EXCLUSIVE RESEARCH VALIDATORS & MARKETING TRIBUNE, written by Esmee van Garderen, Hilde Doting and Sjaak Hoogkamer

Especially for this edition, MarketingTribune and Validators zoomed in on the buying behavior of consumers when it comes to food, and especially the choice between private label and A-brand in times of crisis. For this study, we interviewed a group of 300 Dutch consumers, nationally representative with age 18+. The fieldwork ran from 1 to 8 August 2022.

The Monitor Consumer Behavior, an initiative of VU Amsterdam and Validators, already showed in recent months that the consumer's focus is becoming more on price and that the brand is taking on an increasingly less relevant role. Higher price sensitivity and lower brand relevance, not the best news for marketers. As a marketer, especially now in this time of crisis - war in Ukraine, inflation, higher gas prices - you have to hold on to the fact that brand building is about the long haul.

Extreme inflation causes higher price sensitivity and lower brand relevance 

Indeed, according to the BRiC score - or Brand Relevance in Category - a brand should become more important in times of uncertainty. Although private brands are primarily chosen to save money, consumers are still making a conscious decision on what products to save on.

3 in 5 consumers report that inflation is affecting their purchasing behavior. Among those aged 55+, this is much more alive (70%) than among those aged 35-54 (60%) and 18-34 (52%). Compared to extreme inflation, the war in Ukraine has less influence on purchasing behavior; 3 in 10 indicate that the war has an influence on their purchasing behavior.

Although consumers are willing to pay more for an A-brand because of its quality, 3 out of 5 consumers say they buy private labels because they are cheaper. In this way they try to save money, but they do not do so on all products. Consumers make a conscious choice what they do and do not want to save on. For example, consumers think it is fine to save on household items, such as cleaning products and toilet paper. In addition, the A-brand pasta, rice, sandwich filling or frozen food product is also easily exchanged for the house brand. However, there are exceptions. If we buy coffee, tea or personal care items, we still prefer the A-brand. And so while consumers are looking for savings for themselves, they don't want to do that to their pets. Regardless of war and inflation, our dear four-legged friends may continue to enjoy the familiar and trusted A-brands.

The top five product categories for A-brands:

  1. Coffee and tea
  2. Drugstore
  3. Beer, wine and liquor
  4. Drinking
  5. Candy, snacks and produce in the pantry

The top five product categories for private brands:

  1. Household products
  2. Pasta, rice and international products
  3. Products in the pantry
  4. Breakfast and sweet spreads, drinks and frozen foods
  5. Coffee and tea

When it comes to drinks and products in the pantry, both A-brands and private brands are widely considered.

5 in 10 buy relatively more house brands than A-brands

For many consumers, price is an important motivator to switch to another brand. Only a third of the Dutch are willing to pay more money for A-brands and a quarter prefer A-brands to private labels.

It is mainly young people who are willing to pay more for an A-brand, namely 44% versus 29% of those aged 35+. When it comes to brand loyalty, 40% of the Dutch population indicates that they would be less willing to switch to another brand if this brand were cheaper. 40% is neutral about this and 20% (absolutely) disagrees and would therefore definitely switch if another brand dropped in price.

Only a quarter of the Dutch have a higher trust in A-brands than in private labels. 7 in 10 Dutch people say they will buy a brand again next time if they are satisfied with the brand. Especially the 55+ people seem to be the most loyal to the brand, in this case (81%), compared to 64-68% of the 18-54 year olds. So, as mentioned above, consumers are making a considered choice when it comes to saving on groceries; 5 in 10 buy relatively more house brands than A-brands.

*Esmee van Garderen is Junior Insights Consultant and Hilde Doting is Consultant Marketing & Communications. Both are working at research firm Validators in Amsterdam.