A recent study published in the September 2023 Consumer Food Insights Report has shed light on the enduring debate between brand names and generic products. The report, crafted by experts at Purdue University’s Centre for Food Demand Analysis and Sustainability, delves into the choices made by US consumers, offering valuable insights into their preferences.
Surveying a diverse group of 1200 consumers across the United States, the report reveals that when it comes to beverages, brand names seem to have a strong hold on consumer preferences. Even when faced with substantial discounts on generic or store-brand options, most consumers opted for the familiar taste and quality of brand-name beverages.
In contrast, consumers were less willing to pay a premium for brand-name meat, fruits, and vegetables. Professor Joseph Balagtas, the report’s lead author and the director of CFDAS at Purdue, pointed out that these findings were the result of new questions introduced in the report’s ‘Brand Beliefs’ section, which yielded intriguing results.
The report underscores that consumer choices are influenced by price sensitivity when it comes to snack foods. A majority of respondents felt that brand-name products tasted better, leading them to choose these options even when generics were discounted by 15%. However, when generics were discounted by 30%, a majority of consumers favoured them.
Taste was found to be a significant factor in the decision to choose brand-name foods over cheaper alternatives. Consumers generally believed that brand-name beverages offered a superior taste compared to generics and were more likely to pay a premium for them. In contrast, fewer consumers associate brands with better taste in the meat and produce sections, leading them to opt for more affordable options.
Interestingly, the study also revealed that most consumers did not perceive brand-name foods as being more nutritious, made from better ingredients, or safer than store brands.
Professor Balagtas stated, “Our finding that taste is the main driver of consumers’ valuation of brand names is consistent with results from our food values survey questions, where respondents consistently rank taste as the most important attribute when shopping for food.”
Other notable findings from the report include:
Households with an annual income of less than US$50,000 (AU$79,000) displayed a higher level of price sensitivity when presented with discounts on generic or store-brand products.
The consumer food inflation estimates, at 6.3%, continues to diverge from the government’s consumer price index of food inflation, which stands at 4.3%.
Elijah Bryant, a survey research analyst at the center and co-author of the report, pointed out, “We see that brand choices differ slightly when disaggregated by income. Those making less than $50,000 are more responsive to changes in the price of their food options.”
While lower-income individuals already tend to favour generic brands over brand names, this disparity grows when the discount on generic or store-brand products is doubled from 15% to 30%.
Food expenditures indicate a decrease in average food-away-from-home (FAFH) spending since June, which may be a result of FAFH inflation cooling at a slower rate than food-at-home inflation.
Despite a 1.6% increase in total weekly food spending since the previous September, it falls below the government’s food inflation estimate of 4.3%, hinting those consumers might be either buying slightly less food or choosing more affordable options.
The report also found that food security remained stable at 13%, which is below the 2022 average of 15%. Generally, people seem content with their diets and lives, although higher-income households tend to report greater satisfaction.
The Centre for Food Demand Analysis and Sustainability, as part of Purdue’s Next Moves in agriculture and food systems, utilizes data analysis to enhance the food system and shares its insights through user-friendly platforms.