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How Supermarkets Are Shaping Up and Growing Their Lower-Calorie Products: An Analysis of the Fence Sitter Consumer Segment

Hank Cardello, Jeffrey Wolfson & Lauren Warren

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Hudson Institute, a nonpartisan policy research organization, has studied the link between healthier, lower-calorie products and the sales performance of the companies that offer them. It has completed several landmark studies covering consumer packaged goods (CPG) food companies and restaurant chains that have demonstrated the positive impact of lower-calorie and/or better-for-you (BFY) foods and beverages on overall sales growth. Funded by the Robert Wood Johnson Foundation (RWJF) or the Healthy Weight Commitment Foundation (HWCF), these studies have demonstrated that selling more lower-calorie/BFY foods and beverages benefits companies financially and therefore should be aggressively pursued by industry.

As a natural follow-on to this growing body of research, Hudson Institute published a study focused on the performance of supermarket retailers, the front lines where consumers purchase these products. This latest study aimed to determine whether supermarket chains, like CPG companies and restaurant chains, are also reaping business benefits from selling lower-calorie products. The study found that although supermarkets are gaining the majority of their food and beverage sales growth, 59 percent, from lower-calorie products, they are not fully capitalizing on the growing demand for lower-calorie products found by CPG and restaurant industry studies. The study also found that lower-calorie sales growth is outpacing higher-calorie sales growth in both food deserts and non-food deserts, signifying that consumers, regardless of where they live or shop, are increasingly seeking out lower-calorie alternatives, and represent a market ready for change.

To further qualify these findings and build specific insights for retailers to utilize in order to fill this gap, the current report will focus on shedding light on supermarket performance among specific health and wellness segments in the population. Utilizing data from the Natural Marketing Institute (NMI), a leader in segmentation research to track trends and attitudes related to health and wellness, we aimed to explore sector performance within the key consumer target for better-for-you growth, the Fence Sitter segment.

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