Gourmet Shoppers Cooking up retail opportunities

Gourmet Shoppers Cooking up retail opportunities

By: Todd Hale, SVP, Consumer & Shopper Insights, The Nielsen Company

SUMMARY: Television celebrity chefs have helped to usher in a new wave of home-grown culinary connoisseurs. From best-selling books and top-rated shows, to palate-pleasing provisions, home-style gourmet chefs represent a highly desirable demographic that can help boost ailing retail sales at a time of economic uncertainty. Gourmet cooks not only shop more frequently than the average household, but they also spend more dough at club, grocery, drug and dollar stores.

Rachel Ray. Mario Batali. Paula Deen. Bobby Flay. Television chefs have become the newest stars in the celebrity pantheon, introducing the American public to a menu of new foods, recipes, cooking techniques and equipment. Just how popular are these culinary titans? Nielsen reports that the Food Network viewing audience has tripled in size since 2000, carving out an average per minute primetime audience of 878,000 people. The top-rated Top Chef reality TV program posted its best competition ever, closing out season four with 358,000 viewers per minute on average.

Home-style gourmet chefs are heating things up in the kitchen and the grocery aisles. Nielsen reports that one-third of U.S. households consume a gourmet meal frequently or occasionally, with 83% of those meals eaten in restaurants, 37% at home and 22% at the homes of friends or relatives. Peek in the windows at one of every five households and you’ll find a budding gourmet chef slicing and dicing their way to a gourmet meal prepared for the enjoyment of a family member (82%), relative (37%), friend (35%) or business associate (3%).

Feed the need

Forty percent of amateur gourmands starved for information and ideas consult cook books, tune-in to TV cooking shows or surf the Internet for inspiration. In 2007, Nielsen crunched the numbers to determine top cook book titles, which included: Rachel Ray:Just In Time!; Giada De Laurentiis’ Everyday Pasta: Favorite Pasta; Everyday Food: Great Food Fast by Martha Stewart; Christmas with Paula Deen: Recipes and Stories from My Favorite Holiday; and The Joy of Cooking: 75th Anniversary Edition.

Casual connoisseurs shop specialty kitchen stores (16%), use professional cookware and subscribe to a cooking or gourmet magazine (15%), own professional grade appliances (11%) and patronize gourmet stores (10%). Retailers like Hy-Vee, Lunds, Byerly’s, Harris Teeter and Wegmans are cashing in on the foodie fad, building robust web sites complete with videocasts of celebrity chefs preparing meals, along with printable companion recipes, a function key that builds a shopping list as you select ingredients, and coupon offers.

Tasty stats

While home-grown epicures come in all sizes and flavors, they share some unique, and highly desirable, demographics. These include a disproportionately high percentage of households with incomes greater than $100,000 per year, a tendency to cluster in large cosmopolitan centers or affluent suburban areas, and a penchant for holding managerial or professional occupations.

Gourmet cook households log five more shopping trips across all outlets…

Gourmet cook households log five more shopping trips across all outlets each year than other U.S. households and outspend them by 11%, spending 20% more at club stores, 17% more at grocery, 15% more at drug and 11% more at dollar stores compared to all other households. Conversely, foodies are not big spenders at mass merchandisers, under-spending the average household by 11%, or at mass supercenters, where they spent 5% less.

Gourmets spend 66% more at liquor stores than other households…

Profiles in corkage

Food is not the only palate-pleasing provision favored by gourmets. They spend 66% more at liquor stores than other households and 66% more on alcoholic beverages as a major department. Other formats manage to attract a disproportionate share of gourmet cook dollars such as the 16% spending differential at hardware/home improvement outlets, 15% more spent online and at office supply stores and 13% more spent at electronics.

As might be expected, foodies are not fans of highly prepared frozen foods, instead, they demonstrate a pronounced preference for fresh produce, spending 31% more, dairy (14% more), non-food and general merchandise (8% more) health and beauty aids (4% more) and dry grocery (2% more).

Amateur aficionados spend 105% more than non-gourmet cook households…

Loaded larder

On a product category basis, these amateur aficionados pour it on, spending 105% more than non-gourmet cook households on wine, 51% more on liquor, 46% more on spices, seasonings and extracts, 41% more on shortening and oils, 40% more on snacks, spreads, dairy dips, gift cards and party needs, 34% more on butter and margarine and 31% more on fresh produce.

Additional categories stocking these cooks’ cupboards, each with at least a 20% differential favoring gourmet cooks, are sewing notions, flour, charcoal, canned seafood, kitchen gadgets, cottage cheese and sour cream and floral/gardening.

Third-tier product categories where epicures still outspend non-gourmets by double digits include dried vegetables and grains, baking supplies, nuts, pasta, canned vegetables, coffee, cookware, eggs and cheese.

78% of consumers are combining shopping trips and errands…

Squeeze play

All households—including gourmet cooks—feel the squeeze from inflation, and make lifestyle changes to cope. According to Nielsen, 78% of consumers are combining shopping trips and errands, 63% are reducing spending, 52% are eating out less and 51% are staying home more often. Dedicated to the search for better—and better-tasting meals—gourmet cook households refuse to sacrifice on quality, choosing to economize by buying larger size packages (27% more likely than other U.S. households) and clipping coupons (13% more likely).

The value proposition is gaining traction with upscale grocers. Smart retailers are following the lead of operations like HEB’s Central Market which offers free organic milk with weekend purchase as an inducement for foodies to visit, and as an added incentive, a coupon for $10 off a $50 order. The offer is an adjunct to a Flavor Saver program that highlights products selected in every store department and lists these in its newsletter, stating: “We’ve marked items that give you the best taste at the best value.”

Survival skills

Gourmet cooks have devised their own recipe for surviving belt-tightening times, and it includes shopping club stores (31% more likely than other households), buying online (26% more likely) and using public transportation (49% more likely).

An untapped opportunity exists to grab share of mind…

For retailers hoping to sweeten their relationship with big spending gourmet cook households, success rests on carrying the right assortment, making sure to remain on-trend with locally sourced offerings that optimize freshness and taste while minimizing the carbon footprint. An untapped opportunity exists to grab share of mind by developing an integrated marketing and communication approach that relies on a multi-media platform. In particular, the Internet can play a pivotal role, with its many sensory appeals including color, movement and sound, representing an appetizing avenue for building a loyal social network connected to the store.