As we enter the new year, there will be things we want to leave in the past and those we want to bring into the future. Unfortunately, last year’s cost of living crisis has entered 2023 with us, and it looks like it’s going to stick around for a while.
Food inflation has a direct impact on food prices, affecting ordinary consumers and businesses alike. According to Statista, the inflation rate for food and soft drinks in the European Union reached a whopping 17.9% in November 2022. Consumers are responding by buying fewer treats and reducing overall budgets and spending. In addition, people are changing what they buy and from where, including switching to supermarkets and reducing meat purchases.
Products of plant origin less sensitive to inflation
Fortunately, plant-based alternatives have not been affected by inflation as severely as conventional meat and dairy products. This is likely due to the much higher margins of alternatives, which may have acted as a buffer to absorb price shocks. Meanwhile, supermarkets had no choice but to raise meat and dairy prices with inflation. As this continues, the appeal of budget-friendly herbal alternatives could potentially seduce a larger consumer base.
So how can we take advantage of the opportunities presented by the cost of living crisis? And what can we do to mitigate any adverse effects?
ProVeg International recently published an article on its New Food Hub that reveals six steps retailers and brands can take to not only overcome the cost of living crisis and retain sales, but also take advantage of the opportunities it presents.
1. Introduce your own brand or affordable line of herbal products
One of ProVega’s recommendations is the introduction of an inexpensive and/or own brand herbal assortment.
Research shows that during the cost of living crisis, the number of consumers who buy from a range of valuable and own brands has increased. Indeed, a recent survey found that more than a third of Brits are swapping their preferred branded products for cheaper options, such as supermarket own-brand products.
2. Launch affordable offers
Producing a new budget-friendly line of plant-based products or private label products to help consumers who love your products but can’t afford them can go a long way. Whether you’re a plant business or a retailer, offering a new line to the money-spending customer can potentially increase sales and loyalty.
A spokesman for Albert Heijn commented in an interview with ProVeg: “Affordable shopping for everyone is our priority. That’s why we have, among other things, Price Favorites: products of our own brand of top quality that are always at low prices. With more than 1,600 Favorite prices, customers can buy all daily groceries, from breakfast to dinner […] cheap.”
3. Highlight cheap products
If you already have your own brand and/or valuable plant-based ranges, be sure to highlight them to your consumers. Highlight them on your website and place them at the entrance to the store and at the beginning of the shopping aisle. Consumers are not the only ones who benefit from such an offer. Private label product lines allow retailers greater control over costs and the opportunity to gain customer loyalty.
“Half of our turnover comes from own brand products, so we know all the prices. In this way, we can see if the prices the suppliers are asking for are realistic,” said Albert Heijn’s spokesman.
To take away
- Promote your own brand and valuable herbal ranges – place them in visible areas of your store and highlight them on websites.
- If you don’t have your own brand or a valuable herbal offering, contact ProVeg at [email protected] talk about creating one.
To learn more about capitalizing on the cost of living crisis, read ProVeg’s full article here.