Healthy Customers are Healthy Spenders

April 7, 2010

Health-aware consumers tend to shop more frequently and spend slightly more than consumers who are less concerned about health, according to Nielsen analysis of National Marketing Institute (NMI) data.

Five Health-related Consumer Segments
When it comes to health beliefs and practices, the NMI found that people fit into one of five distinct segments that inform their shopping and buying decisions:

  • Well Beings (19%): The most health-proactive group; market leaders and influencers whose actions are driven by values. They eat more organics, consume modest amounts of supplements and pursue many different health modalities.
  • Food Actives (18%): More mainstream in their health pursuits, this group strives for moderation in their lifestyle and prefers food that is inherently healthy, as opposed to organics or supplements. Seeking a life balance includes balancing the budget for this price-sensitive segment.
  • Magic Bullets (24%): Consumers who hope supplements, Rx and pills will help them reach health goals. More into health management than prevention. Least likely to cook at home or exercise.
  • Fence Sitters (17%): Stressed out, but seeking control. They dabble in the latest exercise kick and actively pursue weight loss goals. Receptive to eco-friendly appeals and reliant on social media.
  • Eat, Drink & Be Merries (22%): Younger shoppers who crave taste and pinch pennies. No concerns here about prevention, making them the least health-active group.

Healthier Segments Shop, Spend More
Nielsen analysis indicates that the healthier consumer segments (Well Beings, Food Actives, Magic Bullets) shop more often than less wellness-oriented groups, perform more household shopping trips per year, spend more in total annually and tend to buy more on deal.

In terms of annual shopping trips per household, Well Beings, Food Actives and Magic Bullets all average a little more than 160 per year in ascending order. Eat, Drink & Be Merries average about 155 annual shopping trips and Fence Sitters average about 150.

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In terms of basket ring dollars per trip, Eat, Drink & Be Merries are in a virtual tie for first place with Well Beings and Magic Bullets, with all three segments averaging more than $40 but less than $45 per trip. Interestingly, the less health-conscious Fence Sitters average about $40 per trip, compared to about $39 for the more health-conscious Food Actives.

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Magic Bullets are the clear leaders in basket ring dollars per household, spending an average of close to $8,000 per year. Well Beings follow with an average of slightly more than $7,000 per year, and Food Actives and Eat, Drink & Be Merries are essentially tied right behind Well Beings just above the $7,000 mark. Fence Sitters lag in this category, spending an average of about $6,500 in annual household basket ring dollars.

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One contributor to Food Actives’ relatively low basket ring dollars per trip average is likely the high average percentage of dollars they spend on deal. Food Actives clearly lead this category with an average percentage of about 28%, followed by Well Beings at about 25%. Magic Bullets and Eat, Drink & Be Merries follow in a virtual tie at about 23% each, with Fence Sitters also lagging in this category spending an average of slightly more than 20% of their dollars on deal.

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Healthier Segments Prefer Grocery, Drug Stores
Preferred channels for health-conscious consumer segments include grocery stores, which offer the widest variety of fresh and organic products; drug stores, where they can find medications as well as dietary supplements, and warehouse club stores known for outstanding value but limited offerings on the food and drug fronts.

Health-oriented shoppers are least likely to patronize supercenters, mass merchandisers, convenience/gas stores and dollar stores.

Grocery spending patterns reflect an emphasis on formats that have made a name based on their produce and fresh departments, tasty samples, customer service and client education ranging from proprietary health labeling systems to in-store seminars and demonstrations.

Annual Category Spending Differs Widely by Segment
Annual category spending by different consumer segments varies in mostly, but not exclusively, expected ways. In general, health-conscious segments spend more in categories such as nuts, yogurt and fresh produce, while less health-conscious segments spend more in categories such as carbonated beverages, beer, and frozen pizza and snacks. Healthier segments do spend more in the wine category, but wine is the one alcoholic beverage that does carry some health benefits when consumed in moderation.

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Surprisingly, Well Being households spend an average of $316 per year on tobacco and accessories, trailing only Eat, Drink & Be Merry households with average $339 yearly spending in this category. Even Fence Sitter households significantly trailed Well Beings with an average of $287 in annual tobacco/accessories spending. Nielsen analysts had no definitive explanation for this statistical anomaly but suggested it may be due to less health-oriented spouses or other household family members.

Target Well Beings
Nielsen advises that Well Beings represent a high-value segment with big spending habits, particularly in healthy categories. The right product assortment and messaging can engage these consumers, while coupons will convince them to make a purchase. Given their tendency to plan ahead and shop the internet, providing printable online shopping lists with prominent store branding is an inexpensive marketing tool and added value convenience.

In addition, Nielsen recommends targeting Well Beings with strategic in-store wine pairings, as well as in-store and online wine lessons and demonstrations. Other marketing strategies for Well Beings include special offers on store-branded cookware and utensils, recipe storage containers, proprietary online recipes, an extensive cookbook and cooking magazine section in the store, and/or a fresh food buying rewards program.

US Eating Habits Get Healthier
The US is making progress in following healthy eating habits, according to the recently released Nielsen Healthy Eating Index. The Nielsen Healthy Eating Index scored 402 in 2009, a 33.4% increase from 389 in 2008.

Products with claims about fat content make the largest contribution to the Index (19.5%), even when excluding milk sales and factoring by 50%. Other products near the top of the contribution lost include UPC-coded fresh produce (14.9%), products with “natural” claims (11.3%) and products with “reduced calorie” claims (11.2%).

About the Survey: The NMI conducts an annual health and wellness survey to determine what consumers consider healthy. Shopper insights showed consumer interest in minimally processed foods, a short list of recognizable label ingredients, less of the “bad stuff” like trans fats or MSG, and more of the “good stuff” like fiber, antioxidants, vitamins/minerals, calcium, Omega 3s, whole grains, heart-healthy ingredients and Vitamin D.

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