Vermont has long benefited from a reputation for high-quality, authentic food products. This reputation, or “market value,” offers opportunities for increased sales if producers can gain visibility and align with consumers’ needs. To leverage market value, producers must employ good marketing strategies including market research, market positioning, brand development, and marketing tactics. The relatively small size of many Vermont producers limits competitive advantages gained from economies of scale, and their marketing spending is generally believed to be an area of under-investment compared to national industry averages.

Complicating Vermont producers’ ability to fulfill consumer demand is that today’s food marketplace is no longer the predictable, regular weekly trip to the grocery store. Consumers now purchase food in many different outlets (e.g., supermarkets, “big box” stores, specialty stores, online, etc.) and at many times of day.1,2 Disruptions in traditional media and retail channels are mirrored in consumers seeking shopping experiences that fit their custom needs (see Grocers brief, Direct Markets brief). They are seeking products that align with their particular dietary preferences, and demand transparency of ingredients and production practices.

To stay viable, Vermont’s food producers must be savvy to these rapidly shifting consumer trends. In addition, investment is needed in both the private and public sectors to elevate the presence of Vermont products to consumers. Recent examples of state investment to understand consumer demand include consumer-based market research from the Vermont Agency of Agriculture, Food and Markets (VAAFM) and Agency of Commerce and Community Development (ACCD) to understand consumer perceptions related to the Vermont brand, maple, and specialty cheese.

Demographic Consumer Trends and Consumer Values-based Demand

While baby boomers (b. 1946-19643) still have impact, millennials (b. 1980-19964) are now the largest generational group and are influencing the marketplace with their purchasing choices. Millennials communicate their identity and values with their product choices. They favor unique and personal experiences, which leads them to try new brands, new channels, and to seek niche shopping experiences. Meanwhile Generation Z (b. 1996-2015) is emerging as the largest and most ethnically diverse generation. Millennials and Gen Z consumers are increasingly vocal about their purchase experiences and turn to their online networks for purchase advice. Further, these hyper-connected consumers are seeking purchase experiences that appear authentic and will be share-worthy.

Today’s consumers demand products that meet their own health needs, emotional values, and broader social concerns. Many of these values have direct relevance to Vermont producers and present strategic marketing and growth opportunities. Local, organic, and non-GMO labels have widespread market appeal. The U.S. local food market grew from $5 billion in 2008 to $12 billion in 2014 and is expected to rise to $20 billion by the end of 2019. Across the board, consumers are emphasizing a need for increased transparency in the foods they are choosing, and to know more about agriculture and food manufacturing practices.

Consumers feel strongly that companies should help improve the environment, and half of global respondents say they’re inclined to pay higher-than-average prices for products with high quality standards, which consumers often associate with strong sustainability practices. Just behind safety and function, consumers are willing to open their wallets for products that are organic, made with sustainable materials, or deliver on socially responsible claims. As the concept of “sustainability” matures, consumers are getting more specific in their demands, seeking bundled benefits (e.g., high-protein organic milk) and product innovations (e.g., plant-based proteins).

The organic market is maturing and mainstreaming, leading to declining price points for producers, while the marketplace is seeking large-scale solutions to meet price and volume demands. GMOs continue to rank high in the list of consumer concerns, with almost universal consumer awareness of GMOs, and an estimated half of shoppers avoiding them. Concerns about animal welfare may have increasing impact on Vermont’s food producers, especially as consumers are turning to plant-based beverages and meat substitutes. Plant-based proteins are a good example of a market trend that is meeting the consumer demand for perceived benefits to the environment, health, and animal welfare.