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Survey: Shoppers Continue to Leave National Brands Behind

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Three-quarters of major brand categories decline in loyalty status; store brands' appeal starts to backslide.

America's national food, beverage and household brands struggle to regain favor in the hearts and minds of US consumers for the fifth year in a row, according to a recent survey conducted by professional services firm Deloitte.

Nearly 3 in 4 (73%) CPG categories show an overall decline in their brands' "must-have" status, meaning that shoppers would purchase whether on sale or not. However, the study also showed a drop in store brands' appeal, improved consumer perceptions of the economy, and shoppers' willingness to pay a premium for attributes such as health and convenience – which may signal a turning point that is set to further disrupt the CPG industry after years of consumer caution.

"This is a critical moment for consumer product companies."

"This is a critical moment for consumer product companies," said Barb Renner, vice chairman, Deloitte LLP and U.S. Consumer Products leader. "While the majority of consumers say they are committed to sustained frugality year after year, our findings point to early signs that they may finally be responding to a belated but increasingly strong economic recovery. It creates tremendous opportunities and risks for companies in this sector, given households' lack of commitment to national brands brought on by years of stretching dollars to the limit. Brands that get things right can use the economy's momentum to regain their place on consumers' shelves, but those that move too slowly could very well be left behind."

While previous years of economic stagnation fueled consumers' interest in store brands, this year's study revealed that trend may be reversing as recession-weary consumers loosen their purse strings. The number of consumers who view store brands as a sacrifice (43%) jumped 10 percentage points, while fewer consumers (65%) indicate they are more open to trying store branded products, an eight percentage point decline.

Moreover, roughly one-quarter (25%) of consumers indicate they are willing to pay 10% or more for a product that is new or innovative, and one-third (33%) will do so for a craft version of food or beverages.

Digital paves the "path to purchase"
According to the study, more than half of consumers turn to digital tools to research products, up from 45% last year, and ahead of the number who do so to compare prices (48%), which remained flat compared with last year. Additionally, 4 in 10 use devices to make shopping lists or meal plans. These behaviors signal multiple points to interact with people along the path to purchase outside of traditional discounts, from building today's list to planning next week's dinner.

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