Survey finds consumers are cautious, which could put pressure on supplement margins

Chicago-based market research firm IRI has released results from the most recent iteration of its quarterly survey​, now called Consumer Connect.  Susan Viamari, IRI’s vice president of thought leadership, spoke with NutraIngredients-USA about the implications of the results for the sales of dietary supplements and functional foods.

Personal wealth under threat​

Viamari said that the overall mood of consumers was a bit gloomy, which is influenced in part by the extraordinarily vitriolic rhetoric that surrounds the presidential campaign. The survey found nearly two-thirds of U.S. consumers believe their financial health is poised to deteriorate in 2017 regardless of who wins the presidential election. While the campaign has done nothing to lift people’s spirits, it seems in terms of economic decision-making, they are about as beaten down as they are going to get. Despite relentless campaigning, the survey found this two thirds figure remains consistent with what was noted in the second quarter. This financial uncertainty is setting the stage for an upcoming holiday shopping season in which 55% of all consumers surveyed say they will spend the same as last year this holiday season. 

“What we saw through the survey is that people don’t love what they are hearing from either candidate. Regardless of who gets elected they think things are not going to be a lot better going into the New Year,”​ she said.

“We see an attitude of caution. People think that they’re not making the wages they should be and that a lot of people are underemployed,”​ Viamari said.

Health and wellness still a bright spot​

It requires some extrapolation to figure out how those attitudes play out into decisions surrounding supplement purchases.  Viamari said that the trend in health and wellness has been for consumers to say that they want to take more control over their health, which is a good thing for supplements in general. The question remains how much of what they seem to feel is threatened personal wealth they are willing to devote to that goal.

“We have looked at trends in health and wellness and over the counter drug sales. Supplements is an area where consumers can be proactive and can take care of themselves and make decisions to keep their families healthy,”​ Viamari said. “When you are talking about supplements, consumers are really trying to make sure that those products deliver on the benefits they want.” ​

The cautious female consumer​

As some others in the supplement industry have noted​, Viamari said that women are increasingly making these buying decisions for their families. Stereotypical thinking might have one assume that a woman’s decisions are more driven by emotional connections with products whereas a man might take a more analytical approach, but Viamari said her company’s research seems to indicate the opposite is true. If companies want to influence those female-dominated buying decisions, they are going to have to connect with female consumers on the benefits of their products, and not as much on their style, so to speak (which is not to say that packaging and brand positioning are not highly important considerations in their own right). It’s the idea of selling the steak, not the sizzle.

“Women make the majority of the buying decisions for the household and women wield a lot of the wealth in this country. Women are more cautions about the state of household finances than men tend to be. Women are really going to be looking for how that product or that brand fits into the lifestyle they are creating for themselves and their families. But in this cautious environment, they may increasingly be looking for products that are on sale, that have a coupon. Or they may be looking to switch brands with a product category,” ​Viamari said.