• At present, we find consumer food demand is price insensitive.

This month’s report has several new analyses and questions. First, we conduced a deeper dive into how responses varied by consumer income. Higher income consumers tend to rate the sustainability of their diets as higher than do lower income consumers, particularly on dimensions related to taste, security, economics, and nutrition. By contrast, there was very little difference in high vs. low income on sustainability dimensions related to social and environment.

In addition to answering questions about how shopping behaviors relate to six sustainability dimensions, we also ask respondents to allocate 100 points to these six dimensions in terms of their importance when buying food. Perhaps not surprisingly, lower income consumers placed a higher weight on affordability than did higher income consumers. By contrast, higher income consumers placed more weight on taste and nutrition than did lower income consumers. There was little income difference in the weight attached to social responsibility, environmental impact, or availability across income categories.

Higher income consumers are happier with their diets and are much less likely to be waiting on their next payment to buy food for their household.

To track whether consumers are beginning to shop in a more price-responsive, or recessionary, manner, we asked if respondents would purchase a basket of brand name groceries priced at $100 or a comparable basket of generic name groceries priced at either $85 or $70 (the amount randomly varied across respondents). Higher income households were much more likely to say they’d choose branded over generic products than lower income consumers. However, for all three income groups, none were particularly sensitive to the change in price of brand vs. generic.

There are also income differences in support for food policies. Lower income households showed more support for policies like increasing funding for ag research, but they showed less support for fast food zoning and sweetened beverage taxes as compared to higher income consumers.

We added several new questions this month related to how food away from home spending varies by different type of outlet (and by in-person vs. drive through vs. delivery), and we added questions about consumers’ beliefs about various food-related issues. There was strong agreement that climate change will impact food prices, and less agreement that GMOs are safe or that plant-based milk is healthier than dairy milk. Perhaps an indication of chemophobia or general distrust of unknown substances, 26% agreed that food with deoxyribonucleic acid (i.e., DNA) is unsafe to eat.

There’s a lot more in the report. Check the whole thing out here.

Market potential of new plant-based protein alternatives: Insights from four US consumer experiments

That’s the title of a new article, co-authored with Glynn Tonsor and Ted Schroeder, that was just released by the journal Applied Economic Perspectives & Policy.

Here’s the abstract:

“This article reports results from four studies determining the US market potential for plant-based meat alternatives in different contexts and settings. The first study shows that a pair-wise choice between beef and a plant-based alternative was not significantly affected by the presence of nutrition facts panels or ingredient lists. A second study, framed as a food service meal choice, reveals that the introduction of a plant-based burger has roughly the same effect on beef sales as does the presence of a chicken wrap. The final two studies estimate own- and cross-price elasticities of retail demand. We find small cross-price elasticities between plant-based patties and ground beef. Each of the aforementioned results varies for regular meat consumers as compared to consumers who self-identify with an alternative diet such as flexitarian, vegetarian, or vegan. Combined, this study increases understanding of the impact presented by plant-based offerings in the US protein market.”

A bit more detail from the conclusions …

“Regular meat consumers are much less likely than those declaring an alternative diet (vegan, vegetarian, flexitarian, or other) to select a plant-based item when a beef item is available. The median willingness to pay and market share differences are substantial and documented in this research. Characteristics of consumers most likely to select plant-based proteins include younger, those with children under the age of 12 years, having higher household income, residing in a Western state, and affiliating with the Democratic party. Replacing a chicken item with a new plant-based protein offering on a food service menu has a small (less than 3%) impact on the frequency of selecting beef burger meals. Changes in the price of beef and chicken have a much larger impact on consumer decisions to buy beef than the impact of changes in the price of plant-based offerings. This means plant-based burgers are relatively weak substitutes for beef. Plant-based burgers have more elastic demands than hamburger and chicken breast for regular meat eaters. This suggests regular meat eaters will be more responsive to adjusting consumption to plant-based proteins as their prices change.

A key question relates to the ultimate US market share of plant-based protein products. This research indicates that if facing a binary choice between a plant-based alternative and traditional beef, around 25% of consumers select a plant-based alternative. However, a few caveats are worth mentioning. Some of the individuals who choose the plant-based alternative are unlikely to consume much (if any) beef. In this sense, growth in the market share of plant-based alternatives is not entirely coming at the cost of reduced beef demand and indeed if a plant-based alternative simply replaces a substitute competitor (like a chicken sandwich) or reflects overall growth in protein demand, the impacts on beef demand are likely to be negligible. Nonetheless, the fact that roughly a quarter of consumers indicate they would choose a plant-based alternative suggests there is ample room for this market to grow relative to the current position of limited market share. That is, our estimates suggest we will likely continue to witness growth in the plant-based alternative market even if all that changes is increased availability (and prices remain fixed at the status quo and consumer preferences and beliefs remain unchanged). Strong growth rates could occur for plant-based items, yet a smaller market share resulting. In fact, early in the COVID-19 pandemic, this occurred as retail sales of plant-based items jumped, but so did many other protein items (Meatingplace, 2020). Accordingly, plant-based item retail market share declined despite the growth of overall sales—an observation that conveys caution on using market-share measures.”

What is a Foodie?

Merriam-Webster defines a foodie as, “a person having an avid interest in the latest food fads.” Wikipedia describes a foodie as “a person who has an ardent or refined interest in food, and who eats food not only out of hunger but also as a hobby.” According to the same source, the word originated in the 1980s and it is apparently some “food insiders” do not like.

Despite the fact the descriptor has been used with increased frequency over the past couple decades, it is not a concept or term I’ve seen analyzed in any depth in academic or industry circles, a phenomenon that is a bit strange given the rising interest in food and emergence of the “food movement.”

To delve into the concept a bit, I added a couple simple questions on a nationwide online survey of over 1,200 U.S. households I conducted about a year ago. I first asked, “Have you previously heard the term: "foodie"?” 87.1% said “yes” and 12.9% said “no.” For the people who said “yes.” I asked, “would you call yourself a “foodie””? 38.2% said “yes.,” 48.3% said “no,” and 13.5% said “I don’t know.” This means out of the entire adult U.S. population, about a third has heard the term “foodie” and considers themselves a “foodie.”

How do these self-declared foodies differ from the rest of the population? To answer this question, I compared the 463 people who had heard the term “foodie” and described themselves as one to the 585 people who had also heard the term but definitively said “no” they were not a foodie. Here are some of the biggest differences:

• Foodies are younger. Of people who described themselves as a “foodie”, 35.4% are younger than 35 years of age; of people who said “no” they’re not a foodie, only 21.7% were younger than 35.

• Foodies have higher education. Of people who described themselves as a “foodie”, 38% have a college degree compared to only 18.5% of non-foodies.

• .Foodies have higher income. Incomes of foodies are about 12% higher on average than non-foodies.

• Foodies are more likely to be vegetarian or vegan. 5.8% of foodies said they were vegetarian or vegan compared to only 2.2% of non-foodies.

• Foodies are more likely to have children at home. 34.8% of foodies have a child under the age of 12 at home compared to only 16.8% of non-foodies.

• Foodies are more likely to be politically liberal and be members of the Democratic party. Of people who described themselves as a “foodie”, 47.3% are Democrats compared to only 38.1% of non-foodies.

• Foodies spend more money on food. Self-declared foodies spend about 45.8% more each week on food at home (i.e., through grocery stores) and about 18.8% more each week on food away from home (i.e., restaurants) than non-foodies.

There were not particularly large differences in region of residence (foodies are a bit more likely to live in the Southern U.S.), gender (foodies are a tab bit more likely to be male), or race (foodies are a bit more likely to be non-white).

We also asked people the extent to which they agreed or disagreed with various statements about food. Here’s the breakdown showing the mean response of each group on a 1 = strongly disagree to 5 = strongly agree scale.

Foodies are more likely to agree that they are “passionate about food” and that they are “a food connoisseur.” They are slightly less likely to see food in utilitarian terms - viewing food as a fuel or as a necessity.

Previously, I mentioned foodies spend more on food, but perhaps that’s because they are also higher income? To explore this question, I estimated Engel curves that show how spending on food varies with income for both foodies and non-foodies. As the figure below shows, at any given income level, foodies spend more of their income on food than do non-foodies. This holds both for food at home and for food away from home.

It is also the case that at any given income level, foodies spend a higher share of their income on food at home vs. food away from home than non-foodies (note: these data were collected in February 2021, so results might be somewhat affected by COVID shutdowns).

Taken together, the figures above suggest foodies are a highly relevant category of consumers for grocers - they spend more on food and a larger share of their income on food through grocery than do non-foodies.

Finally, we asked an open-ended question of people who had heard the term: “In a few words, describe a "foodie““ Here’s a word cloud constructed from the responses.

Consumer Food Insights - February 2022

I’m pleased to share the 2nd edition of our new Consumer Food Insights (CFI) survey (check here for more background and results from the inaugural release).

Overall, we observed a high degree of stability in a number of our measures including the Sustainable Food Purchasing Index, preferences for food policies, and food/diet happiness and satisfaction, and shopping behaviors. While it perhaps isn’t exciting to report little to no change in many of these measures, it does suggest reliability in our survey methods and points to the fact that we are getting at fundamental measures of consumer attitudes and behaviors that are stable across time. It also suggests that when we do observe significant changes in the future, we can be more confident that fundamental shifts are occurring rather than just picking up sampling error or spurious fluctuations.

We did observe an increase in consumers’ food price inflation expectations and a corresponding increase in consumers’ spending on food at home and away from home. Increasing inflation expectations are a bit worrisome because expectations of future price increases can lead to a self-fulfilling prophesy. That is, if consumers expect prices to continue rising, they ask and demand more compensation from their employers and clients, which leads to increased demand for goods and higher prices.

That said, it is interesting that consumers’ perceptions of how much food prices have increased over the past year is quite a bit lower than the official data on food price increases reported by the Bureau of Labor Statistics. The Bureau of Labor Statistics reported that prices of food at grocery increased 7.4% over the course of the past year (see our handy data dashboard on food price changes); however, the consumers in our survey said, on average, said they thought food prices had increased “only” 5.2% over the past year. Apparently consumers’ aren’t “feeling” inflation as much as the official data suggests. This may be a result of the fact that consumers can adjust to higher prices in a variety of ways by, for example, substituting to lower price alternatives or shopping on sale or at discount retailers.

When we directly asked consumers how they were responding to increased food prices, the most common answer (selected by 31% of respondents), was that they had made little to no change in their shopping habits, which suggests wage and income growth, coupled with savings, have not led to major shifts in consumers’ buying habits. The second most common answer, selected by 24% of respondents, was that they sought out more sales and discounts. Fewer than 1 in 10 said they searched for better prices online or spent less on other goods to maintain food consumption.

Through another ad-hoc question, we delved into mandatory GMO labeling. As of January 1st, 2022, certain foods that are genetically modified in a way that is not possible through conventional breeding are required to disclose that they are “bioengineered” or “contains a bioengineered ingredient.” Food companies can choose how they wish to disclose – either via a new symbol/label on the food product, through text on the food package, or through a QR code or phone number on a food package.

Given the newness of this policy, we were curious how food companies were responding and whether consumers were aware of the new disclosure requirements. Over two-thirds of respondents indicated that they have not seen the bioengineered label on food packages. Of that group, 87% had never seen the labels before, with the remaining 13% being familiar with the label but not yet encountering it in the store. Only 19% of consumers were sure they had seen the label in the store. Of this group, only 37% said they always check for it when shopping.

Launch of Consumer Food Insights

I’m pleased to share the results of a new, monthly survey of U.S. food consumers, we’ve named Consumer Food Insights. Consumer Food Insights is a monthly survey of more than 1,200 Americans from across the country, and it is the one of the products of the new Center for Food Demand Analysis and Sustainability (CFDAS) that we launched this fall. With the survey, we seek to better understand changes in our national food environment and help businesses navigate their supply chains. Consumer Food Insights reveals where, how, and what food U.S. consumers bought and ate, with a focus on the implications for food systems at the national scale.

One set of questions aims to track self-reported sustainability of food purchases along five different dimensions.

There are many cool insights from the new survey, and you can read a summary of this month’s results here. Some highlights from this month’s survey include:

• 21% purchased their last groceries online

• 32% are waiting for their next paycheck to buy groceries again

• 16% are food insecure

• 46% ate home-cooked meals 4-6 times per week

• 11% identified as a vegetarian or vegan

• 25% unable to find a specific food product at the grocery store, most commonly listing items like chicken, beef, dairy, and bread products

• 87% said they’re happy with the food their diet

• Food spending averaged $158/week.

Some of the additional measures we’ll be tracking every month are illustrated below.

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We will also be adding timely questions in response to ongoing events. This month, we added a question related to perceived causes of the increases in meat prices over the past year. Of note, market concentration in the meat packing industry has received national media attention in recent months. The Biden administration argues that industry consolidation is partly responsible for climbing grocery prices. What do consumers think? As indicated below, a relatively small percentage of respondents attributed high prices at the store to concentration and market power. A majority of respondents (51%) blamed COVID-related shutdowns for the increase in meat prices over the last year, but the top five causes also included labor shortages across supply chains, higher prices for animal feed, higher energy prices, and higher wages across supply chains.

There’s a lot more, including links to the underlying methodological details, available here.

Are you interested in additional analysis or adding questions to the survey?  Consider joining our consortium of Consumer Food Insights members.

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P.S. This new survey effort is designed to complement the ongoing Meat Demand Monitor (MDM) that Glynn Tonsor is running at Kansas State, and it is a follow-up to and evolution of the Food Demand Survey (FooDS) project I ran from 2013 to 2017.