In uncertain economic times, it's human nature to seek safety in trusted brands. Emily Manson examines what makes leading brands so attractive and how it is possible to communicate value beyond price
It sounds like a cliché but in uncertain times, it's human nature to cling to one's comfort zone. Experimentation is left for the serial entrepreneurs, while the rest of us look to stay with stuff we know and trust.
These are undoubtedly uncertain times, so it's perhaps unsurprising that hospitality operators and consumers are looking to the big brands to provide security in an otherwise insecure world.
But why is this? Branded goods, after all, generally have a higher up front cost than their unbranded or ‘value' rivals - yet they still retain market share and draw customers both from operators and retail consumers - despite the economic climate.
Research from BrandFinance found a new breed of recession-proof and aspirational "Alphabrands" which consumers turn to for quality, regardless of the economic conditions. CEO David Haigh explains: "Bucking the trend for consumers to look to lower end products during times of economic uncertainty, our results show that consumers are increasingly eager to indulge in high quality."
While his study focused on the top 500 global brands, it's not unreasonable to assume that this trait could also be extrapolated out to Alphabrands within the food and beverage sectors. So what is it all about? What do brands give the operator and thus the consumer?
Tracey Rogers, managing director of Unilever Food Solutions, has also found that operators continue to buy branded products even in a recession because they know they can trust them to deliver consistency and quality.
She explains: "Particularly in a recession, operators don't want to take the risk of making a mistake that may be cheaper initially but just not up to scratch because then it's a false economy. They also know in these times that serving products which are not up to par could damage their business in the long run. We work in an industry where quality and taste matter and that's just not negotiable."
Buying a branded product helps take the risk out of purchasing, so operators using brands bring to their business the assurance that those brands stand for. At an operational level this means that machine settings for products such as coffee don't have to be reset as each batch is guaranteed to be the same, thereby making service more efficient.
Susan Nash, trade communications manager for Kraft, adds: "Brands bring assurance to both customer and the operator and their consumers.
"Similarly for the consumer, it takes the risk out of purchases because they know and trust the brand."
Martin Thorpe, head of beverage solutions at Nestlé Professional, has found that consumers are actually making more conscious decisions to buy in to branded products and have become significantly more risk averse in the past three to four years.
He says: "It seems to be working on a number of levels; they are much more conscious of the money that's available to spend and so they either drop their spend or go for value for money. It's not necessarily intuitive. It's easy to assume that price becomes everything to people but the majority are also rational and know that ‘value' is not just about price, it's about the quality-price equation."
This is a point that Rogers also picks up. Operators have to be really careful, she warns: "There's a difference between something being cheap and being good value for money. Cheap products can be much thinner, and therefore require twice as much for the same effect. Also because of the way products like ours are made, they last longer and so dishes made by chefs have a longer shelf life, which in turn creates less wastage."
"Add to this that people are driven by familiarity, then the quality and trust comes into play as it's all about knowing what you're getting and spending your money on - and that applies to operators and customers alike," Thorpe asserts.
"Recessions make people risk averse, so they choose trusted brands, they go to outlets they're familiar with and they like seeing brands they know as it makes them feel safe. We all have emotional connections and some of that goes back to pre-2007, you revert to the things you trusted before. Trust is all-important. Customers are more likely to return because they see products they know and trust in an establishment. They make choices based on the reassurance that those brands give them."
In addition to the product, Rogers also points out that that by buying big branded products, consumers - both operators and their customers - can buy into the ethics of that company.
Rogers says: "What you're buying into when you buy a brand includes the values of that brand, its environmental policy, the ethics of the brand and all of that is conferred onto the eating establishment as well."
Unilever's sustainable living plan and sustainability agenda is now a key decision making factor within the company's growth and development agenda. "Sustainability is not one of those areas that chefs need to address to stay ahead of the game, they need to address it to stay in the game," she says. And by buying into the brand they can essentially let the big boys do the work while sharing the glory of those efforts.
Rogers adds: "Big companies like Unilever do lots of R&D work which they then share to drive and develop the marketplace. We do a huge amount of market research that helps identify trends and allows our customers to ride on the crest of those waves."
Hellmann's mayonnaise, for example, was one of the first leading brands to use free range eggs and these kinds of things are remembered by the public. Unilever itself, of course, has huge resources, which smaller suppliers can tap into - the Wise Up On Waste toolkit is a prime example.
It can be hard for independents to find the time and resources to research changes, but through the Unilever initiative the hard work has been done and essentially been handed to operators on a plate - free of charge to download - to help them be more sustainable.
The Bottom Line
Independent branding consultant Tessa Stuart says: "The bottom line is that top brands add credence to the operation in the eyes of the punters and make the business and its products seem ‘kosher', leading them to trust the operator more.
She explains that for customers who don't know an operation - say an independent B&B using Kellogg's or a cafe using Heinz ketchup - they will subconsciously be reassured of the quality of the establishment by seeing those familiar, trusted brands.
"That trust is conferred back on the establishment and spread throughout the rest of the operation because they can see you're prepared to pay that premium for quality," she says.
Reputation consultant Paul Goldsmith adds: "The mistake some operators make is to try and cut costs by changing condiments or reducing quality but the best way to cut costs is to retain customers. Marketing data shows it costs five times more to get new customers than retain existing ones, so it really does pay to invest in quality that will be recognised by customers and contribute to them returning."
Brands CHEFS couldn't do without
Total Greek yogurt We get through lots of yogurt at the Victoria as it's served with granola and berries at breakfast, used in dipping sauces, added to curries and used in desserts. We always and only go for Total Greek yogurt and steer clear of imitation Greek ‘style' varieties at all costs.
Paul Merrett, chef-patron, the Victoria, East Sheen, London
Hellmann's mayonnaise It has a good texture, is well seasoned with nice acidity and is made with free range eggs. I also find it takes other flavours well, such as saffron or mustard.
Russell Brown, chef-proprietor, Sienna restaurant, Dorset
Ribena We use it when poaching pears in red wine. The Ribena is mainly for colour. It gives a really good deep red finish all the way through the pear and also gives a great fruitiness/acidity. We reduce the liquid to a syrup afterwards and it really helps make the stock.
Tony Fleming, executive chef, One Aldwych, London
Colman's English mustard powder It adds background spice and heat to anything that needs a little spice, like dressings, bread and sauces. Others just don't have the same spice, heat, consistency or quality. It's exactly what I want.
Mark Poynton, chef-owner, Restaurant Alimentum, Cambridge
The Thermomix It is like having another chef in the kitchen. Not only does it act as a food processor, it also heats mixtures, has weighing scales, a steamer attachment and a paddle, which can be used for cooking risottos or soups.
Wesley Smalley, head chef, Charlotte's Bistro, Chiswick, London
Brands IN NUMBERS: WHAT'S IN A NAME?
â- 63% of consumers are willing to pay extra for a meal where good quality, branded condiments are offered
â- Over half of consumers believe a meal tastes better if branded sauces and condiments are used
â- 73% of consumers are willing to pay extra for a good quality brand of tea/ coffee out of home
â- 45% of consumers believe it's important that a quality brand of margarine, butter or spread is used in sandwiches
Source: TNS UK Omnibus March 2008
â- 63% of customers cited ‘brand' as the most influential factor to buy a snack product
â- 51% of operators agree consumers would rather buy a branded product than one produced on site.
Source: KRAFT survey conducted by RBI Research
â- 73% of consumers prefer Hellmann's because it tastes better
â- 68% of consumers are likely to visit an eating establishment if offers Hellmann's mayonnaise because they know it's a brand they trust
Source: NPD Project Everyplace Jan 2012