Brand loyalty wavers in US

12 September 2011

NEW YORK: Brand loyalty has declined in 55 major categories across the US consumer packaged goods industry during the last three years, but increased in 45, SymphonyIRI, the research firm, has found.

The company assessed the top 100 CPG categories in the US. More than half saw declines in loyalty between 2008 and 2011. These included refrigerated salad and coleslaw, cold, allergy and sinus tablets, ready-to-drink tea and coffee, butter and creams.

Of the 45 categories that saw loyalty rise, sports drinks logged the greatest increase. Loyalty was defined as one brand taking over 50% of a buyer's category purchases.

In sports drinks, the percentage of buyers to whom this applied rose by 6.5 points to 87.6%. Nappies, meanwhile, saw a 4.4-point increase to 58.3%.

Price concerns are often key, as shown by sugar, where the cost per unit climbed 22% since 2008 and the number of loyal customers fell 6.5 points to 32.6%. In the same period, coffee prices leapt 21% and loyalty levels slid 1.5 points to 67.1%.

"While most retailers and manufacturers will instinctively pull the lever to compete on price, it's important to understand that consistently leading with price has significant negative impacts on brand equity," John McIndoe, SVP, marketing, at SymphonyIRI, said.

Overall, 24% of adults surveyed by the company always buy the same brand in "a few" CPG sectors, versus 23% in 2009.

Moreover, 20% agreed with this statement when considering "most grocery products", up from 15%, but still not sufficient to stop a majority of CPG categories experiencing a decline in loyalty.

Another 23% of consumers generally opt for the items providing the best value for money, down from 31% in 2009, and 12% now pick the lowest-priced option, a dip of one point on 2009.

However, 79% of respondents did think about price when shopping, 76% reflect on past usage and how much they trusted the offering in question, and 32% are trying alternative brands available on deal.

Turning to private label, 59% of the panel only purchase such lines from certain trusted stores, the same score as for those "often" acquiring these products rather than national brands.

A further 58% of the sample preferred stores with a wide variety of own-label goods, and 43% chose which retailer to visit based on their selection, whereas a modest 17% never bought store brands.

More broadly, SymphonyIRI reported the amount of unique products contained by the average American pantry decreased from 519 in 2008 to 493 in 2010.

This comes despite rising competition, as shown by the fact 303 new beer and cider brands were launched in this period, as well as 279 new wine brands, 89 salty snacks, 67 bottle juices and 62 dog foods.

Data sourced from SymphonyIRI; additional content by Warc staff