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1 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Specialty & Gourmet Cheese, Specialty Olives, Organic Chocolate.

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Presentation on theme: "1 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Specialty & Gourmet Cheese, Specialty Olives, Organic Chocolate."— Presentation transcript:

1 1 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Specialty & Gourmet Cheese, Specialty Olives, Organic Chocolate Prepared By: The Natural Marketing Institute NMI Study # 3509-26 September 2007

2 2 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Table of Contents TopicPage Research Objectives/Methodology3 Executive Summary4 Specialty/Gourmet Cheese15 Specialty Olives40 Organic Chocolate47 Demographic and Shopper Profiles50

3 3 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Research Objectives/Methodology Objectives To assess detailed attitudes and behaviors among Whole Foods Market (WFM) and Wild Oats (WO) Shoppers regarding specialty/gourmet cheese. Secondarily, an overview of specialty olives and organic chocolate is provided. Specifically, the research will address: Frequency of buying specialty/gourmet cheese; reasons for purchasing and for not purchasing Venues specialty cheese is bought, and why Importance of various considerations in buying specialty/gourmet cheese Awareness/impressions of WFM/WO Cheese Monger Interest in various marketing and merchandising efforts for the cheese department Methodology Quantitative research among 1010 pre-identified Whole Foods Market shoppers and 190 Wild Oats Shoppers who have shopped at least 10x/year (total sample of 1,200) Detailed questions about specialty/gourmet cheese purchases at WFM/WO were asked of shoppers who purchase specialty/gourmet cheese at least monthly WFM sample derived from NMIs e-Screener Panel (ESP) Online survey methodology; conducted August 2007

4 Executive Summary

5 5 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Strategic Implications: 10 Ideas to Grow Specialty Product Sales at WFM/WO 1.Highlight the key purchase drivers of specialty/gourmet cheese at WFM: selection, quality, unique choices. Natural/organic qualities are less of a draw. 2.Reinvent the experience of buying specialty/gourmet cheese, which is of key importance and offers a strong opportunity for competitive differentiation. 3.Align merchandising efforts with shopper interests: smaller sample sizes, more local cheeses, smaller cuts, special promoted offerings. This may also draw new S/G cheese buyers to the category. 4.Improve visibility/involvement of Cheese Monger. This is a well-regarded resource which currently is underutilized. S/he also contributes to the experiential component of shopping WFM. 5.Monitor pricing. While not a key consideration, it may have more impact as other stores improve their price/value relationship. Selected lower pricing may also expand the reach/trial of the category. 6.Increase marketing efforts in the department: signage on specific cheeses, more samples, highlight seasonal offerings, tell the story, etc. 7.Promote accompanying products – especially fresh bread, crackers, fruit. Also cross-market specialty/gourmet cheeses with olives. 8.Consider promoting/merchandising gourmet deli options… deli cheese is a frequent purchase and gourmet choices may be attractive to specialty/gourmet oriented shoppers. 9.Increase marketing/merchandising of specialty olives to attract those who only buy regular varieties and entice them to trade-up. Create a need/desire for specialty varieties. 10.Educate consumers on the benefits of organic chocolate – they are unaware of the growing process, unaware of the product, and believe organic status of other ingredients (milk, sugar, vanilla…) is more important than the cocoa.

6 6 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Executive Summary: 1 of 6 WFM Shoppers Are Enthusiastic Purchasers of Specialty/Gourmet Cheese The vast majority of WFM Shoppers have bought cheese in the past 3 months (89%). Two-thirds buy either basic block varieties or specialty/gourmet. Fewer buy basic shredded (59%), packaged deli (48%) or sliced deli (42%) varieties. Overall, specialty/gourmet cheese is purchased about 2 times/month. On average, about $8.20 is spent at each purchase and shoppers buy about ½ lb. More is spent on specialty/gourmet cheese than any other type of cheese by about 30-50%. Shoppers define specialty/gourmet cheese as high quality, flavorful, and interesting/different." Great taste is a key component of specialty/gourmet cheese to virtually all WFM Shoppers (99%). Buying specialty/gourmet cheese is also experiential – most (95%) consider trying new varieties an adventure.

7 7 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Executive Summary: 2 of 6 WFM Shoppers Are Loyal to WFM for Specialty/Gourmet Cheese Purchases WFM is the primary destination for buying specialty/gourmet cheese among WFM Shoppers. Nearly all (95%) have bought at WFM in the past 3 months. WFM Shoppers buy at other stores significantly less: Trader Joes (53%), specialty cheese shops (33%), farmers market (33%), Costco (31%) and grocery stores (about 20%) Although lower, opportunities still exist for market share. The primary reasons for buying specialty/gourmet cheese at WFM is the selection (78%), quality (70%) and unique choices (70%). The product attributes for which WFM is considered unique are secondarily important: natural (50%), options such as no preservatives or rennet… (49%) and organic (48%). Reasons for buying at other stores primarily focus on price. Trader Joes is shopped because of lower prices, but also because of quality, selection, flavor, unique choices and convenience. The main reason for buying at regular grocery stores and warehouse clubs is price followed by convenience.

8 8 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Executive Summary: 3 of 6 What WFM Shoppers buy… WFM Shoppers primarily buy firm (cheddar…), fresh (ricotta, mozzarella…) and semi-firm (gouda/feta…) cheeses (about two-thirds buy each). Grating cheeses (59%), soft (58%) and blue varieties (50%) are slightly less popular. Specialty/gourmet cheese is bought most frequently as a snack, for a treat, or to simply try something different. Each of these occasions implies WFM messaging opportunities. Most WFM Shoppers purchase an accompanying product to go with their cheese –fresh bread (81%), crackers (81%) or fruit (80%) is purchased either regularly or sometimes. Although purchased less frequently, a notable proportion (about half) of WFM Shoppers at least sometimes buy olives/peppers, nuts, cured meats or wine (where available) to go with their specialty cheese selections. Price is not a strong consideration… WFMs prices for specialty/gourmet cheese are considered higher than other stores, but this does not appear to have a significant negative effect. A solid majority (85%) say the prices are higher, but worth it, and most (71%) say they would buy cheese they wanted regardless of the price. On average, most WFM Shoppers expect to pay an average of $9.00/lb for specialty/gourmet cheese at WFM. While most shoppers appear to be somewhat price insensitive, pricing decisions should be approached with caution. Conversely, 56% have at some point decided against purchasing cheese because of the price and 52% believe that WFMs cheese is overpriced.

9 9 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Executive Summary: 4 of 6 The Cheese Monger: An under-utilized (secret) asset The majority are not aware that WFM has a Cheese Monger (89%). Among those who are aware, most have seen him/her and have found him/her available to assist them. Only one-third are able to readily distinguish the Cheese Monger from other team members. This does not appear to be a problem, however, as only a minority (28%) feel it is important to speak specifically with the Cheese Monger when they have a question. The Cheese Monger is extremely well regarded: virtually all find him/her very knowledgeable (97%) and trustworthy (99%). Most feel the Cheese Mongers role should be one of teacher/liaison with customers, and not a clerk. The Cheese Mongers responsibilities should include offering suggestions and recommendations, offering tastes of products, and mingling with the customers. Shoppers are less likely to think that finding products, cutting/weighing cheese, ordering merchandise and stocking shelves should be the Cheese Mongers job.

10 10 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Executive Summary: 5 of 6 Customers Are Receptive to Marketing/Educational Efforts & Eager for New Merchandising The following are the marketing and merchandising ideas which garner the most interest among WFM Shoppers … Marketing (very/somewhat interested) Informational signs displayed with products (97%) Samples (96%) Background info on cheeses (where made, manufacturer info…) (84%) Recipe/serving suggestions (82%) Staff interaction with customers (81%) Merchandising (very/somewhat interested) Smaller sample sizes to buy (95%) Highlighted seasonal offerings (89%) Smaller cuts of cheese (88%) More local cheeses (85%) Cheese Monger Recommendations to highlight new varieties (85%)

11 11 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Executive Summary: 6 of 6 Olives… About half of WFM Shoppers have bought specialty olives in any location (55%), and almost four in ten (38%) have purchased them at WFM. The other main places specialty olives are purchased are regular grocery stores (28%) and Trader Joes (15%). Specialty olives are an infrequent purchase – most (65%) buy them just a few times/year. The olive bar is clearly the preferred source for specialty olives (82%). The main reasons specialty olives are purchased at WFM: selection, flavor, quality. The primary reason for not purchasing: dislike of olives (41%). Secondarily, WFM Shoppers indicate that they dont buy specialty olives because they just buy regular varieties (18%). There is a correlation between buying specialty/gourmet cheese and specialty olives. Frequent WFM specialty cheese purchasers buy more olives. Also, among those who buy specialty/ gourmet cheese at WFM, 62% purchase olives/peppers as an accompaniment. Chocolate… Most WFM Shoppers (76%) claim to have bought organic chocolate in the past, although most report buying very infrequently (52% buy just a few times/year). The main reasons for not buying organic chocolate: never thought about it (46%), unaware (27%), dont think its necessary (25%). Overall, taste is considered a more important purchase driver over organic certification by more than a 2:1 margin.

12 12 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Wild Oats Shoppers Slightly Different than WFM Shoppers in Regard to S/G Cheese WO Shoppers…. Buy specialty/gourmet cheese less frequently than WFM Shoppers Are less loyal to WO than WFM Shoppers are to WFM Are more price sensitive …they cite price as a reason for not buying specialty/gourmet cheese at WO significantly more than WFM Shoppers and are more likely to cite cost as a deterrent for not buying specialty/gourmet cheese Appear to perceive specialty/gourmet cheese as more novel …they are more likely to buy it because of wanting to try something new, upon impulse and for special occasions. There are some key differences between WFM and WO Shoppers regarding specialty/gourmet cheese buying habits … Despite these differences, WO Shoppers hold similar attitudes as WFM Shoppers regarding their descriptions of specialty/gourmet cheese, types of cheeses bought and accompanying products, the key purchase drivers, and interest in promotional and marketing efforts.

13 13 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 EMBRACERS Typical WFM Shopper. Holds core values on health, importance of natural/organic, LOHAS issues and finds specialty/gourmet products and food experiences important. WFM Shopper Segmentation …. CONSCIONABLES Embodies the core values and behaviors of the original WFM Shopper. Strong focus on organics and LOHAS issues. WFMs social/environmental consciousness are a driving force. EXPEDIENTS Convenience is key. Not drawn to WFM because of its organic orientation, values, or specific product offerings, but simply because of its proximity. EPICURIANS Driven to WFM primarily because of specialty/gourmet offerings. Not particularly organic or LOHAS-minded. EXPERIENTIALS All about the experience. Strives for unique and fun food experiences. Primarily buy produce and specialty/gourmet items; not particularly organic oriented. CORGANICS Strong organic orientation; shop WFM because they execute the organic mindset. Believers in the importance of healthy foods, and concerned about what is in food they eat and how its made. Segments based on WFM Segmentation Study –12/06

14 14 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 …Few Behavioral Differences; Many Attitudinal Distinctions EPICURIANS EMBRACERS EXPERIENTIALS Buy more specialty/gourmet overall, but no difference in purchase rates at WFM than other segments More likely to buy at other stores, including TJ, Costco, regular grocery Experientials most likely to find cheese buying an adventure CORGANICS CONSCIONABLES Are more likely to shop for cheese at WFM because of natural/organic choices and options such as no preservatives, rennet… More interested in local cheeses and more healthy options EXPEDIENTS True to their segment definition, they are most likely to buy at WFM because its convenient There are surprisingly few differences between the segments in buying behaviors regarding specialty/gourmet cheese. Most differences focus on attitudes in the core belief system that defines the segment. As with other products, target marketing based on these differences is key.

15 Specialty/Gourmet Cheese Purchase Behavior and Attitudes

16 16 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Basic Block and Specialty/Gourmet Most Popular Cheese Choices (Q.4 - % shopper group indicating types of cheese they have purchased (at any store) in past 3 months or so) * Significant difference at 95% confidence level Bought ANY: WFM: 89% WO: 84% Bought ALL Types: WFM: 16% WO: 18% WFM Shoppers buy more S/G than WO Shoppers… the only significant difference in cheese shopping

17 17 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Specialty/Gourmet Means: Quality, Flavor, Interesting (Q.12 - % WFM Shoppers indicating what specialty/gourmet cheese means to them) Only difference between WFM and WO Shoppers: WFM more likely to cite fresh (43% vs. 35%) Positively, only a minority define specialty/ gourmet as expensive or only for special occasions

18 18 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Specialty/Gourmet Cheese: A Taste Driven Adventure (Q.15 - % WFM Shoppers indicating they agree completely/somewhat with statements) Specialty/gourmet cheese is all about the great taste: 99% (71% agree completely) Specialty/gourmet cheese is an experience, and trying new varieties is an adventure: 95% (54% agree completely) No differences among WO Shoppers

19 19 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Average # Times Bought/Month Average Weight (lbs) Bought at Each Purchase Average Total $ Spent at Each Purchase Type of Cheese… WFM Shoppers WO Shoppers WFM Shoppers WO Shoppers WFM Shoppers WO Shoppers Fresh Cut Deli Cheese2.32.4.62.70$5.08$5.93 Specialty/Gourmet1.92.3.54.59$8.22$7.70 Basic Pre-Pkgd. Block1.92.0.77.80$5.21$5.04 Basic Pre-Pkgd. Shredded 1.92.3.71.83$4.13$4.09 Pre-Pkgd. Deli1.82.4*.58.66$4.28$4.51 WFM/WO Shoppers Buy Deli Cheese Most Often, Spend Most on S/G (at any store) (Q5 - % segment average number times/month buying (Cheese) at any store/Q6 - % segment indicating average weight of (Cheese) bought at each purchase; Q7 - % segment indicating average total cost of (Cheese) for each purchase) Deli bought most often Block bought in greatest quantity Spend most on S/G Opportunity for gourmet deli options? * Significant difference at 95% confidence level NOTE: These figures may not align directly with actual sales as consumers tend to over-estimate their purchases by weight and/or $.

20 20 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 WFM Shoppers Are Loyal Cheese Shoppers; WO Shoppers Less So (Q.8- % segment indicating they have purchased specialty/gourmet cheese at the following stores in the past 3 months) * Significant difference at 95% confidence level WFM ShoppersWO Shoppers With the WO merger, opportunities exist….

21 21 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Frequency of buying specialty/gourmet cheese… WFM ShoppersWO Shoppers Bought S/G cheese in past 3 months95%91% More than once/week2%8% Once/week9%5% 2-3X/month25% Once/month29%19% 3-4X/year22%18% 1-2X/year10%16% Average # times/month at WFM/WO1.61.9 Average # times/month any store1.92.3 Most WFM and WO Shoppers Buy S/G Cheese Monthly (Q8 - % segment indicating frequency of buying specialty/gourmet cheese at (STORE), among those who have bought specialty/gourmet cheese in past 3 months) 54%44%

22 22 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 WO Shoppers Are Less Loyal; Shop Multiple Other Stores More Frequently for S/G Cheese (Q8 – average number times/month segment purchases specialty/gourmet cheese at (STORE)) Avg. # times shopped/month * Significant difference at 95% confidence level

23 23 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Key Drivers of Purchasing S/G Cheese at WFM: Selection and Quality WFM Shoppers are more likely drawn to WFM for selection and flavor Price is a significantly greater driver for WO Shoppers (Q.13 - % WFM/WO Shoppers indicating why they buy specialty/gourmet cheese at WFM/WO) * Significant difference at 95% confidence level Note: small base size for WO

24 24 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 WFMs Unique Options Are Secondary Purchase Drivers (Q.16 - % WFM Shoppers/segments stating that the following are very important in decision to buy S/G cheese at WFM) Primary drivers No differences among WO Shoppers Secondary drivers Corganics Corganics/ Conscionables Experientials Segment names in bars represents WFM Segment for whom driver is most important

25 25 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Primary reasons for buying S/G cheese at other stores… (no differences between WFM & WO Shoppers) (Q.13 - % WFM/WO Shoppers indicating why they buy specialty/gourmet cheese at (Stores)) Price Quality Unique choices Selection Flavor Convenience Freshness Unique choices Wide selection Quality Assistance Flavor Key Reasons for Buying Cheese Elsewhere: Primarily Cost TJs primary draw is price, but also offers other benefits. Its secondary benefits encroach on WFM primary drivers Specialty Cheese Shop Price Convenience Costco/Mass Price Convenience Regular Grocery

26 26 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Most WFM Shoppers Havent Recently Bought S/G Cheese (at any store) Because of Lack of Need… (Q.9 - % WFM Shoppers indicating why they haven t bought specialty/gourmet cheese at any store in past 3 months) Only a few are overwhelmed: Dont know what to buy: 9% Selection is overwhelming: 5% Its too complicated: 5% Dont know how to serve: 5% WO Shoppers more likely to cite price as a deterrent (30% vs. 51%*) * Significant difference at 95% confidence level Can WFM create the need through messaging?

27 27 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 …But Cost is Primary Deterrent for Not Buying At WFM (Q.10 - % WFM Shoppers indicating why they don t buy specialty/gourmet cheese at WFM (among those not purchasing at all in past 3 months or those purchasing less frequently than once a month)) NET: 56% Regular grocery stores, Trader Joes, & Costco win on price Suggest other usage occasions, pairings, etc.

28 28 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 WFM Shoppers Primarily Buying Firm, Fresh and Semi-Firm Varieties; Little Differences Exist Any StoreWFM (Q. 14 - % WFM Shoppers indicating types S/G of cheese bought at any store/Q.17 - %WFM Shoppers indicating types of S/G cheese bought at WFM) Firm Cheese (Cheddar, Swiss…) Fresh Cheese (Mozzarella, Ricotta…) Semi-Firm Cheese (Gouda, Feta…) Grating Cheese (Romano, Parmesan…) Soft Cheese (Brie, Camembert…) Blue-Veined Cheese (Blue, Stilton, Saga…) No differences among WO Shoppers

29 29 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 WO Shoppers Buy S/G Cheese More Often for Special Reasons (Q18 - mean response among WFM/WO Shoppers for average number times per month they buy S/G cheese for the following reasons) WO Shoppers buying more frequently for special or impulse reasons… is specialty/gourmet cheese less novel to WFM Shoppers? * Significant difference at 95% confidence level Avg. # times bought /month Note: small base size for WO

30 30 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Bread, Crackers, Fruit Most Frequently Bought To Accompany S/G Cheese (Q19- % WFM Shoppers indicating they regularly/sometimes buy the following products at WFM when to go with S/G cheese) 81% 80% 62% 52% 48% 41% 37% No differences among WO Shoppers These pairing ideas provide merchandising suggestions. While fresh bread and crackers are often already located close to or in the cheese section, other products may need more explicit suggestions.

31 31 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 WFMs S/G Cheese Prices Are Perceived Higher Vs. Other Stores… 12345678910 (Q22 - % WFM Shoppers indicating how they would rate WFMs S/G cheese prices compared to other stores on a 10 pt scale) Avg: 6.9 WFM prices are LOWER WFM prices are HIGHER WFM prices are ABOUT THE SAME Top 2 Box: 40% Middle Range: 56% No differences among WO Shoppers

32 32 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 …But Most WFM Shoppers State Its Worth The Price (Q.20 - % WFM Shoppers indicating they agree completely/somewhat with statements) No differences among WO Shoppers

33 33 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Most Expect To Pay $9/lb for Specialty Cheese at WFM; Age Drives Price Expectations… (Q.21 - % WFM Shoppers indicating the amount they would expect to pay, per pound, for a piece of S/G cheese at WFM) On average, most WFM Shoppers expect to pay about $9.00/lb for specialty/gourmet cheese at WFM Age makes a difference: 18-29 year olds expect to pay between $5-9.00/lb; those 30+ expect to pay between $10-14.99/lb No differences among WO Shoppers

34 34 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Customers Most Interested in Samples, Informational Signage (Q35 - % WFM Shoppers indicating they are very/somewhat interested in these offerings to learn more about cheeses offered) Strongest interest 97% 95% 84% 82% 81% 73% 71% 55% More interest for women More interest among 30-39 More interest among Under 50 No differences among WO Shoppers

35 35 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Most Not Aware of the Cheese Monger, Though Find the Position Valuable (Q.23-27 - % WFM Shoppers indicating if they are aware of Cheese Monger, whether they have seen CM, whether CM is distinguishable, available to assist, and importance of dealing directly with CM) The majority have NOT even heard of the Cheese Monger at WFM Among those who have heard of Cheese Monger: 65% have seen him/her 34% find him/her distinguishable from others in department 98% say he/she is usually available to assist 71% say its very/somewhat important that they speak directly to CM vs. other team member (28% very important) No differences among WO Shoppers NOT Heard Heard Awareness may be impacted by the term Cheese Monger

36 36 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Preferred Cheese Monger Responsibilities – More Ambassador Than Clerk Offer suggestions/recommendations when asked Offer tastes from cheese case Mingle with customers Help customers find products Cut/weigh cheese for customers Hold classes/cheese tastings Order merchandise Offer suggestions/recommendations when not asked (Q. 28/29 - % WFM Shoppers indicating what activities they think are currently/should be part of the Cheese Mongers responsibilities) Most concur Cheese Monger is not/should not be responsible for stocking shelves Could do more… No differences among WO Shoppers

37 37 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Most Approach Cheese Monger for Tastes (Q.30/31 - % WFM Shoppers indicating if they have ever spoken to the Cheese Monger, and what was discussed) The majority of WFM Shoppers aware of the Cheese Monger have spoken to him/her (84%) No differences among WO Shoppers

38 38 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Cheese Monger is Considered Very Knowledgeable and Trustworthy (Q.33/34 - % WFM Shoppers indicating how knowledgeable and trustworthy they consider the Cheese Monger) Very Knowledgeable Somewhat Knowledgeable Trust A Lot Trust A Little 96% 99% No differences among WO Shoppers Staffing decisions for this position are critical, given the knowledge and trust consumers place in the CM

39 39 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Customers Want Opportunity to Buy Smaller Sampling Sizes (Q36 - % WFM Shoppers indicating they are very/somewhat interested in these types of cheese products at WFM/WO) 95% 89% 88% 85% 75% 72% 51% Strongest interest Women more interested than men in…smaller cuts, smaller sample sizes 30-39 year olds more interested than older shoppers in…Cheese Monger Recommendations," themed and seasonal offerings WO Shoppers more interested than WFM Shoppers in… local cheeses, themed offerings, highlighted seasonal offerings

40 Specialty Olives

41 41 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 WFM Shoppers Buy More Specialty Olives Than WO Shoppers (Q.37 - % WFM/WO Shoppers indicating where they have purchased specialty olives in past 6 months or so) * Significant difference at 95% confidence level WFM Shoppers WO Shoppers Buy specialty olives55%*46% Natural Food Store (Net)43%*32% Whole Foods Market38%*14% Wild Oats2%22%* Trader Joes15%12% Traditional Grocery Store (Net)28%21% Warehouse Store/Club (Net)8%11% Other (specialty cheese shop/farmers market/mass merch) 8%10% Dont buy specialty olives45%54%*

42 42 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Frequent Purchase of Specialty/Gourmet Cheese Correlates with Purchase of Specialty Olives (Q.37 - % WFM Shopper groups indicating they have bought specialty olives in past 6 months)

43 43 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 WFM Shoppers Dont Buy Specialty Olives Primarily Because They Dont Like Olives (Q.38 - % WFM Shoppers indicating why they haven t bought specialty/gourmet olives from WFM in past 6 months) WO Shoppers are less averse to olives, they just buy more regular varieties (26%) There may be less of an opportunity to expand olive purchases as many shoppers simply do not like olives. Encouraging the 18% who only buy regular olives to upgrade should be the primary focus.

44 44 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Olive Buying is an Infrequent Occurrence (Q.39 - % WFM Shoppers indicating how often they buy S/G olives at WFM) Most WFM Shoppers who buy specialty/gourmet olives purchase only a few times each year No differences among WO Shoppers

45 45 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Olive BarJarPre-PackagedCan WFM Shopper 82%29%18%6% WO Shopper+ 72%51%*37%*22%* Most Prefer Specialty Olives From Olive Bar (Q40 % segment indicating type of specialty olives generally purchased at WFM/WO) WFM Shoppers primarily make Olive Bar purchases; WO Shoppers buy from other places as well + Caution – small base size (<50) * Significant difference at 95% confidence level

46 46 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Most Buy Specialty Olives at WFM Because of Selection, Flavor, Quality (Q.41 - % WFM Shoppers indicating the reasons they buy specialty olives at WFM) WFM and WO Shoppers hold similar opinions except more WFM perceive freshness (55% vs. 33%) Focusing on these qualities may facilitate the upgrade from regular to specialty upgrades

47 Organic Chocolate

48 48 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Frequency of buying specialty/gourmet cheese… WFM Shoppers Have bought organic chocolate 78% Once a week or more5% 1-3 x/month21% 1-4 x/year34% Only tried once or twice18% Never purchased organic chocolate 22% Majority Claim to Have Purchased Organic Chocolate, Though Most Do So Very Infrequently (Q.43 - % WFM Shoppers indicating familiarity with process of growing cacao/Q.44 – frequency of buying organic chocolate/Q.45 – reasons for not buying organic chocolate) Majority are unfamiliar with growing process of cocoa… Very – 7% Somewhat – 32% Not too – 35% Not at all – 26% Familiarize and show benefits of organic 52% Reasons for NOT buying: Never thought about it – 46% Wasnt aware of it – 27% Dont believe its necessary – 25% No differences among WO Shoppers

49 49 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Its All About the Taste (Q.46 - % WFM Shoppers indicating the following are very important when considering purchase of chocolate) Taste% Cocoa Other organic ingredients (milk, sugar, vanilla…) Organically grown cacao Price Fair Trade Certification Environmentally friendly packaging Taste is more than twice as important as organic No differences among WO Shoppers Organic status of other ingredients is more important than cocoa…opportunity to educate consumer?

50 Demographic and Shopper Profiles

51 51 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Produce, Meat/Poultry Most Important to Have USDA Organic Seal; Cheese and Chocolate Lower (Q.42 - % WFM Shoppers indicating it is very/somewhat important that the following products are certified with the USDA organic seal) All are less important to those 65+ Cotton is more important to women No differences among WO Shoppers 84% 78% 72% 52% 51% 42%

52 52 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Frequency of Shopping at WFM/WO (Q.2 - % segment indicating frequency of shopping at WFM/WO (sample defined as 10+x/year) Positive relationship between more frequent shopping and more frequent cheese buying at WFM: Buy S/G Cheese > Monthly: Shop WFM 2.8x/month* Buy S/G Cheese< Monthly: Shop WFM 2.1x/month WFM ShoppersWO Shoppers Avg times/mo: 2.5 Avg times/mo: 2.0

53 53 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Avg. score for importance of shopping WFM/WO… (out of 20) WFM Shoppers WO Shoppers Natural/organic foods7.38.2* Specialty/gourmet foods5.75.1 Convenient location4.24.6 Environmental/social consciousness 4.14.0 Unique experience3.63.9 Good value3.04.3* Natural/Organic Foods Clear Driver for Shopping at WFM and WO (Q3 - segment indicating average number points (out of 20) given to each statement as an important reason for shopping WFM)

54 54 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 Demographic/Shopper Profile of WFM and WO S/G Cheese Shoppers (Q.D1-D10) Demographic Profile: Male: 46% Female: 54% Average Age: 44.8 HH income: $94.1K Married: 53% Single: 23% Children in HH: 28% College grad+: 48% Employed/Retired: 73%/11% White: 82% Black: 3% Hispanic: 9% Asian: 4% Shopper Profile: Avg # times shop/mo:2.8 Avg. monthly grocery bill (all):$489.40 Avg. monthly grocery bill (WFM):$173.30* % WFM $/total grocery bill:35% Demographic Profile: Male: 44% Female: 56% Average Age: 41.0 HH income: $86.4K Married: 47% Single: 28% Children in HH:43%* College grad+: 53% Employed/Retired: 74%/10% White: 77% Black: 2% Hispanic: 10% Asian: 5% Shopper Profile: Avg # times shop/mo:2.1 Avg. monthly grocery bill (all):$478.00 Avg. monthly grocery bill (WFM):$152.40 % WFM $/total grocery bill:32% WFM S/G Cheese Shoppers WO S/G Cheese Shoppers

55 55 The Natural Marketing Institute (NMI) Cheese/Olives/Chocolate Study #3509-26; September 2007 The Natural Marketing Institute 272 Ruth Road Harleysville, PA 19438 Steve French, Managing Partner phone: 215-513-7300, ext 214 fax: 215-513-1713 Steve@NMIsolutions.com www.NMIsolutions.com


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