Know Thy Customer!

One of the core responsibilities of the United States Potato Board (USPB) is to help the industry understand and properly target consumers with products and promotions. To do this, we continually monitor sales and conduct consumer research. This past fall we completed one of the most ambitious consumer research projects ever undertaken at the USPB—a robust, quantitative segmentation of U.S. consumers. The overall objective of this market segmentation was to provide a more comprehensive understanding of the opportunities and challenges to increasing sales of U.S. potatoes and potato products.

This study was conducted, quantitatively, in September 2014 through an online survey of a large, representative sample of the U.S. population. In order to ensure results would be actionable, the only qualifiers were participants  between 18 and 75 years of age and at least partially responsible for their household’s food decisions. The sample included an equal geographic distribution across the United States and was consistent with the most recent U.S. census.

While the study provides much more insight than can be outlined briefly, here are a handful of key findings:

• When consumers were asked about what attributes were important in selecting food, they cited traditional choices like taste, value and health, but also ranked convenience as one of the top motivating factors.
• Another key finding is that consumers’ definition of what constitutes healthy food is shifting as well. Whereas “healthy” has frequently been focused around low-calorie and low-fat, consumers now report fresh and natural are the two single biggest characteristics of food they deem healthy.
• The evolving lifestyle of Americans has resulted in dramatic shifts in the way consumers are devoting time to eating. The time devoted to traditional meals is rapidly decreasing, with only 22 percent of Americans reporting they are eating three traditional meals every day. Snacking as a meal replacement is more prevalent than ever.
• In terms of specific potato insights, respondents reported one in five dinners at home currently include a potato dish, but that number increases to 25 percent when asked the same question about dining out. In fact, potatoes are the single most popular food ordered at restaurants.

Using lifestyle, food, and cooking attitudes and behaviors, the USPB divided the U.S. population into seven distinct consumer segments. These seven segments are defined as follows:

1. Value & Convenience: Generally older males, without kids in the household, this segment is less affluent and  more likely to be retired or unemployed; heavily cite value and convenience-driven; eat out infrequently and are cooking very basic meals using frozen or pre-prepared foods from the deli.
2. Cooking for Health: Predominantly older females, also without kids in the household, they are educated, but more likely to be retired, working part-time, or a stay-at-home parent. This segment is the most health-oriented, shopping at natural food stores and farmer’s markets for fresh ingredients to be used in scratch cooking, which they prepare often.
3. Creative Cooks: This segment skews to the boomer generation, consisting of affluent individuals, likely to be working full-time or retired. While fresh, natural and healthy are also drivers for this segment, these cooks have a passion for adventure and creation.
4. Adventurous Diner: Primarily millennial men with kids, they are very well-educated and have a higher household income. Time constraints and convenience drive them to eat out more than any other segment. They dine at a variety of restaurants, and while often in a hurry, still desire quality, fresh and exciting food. Cooking and grocery shopping are not enjoyable and viewed as chores to be completed as quickly as possible.
5. Live to Eat: Skewing to older millennials, this segment consists of affluent individuals working full-time or still in school. They are both cooking at home and eating out often. Indulging in food is a passion and fun activity shared with others. They do not prioritize health, and food is less about fuel and nutrition than something that tastes great.
6. Short Order Cook: Likely to be Gen X stay-at-home parents or employed full-time. Regardless of employment, this segment is strapped for time and money. These people enjoy cooking and see food as a way to bring their respective families together. Time and budget constraints ensure cooking at home is traditional and convenience-oriented. They are using meal helpers, extra-convenient fresh foods, frozen foods and pre-prepared items to save time in the kitchen.
7. Too Busy to Cook: This segment skews heavily to younger millennials (ages 18 to 24). Possessing lower household income, it is likely they are still in school or recent graduates. They dine out frequently as a lifestyle requirement. They are busy and stressed, driving convenience and familiarity as a common theme for food shopping, dining out and eating at home.

The benefits of having this level of deep-target immersion are incredibly significant, with the goal to help the industry adapt to the changing consumer. Next month, I will discuss in this space which segments are most open to potatoes and how to increase their usage.