Getting to know lower-income consumers
Understanding the needs of these value-seeking Canadians has never been more critical
With a variety of socioeconomic factors
placing pressures on Canadian wallets, it’s critical to the future success of retailers, manufacturers and foodservice operators to understand the evolving needs of value-seeking consumers.
Higher interest rates, skyrocketing real estate prices and a record-high debt burden are taking a toll on Canadian spending patterns. However, despite the now larger proportion of Canadian consumers living in lower-income households (up 1% versus 2015), the trend towards local, organic and less processed points to a shift in their importance in the re-defining of Canadian food values.
Ipsos’ tracking studies FIVE and Food- service Monitor (FSM) provide a unique view of how lower-income Canadians* are navigating choices in the ever-changing food and beverage marketplace.
Maturing millennials, many of whom have young kids, represent the largest share of lower-income households and represent considerable opportunity for marketers to appeal to “family” needs. Visible minority Canadians, many of whom are in the process of establishing roots in the community, are also more likely to be in lower-income households. A common misconception is that those in lower-income households are less likely to prioritize health, nutrition and quality in their food and beverage choices. In reality, these consumers are as likely to opt for food and beverage options that meet requirements of being healthy and nutritious, fresh, less-processed and locally-sourced as their more affluent neighbours.
Not surprisingly, these thrift-conscious consumers do opt for products that provide cost savings and value, but they are also seeking options that satisfy multiple purposes, align with weight loss goals or alleviate boredom. Lower-income consumers are also less likely to consume organic and premium options with higher price tags. And they are more concerned about calories and protein attributes than they are about sugar and salt/sodium content.
When evaluating the top food choices in Ipsos’ data, lower-income household consumers report eating less than their fair share of fresh fruits and vegetables but more than their fair share of frozen and packaged/canned options, perhaps motivated by heightened concerns over cost and perishability.
Lower-income consumers eat similar rates of meat protein compared to the total market, led by chicken, and also similar rates of protein alternatives, led by eggs, confirming this group’s focus on protein. They’re also more likely to treat themselves with snack-oriented choices like chocolate, potato chips and candy.
Compared to the total population, lower-income consumers—particularly those in non-senior households—drink more carbonated soft drinks, fruit juices and iced tea, and consume less beer and wine. This shift in alcohol consumption, together with this group’s rising use of cannabis for recreational purposes, could pose future challenges for the alcohol beverage industry.
Looking at food preparation habits, those in lower-income households are less likely to prepare fully-homemade dishes, even at the all-important dinner occasion, opting instead for partially homemade solutions and ready-made heat-and-eat options. Providing a wider assortment of value-priced nearly-ready to eat dishes specifically targeted to dinner is a significant opportunity.
Today, one in five meal occasions among lower-income household consumers are sourced from foodservice establishments and, similar to the eating habits of all Canadians, the movement away from home is a growing trend within this group (+2% versus 2016).
Finally, when evaluating where and how lower-income consumers shop for food and beverages, we see they are more likely than other consumers to shop at mass merchandisers, dollar stores and ethnic grocery stores. With a propensity to buy more unplanned items, especially during spur of the moment trips, these consumers are more likely to engage in multiple re-stock or emergency trips throughout the week rather than a weekly major grocery shop.
As the Canadian economy continues its rocky path, understanding and meeting the needs of value-seeking consumers in lower-income households has never been more critical. The business of thrift, frugality and economizing is alive and well and is increasingly important to lower-income consumers. They should not be overlooked or discounted.