The rise of the ‘hybrid consumer’ is an emerging trend with significant implications for food companies, food retailers and foodservice companies.
Using money saved by trading down on staples, hybrid consumers are trading up to premium, high-end products that matter most from an emotional and social perspective, such as premium brands in supermarkets and fine dining.
As a result of this trend, the food retail sector will become increasingly polarised into value and premium, with middle ground players struggling to retain market share.
Marc Kennis, senior analyst, Rabobank food & agribusiness research and advisory, said: “The implications of this market trend are profound and touch on areas such as product offerings, distribution channels, marketing and brand management. Given the driving forces of hybrid consumption (i.e. women’s increasing role in household spending and the growing importance of Millennials (generations Y and Z)), we believe that hybrid consumption is a long-lasting phenomenon. Therefore food processors, food retailers and foodservice companies will need to adapt or risk fading away.”
Hybrid consumer patterns are reflected in the growth rates of retailers. Those geared towards the mid-market are showing lower growth rates over a longer period than their peers at the extreme ends of the spectrum.
Between 2007 and 2012, above-average performers in the US were either hard discounters such as Aldi, or premium formats such as Whole Foods and HE Butt Grocery.
Similar trends exist in Western Europe. Growth rates at mid-market operators such as Morrison’s, Tesco, Sainsbury’s and Asda have been clearly lower than at discounters such as Aldi and Lidl, as well as upmarket retailers such as Waitrose.
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