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MRI Helps Leading Investment Firm Evaluate Packaged Good Companies
American consumers are opting for more nutritious lifestyles and the packaged goods industry is responding with an array of healthy meals, snacks and desserts. Healthier versions of packaged food products
- ones that contain low-fat, low-sugar, low-sodium or high fiber ingredients
- have grown seven percent annually between 2002 and 2005. In contrast, regular packaged food growth was less than two percent annually. Healthier products now represent 22 percent of the total U.S. packaged foods market. Investors, eager to profit from the healthy food boom, are looking to put their dollars in companies that are well positioned in this niche.
Investment firm Sanford C. Bernstein & Co., LLC, a subsidiary of AllianceBernstein, analyzed the impact of healthier eating patterns on the consumer packaged goods industry in their breakthrough study,
Beyond Atkins - The Trend Towards Healthy Eating Among U.S.
Consumers. In it, they evaluated the product portfolios of major U.S. packaged food companies to determine how well positioned each is to take advantage of continuing growth in healthier food consumption.
“MRI data provided key information for the analysis,” says Alexia Howard, senior research analyst - US Foods Sanford C. Bernstein & Co., LLC. “The ability to marry purchase and usage data and further segment consumers by age and attitudes towards healthy eating provided information that is in many ways the backbone of this study.”
MRI data were used in two key parts of the analysis:
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To identify purchase, usage and attitudes towards healthy food products by age group;
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To calculate “healthiness scores” of various package goods categories and products/brands within those categories.
Demographics Will Drive Category Growth
MRI data show that demographic changes are likely to accelerate the growth of healthier food products. The baby boomer generation is increasingly concerned with health issues: 30% of boomers (for this analysis, Bernstein Research defines
boomers as age 50+) report that they buy healthier foods, a greater percentage than the rest of the population. Specifically, baby boomers are more likely to purchase reduced fat/sugar/cholesterol/sodium and high fiber products compared to the younger
population.
| MRI Psychographic data were used to further segment consumers according to nutritional lifestyles. For example, when asked to what extent they agree with the statement, 'I try to eat healthily these days and pay attention to my nutrition', 30% of the population reported being highly
health conscious in their eating habits, while 20% reported being less health conscious.
(50% were assumed to be neutral in their eating habits.) The respondents were grouped by age and each group's response was indexed to the response of the overall population. |
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Attitudes
Towards Eating Habits by Age Group
Indexed to the Average Population |
|
Attitudes
in
Eating Habits |
Adults
18- 34 |
Adults
35- 49 |
Adults
50+ |
| Health conscious |
83% |
87% |
124% |
| Neutral |
96% |
106% |
98% |
| Less health conscious |
135% |
104% |
68% |
| Difference
between more & less health conscious |
- 52% |
17% |
56% |
Source: Beyond Atkins - The Trend Towards Healthy Eating Among U.S.
Consumers
Based on MRI data
The index number of 83% for health conscious respondents aged 18- 34 indicates that the percentage of
people aged 18- 34 who consider themselves health conscious
is 0.83 times that of the population average. |
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Product Portfolios
Identify Companies Positioned to Ride Health Boom
Each company's product portfolio was analyzed using MRI and other data to determine if they are well positioned to take advantage of continuing growth in the healthier products category. MRI data identified the product categories purchased more heavily in the last six months by consumers who self- report being highly
health conscious in their eating habits and by those who report being less
health conscious.
The responses for each consumer group were indexed to the purchasing behavior of the overall population. Bernstein Research then took the difference between the index numbers for the highly
health conscious respondents and for the less health conscious respondents to calculate a score that could be used as an indicator of the perceived healthiness of the product category. For example, yogurt yields an index of 108 for
health conscious consumers and an index of 89 for less health conscious consumers.
To calculate yogurt's healthiness score, Bernstein Research subtracted 0.89 from 1.08, which gives a score of 0.19 or 19%. A positive value represents a product category that is consumed more heavily by
health conscious consumers; a negative value represents a product category that is consumed more heavily by less health conscious consumers. This process was then repeated for individual brands.
An overall 'category health' score for each company was then created by linking each company's retail sales by product category to how closely respondents associate these products with healthy eating. An overall 'brand health' score for each company was calculated using the sales percentage for each of its brands multiplied by the brand's respective healthiness score.
Conclusions
“Overall, our analysis on the healthiness of different companies' product portfolios identifies each
company's relative positioning to capitalize on the healthy eating trend,” says Howard. “Investors appear to have found this approach quite helpful in providing an objective measure of the relative healthiness of the products offered by different packaged foods companies. The MRI data was instrumental in enabling us to get at this by linking consumer attitudes towards healthy eating with actual purchasing behaviors.”
AllianceBernstein L.P. is one of the largest publicly traded global asset management firms in the world with approximately $659 billion in assets under management as of September 30, 2006. It serves institutional, high net worth and retail clients worldwide with diversified investment management services. Additionally, through its Sanford C. Bernstein & Co., LLC ("Bernstein LLC") subsidiary, AllianceBernstein provides in- depth research, portfolio strategy, trading and brokerage- related services.
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MRI's Issue Specific Readership and Accumulation Study in Progress
What is your total magazine audience, and how quickly does that audience accumulate for
individual issues of your magazine? MRI's Issue Specific Readership and Accumulation Study, which will be released in April 2007, will
provide these measures through innovative magazine audience research.
“MRI undertook this rather complex research project to meet the industry's need to keep magazines on an equal playing field with other media in the evaluation
process - and to better calculate magazines' contribution to advertising
ROI,” says Kathi Love, Mediamark Research Inc. president and CEO. “Publishers and agencies will be able to quantify ad exposure for individual print campaigns in much the same way marketers now gain insight about broadcast campaigns.”
Interviewing for MRI's Issue Specific Readership and Accumulation Study is a long- term endeavor
- the process began last May, 2,500 interviews are completed weekly, and a fresh sample is used each week. When the initial data are released in the spring, more than 110,000 interviews will have been completed with
results available for over 200 titles.
The study is being conducted online to achieve the stability of large samples in a compressed time period. Interviewing is expected to continue indefinitely after the inaugural release, and data will be conformed (or modeled) to MRI's national readership estimates so the industry will have reliable issue- specific audience estimates.
Issue- specific data will be released approximately eight to twelve weeks after an issue's on- sale date.
While MRI is excited about the potential of this study, we need to emphasize that it will not replace MRI's
Survey of the American Consumer. It is an enhancement to our average issue audience estimates, enabling publishers, agencies and media mix modeling firms to estimate readership and the rate at which an audience reaches that readership for specific magazine issues.
MRI representatives reviewed the Issue Specific Readership and Accumulation Study with major ad agencies and publishing houses and
the study has been met with enthusiasm.
If you'd like more information about this study, please contact
us.
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What are "Page Exposures" and
What are Some Ways I Can Use These Measures to Help me in my Sales
Efforts?
MRI's "Page Exposures" are mathematical calculations that provide information beyond total audience measures. They are used as a measure of reader involvement and can be analyzed in the context of reach & frequency schedules. Page Exposure data are derived from a series of qualitative questions in the personal interview, and are asked only of respondents who are readers of specific magazine titles.
MRI provides measures for Total Page Exposure and Average Page Exposure. They are important as a method for estimating the likelihood that adults in a given group will be exposed to, or see, a page in a given magazine.
Total Page Exposure is the total number of different times an average page in the specified magazine is looked at by the readers of that magazine. Average Page Exposure is the
Total Page Exposure divided by total audience, representing the average number of times a reader looked at an average page.
These measures enable magazines to get credit for repeat exposures to their advertising. For example, Bridal magazines have long shelf lives and are regarded as catalogs, therefore readers have the opportunity to see the ad many
times - giving advertisers repeat exposure for a single Insertion.
Average Page Exposure data often are used as a tiebreaker to differentiate publications with similar index, CPM's and overall audience features. Cost efficiency also can be calculated on
Average Page Exposure.
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Teens Segmented by Attitudes Towards Finance, Fashion,
the Internet and More
Although teens flock together when they are shopping, instant messaging or just hanging out, their attitudes can be anything but similar. Businesses that understand
teen mindsets have a lot to gain when targeting younger consumers.
MRI will soon release a series of psychographic segmentation analyses for teen consumers based on responses to batteries of attitudinal questions in the
2006 Teenmark Study. These segmentations group teens according to their disparate attitudes regarding earnings, spending and financial information (Finance); style and
clothes/accessories shopping (Fashion); and Internet usage. Segments based on attitudes towards communication, relationships and school also will be available.
These teen segmentation tools will be released in early 2007. For more information,
please contact
us.
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Fall 2006
Survey of the American Consumer Highlights Changes in Media Usage and
Expands Hispanic Data
MRI has released new demographic and media data in the Fall 2006
Survey of the American Consumer:
Demographic
Data regarding the Hispanic population have been expanded to include: a) presence of Hispanic adults (besides the respondent) in the household,
and b) language spoken outside the home (asked only of Hispanic respondents).
Media
The new media data include information on magazines, newspapers, the Yellow Pages and the Internet.
For magazines, the list of actions taken as a result of reading a magazine
was expanded to include whether readers of a particular publication visited another website (other than that magazine's).
For newspapers, new data are available on readership of newspapers' health sections.
Yellow Pages data are now released in quintiles (the top 20%), making Yellow
Pages easier to compare to other measured media.
Internet data now include time spent online; visits to approximately 45 new websites; whether or not one connects to the Internet on a mobile device and the name of the household's Internet service provider (ISP). Additional Internet activities include: online dating; obtaining childcare or parenting information; looking at TV listings online; looking up movie listings and show times; looking for recipes; downloading podcasts or podcasting and whether one had written an online blog.
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