“Made in” matters… or does it?
Consumer preferences are tipping toward global brands over local ones in most categories
Thanks to globalization and connectivity, consumers today have access to a wider array of products than ever before. Most Canadians are exposed to both multinational and local brands from birth, and expectations around choice and quality are well ingrained. But when it comes to country of origin, just how much does the “Made In” moniker influence purchasing behaviour?
New Nielsen research indicates that across the majority of categories, there is a growing shift towards a preference for global brands. In fact, the only categories where there was a strong preference toward local brands were dairy and fresh foods. This shift in sentiment could be the result of several factors: consumers using the category less, reduced availability of local brands or the perception that a local brand is actually global, and vice versa. Or it could simply be the case that consumers have a growing affinity for products that are manufactured by global or multinational brands.
Understanding consumers’ attitudes and preferences for brand origin can be helpful in shaping companies’ go-to market strategies. When it comes to food—traditionally the mainstay of local brands—overall consumer preference is also beginning to shift toward globally manufactured products, but with a few notable exceptions:
Fresh food: Typically, consumers prefer to buy fresh items from their local store or market. The bulk of Canadians (60%) say they prefer to shop locally for produce such as fresh fruit and vegetables. However, preference for local outlets becomes less pronounced when it comes to fresh meat, seafood and eggs (50%); bakery products (49%); rice, grains and pulses (22%); chilled or frozen fruits and vegetables (24%); and chilled or frozen meat and seafood (24%). Overall, fresh food brand preferences tend to be more affected by perishability and quality as selection criteria, which increases the likelihood of preference for brands/products made or harvested close to the source of purchase. However, the shift away from local brands indicates this driver may carry less influence in the future.
Chilled/frozen foods: While in the past, consumers’ preferences in chilled and frozen foods have been balanced across global and local brands, a slight shift toward global brands is now evident. Although, strictly speaking, there is no “perishable” barrier impeding the growth of global brands in these categories, local tastes still play a part in consumers’ preference for local or global brands.
When it comes to dairy products such as milk, butter, cheese and yogurt, Canadian consumers prefer local brands (55%); however, the desire for local is decreasing in categories such as ice cream (32%), frozen meat and seafood (28%) and frozen meals (20%) compared to 2016 figures. Globally, consumers across the board indicated that longevity and quality in the chilled/frozen food categories are key factors in their selection criteria.
Packaged foods: Within the packaged foods and snacks categories, there has also been a shift in preference toward global brands, but results vary within regions. Among Canadians who purchase the category, preference has moved slightly away from local brands across all categories. Less than one quarter (22%) prefer local biscuits, chips, snacks and cookie brands. Preference for local brands in other packaged good categories were also low: chocolates and confectionery (23%); sauces and condiments (19%); breakfast cereals (22%); instant noodles (11%); and canned/tinned food products (16%). The move away from local brands can, to a certain extent, be attributed to expanding online offerings as well as increased consumer exposure to global brands.
In many markets, it’s clear that multinational and global brands are winning the battle for consumers’ hearts and minds. In an increasingly global world, where brands are available online and perceptions around quality, freshness and trust are firmly rooted in globally produced products, local brands will need to increase efforts in manufacturing, distribution and promotion to compete with their global counterparts.
This article appeared in Canadian Grocer‘s February 2018 issue.