Expert: Brands Must Consider Emotional Factors of Inflation

 

Hunter Thurman, The Food Institute

May 5, 2022

 

How will consumer behavior shift as prices climb amid inflation?

 

Most c-suites – in food business, and beyond – are inadvertently approaching this question with a purely rational framing, evaluating the marketplace as if every consumer decision is purely rational and based on careful consideration of the merits and drawbacks of a potential decision. After all, this is a perfect explanation as to why:

 

·         A person orders Uber Eats from Chipotle vs. cooking at home.

·         A consumer prepares fresh chicken vs. buying frozen prepared products.

·         A family buys a brand that supports a certain social value or cause vs. a competitor.

 

Right…? Of course not.

 

The flaw in that purely rational assessment is further underscored by the fact that, despite rising costs over the past couple of years, elasticity models have not performed as expected. In other words, as prices went up, people did not consume less as would be conventionally anticipated.

 

Market research company Alpha-Diver specializes in tracking the psychology of consumer behavior, in part via their monthly Omni-Pulse measure and database. As presented in a recent exclusive webinar with The Food Institute and Wall Street analyst, Nik Modi, several human truths can empower food business leaders to thrive despite this inflationary period.

 

The aforementioned experts said food companies need to consider the following these days:

 

Human Truth 1: particularly for younger consumers, the emotional impact of higher prices will matter more than the prices themselves.

 

The pressure, difficulty, and emotional fatigue of higher prices will “hurt more” than the actual spending of more money.

 

Human Truth 2 ...

 

Human Truth 3 ...

 

more, including link to webinar, FI membership info

https://foodinstitute.com/focus/expert-brands-must-consider-emotional-factors-of-inflation/