The sentiments in the old country song, “The Hand That Rocks The Cradle Rules the World,” have always been true. But now, more than ever, that truth is evident as a growing consumer type – the hybrid consumer – rises to the fore. And those who produce, process and market food products ignore that truth at their own peril.

Hybrid consumers are those who shop at the extreme ends of the retail spectrum and ignore the more popular mid-level brands. Generally characterized by women who are enjoying greater financial empowerment and Millennials, a Rabobank report indicates that this growing consumer segment will increasingly polarize the food market.

Hybrid consumers trade down in basic grocery categories and trade up in product categories that are socially and emotionally significant to them, according to a report by the Food & Agribusiness Research and Advisory group at Rabobank.

“Because hybrid consumers are less focused on mid-market products and brands, they often trade down when it comes to purchasing everyday value-for-money items like basic groceries,” the report says. “However, these same consumers may use the money saved trading down to trade up to premium high-end products that matter most from an emotional and social perspective, such as designer shoes, the latest smartphone, high-end coffee varieties, fine dining, and premium brands in supermarkets,” according to the report.

 

Enjoy what you are reading? Subscribe to BEEF Daily for industry hot topics Monday-Thursday.

 

Consider the juice market, where private label and store brands, and fresh/premium segments are both growing. “For example, Naked Juice and Simply Orange are taking share from mid-market brands such as Minute Maid and Tropicana.”

Three forces are driving hybrid consumer trend, according to Rabobank:

  • Socio-demographic developments. The growth of women’s purchasing power and increasing influence over household spending is a major factor; research indicates women are more objective than men when it comes to food-purchasing decisions. Additionally, younger generations, which grow up using social media, are more likely to make food choices based on merits rather than on specific brand loyalties.
     
  • Food retailer strategies. The advent of discounters has added to consumers’ options to trade down, and, in recent years, private-label products have increased trading-up options. Increased use of the Internet as a tool to compare products and prices has also led to greater consumer awareness regarding food product purchasing.
     
  • Macro-economic developments. The recent global recession has accelerated the existing market dualization. Constraints on disposable income and falling consumer confidence has encouraged trading down on basic items. At the same time, consumers still want to occasionally indulge themselves even in times of economic hardship, and are willing to pay a bit extra for premium quality.

Looking forward 10 years, as Generation Y moves up the career ladder, and Generation Z enters the labor market, Rabobank expects Millennials to have a serious impact on consumer spending. As their purchasing power increases, so will overall hybrid consumption patterns, the report concludes.

 

You might also like:

There Are More Consumers Today, And They’re More Diverse

What You Need To Know About The Checkoff's New Consumer Advertising Campaign

What The Industry Learned From Being “Pink Slimed”

15 Best Photos Featuring Ranch Sweethearts

10 Favorite Ranch Life Memories