INTERNATIONAL CONSUMER SURVEY Impact of Covid-19 on positioning of brands

By David Dyer, Luke Pearson, Maxime Lapeyre and Robert Gaston - April 2020 Report Details

This survey was deployed on Saturday Background & Methodology 4th April (NZT) through until Tuesday 7th April (NZT). Purpose A questionnaire was sent to a nationally representative sample of 1947 respondents in (446), This study was commissioned by New Limitations (444), (503) Zealand Trade and Enterprise in and United States (534). This was response to the COVID-19 pandemic. This data is reflective of a point in time completed online through Toluna’s during the Covid-19 disruption. The QuickSurveys platform. This data was The purpose of this report is to provide markets were chosen to reflect different then cleaned and weighted using an understanding of how consumers are stages of the disruption and different census data for any biases in reacting overseas so that New Zealand regions that New Zealand export to. demographic profile businesses know of how to position their (age/gender/region).The number of brands in these challenging times. Consumer’s thoughts and behaviours respondents per question is available at are changing quickly so further data is the end of this report. needed over time to understand how trends are developing. The questions devised were to provide insight into shopping behaviour, perceptions of the future, perceptions of NZ, and attitudes of consumers during the pandemic.

1 How to use this document

This document is designed to provide The 4 markets of the US, UK, Australia Deep dive notes: some thought starters for businesses and Singapore were chosen as they Household incomes have been split around how trends are developing or represented 4 regions of the world, as using proportions of the country from continuing to think further about how well 4 different stages of the pandemic. which the respondent is completing the their positioning can be developed going survey. forward. th This data is currently a point in time High = 80 percentile and above th measure and even the questions that Medium = Below the 80 percentile but th A lot of the claims tested were based on are future focused need to be treated above the 20 th hypothesis around what was going on as such. Further research will ideally be Low = 20 percentile and below around the world during the lockdown, done to test how these claims and and how the business landscape may attitudes change over time. look after the disruption dissipates. Category Base Some of the findings back up these hypothesis and may be intuitive, others High Income Households 189 differ by market. Where there are Medium Income Households 1134 intuitive results, this can be used to help provide evidence of these trends in the Low Income Households 304 market to help provide businesses with Age - 18 to 34 633 confidence. Age - 35 to 54 681

Age - 55+ 633

2 Contents

SECTION 1 SECTION 2 SECTION 3 Trust and Safety How we are eating Natural, organic and sustainable How consumers view on the safety and Behaviours to what and where we eat Consumers view on their shopping trust of products has changed and how consumers think this will habits towards natural and organic change post COVID-19 claims

Pages 5-15 Pages 16- 23 Pages 24-31

SECTION 4 SECTION 5 SECTION 6 Quality, Indulgence and The shift to online Country and Demographics Innovation What consumers are looking to buy How have habits changed and what are Deeper dive to highlight country during and post COVID-19 consumers views towards online differences and demographics shopping behaviours

Pages 32-37 Pages 38-41 Pages 40-50

3 Key Takeaways

TRUST AND SAFETY – Trust and safety are important considerations right now, this is most important for higher income consumers. New Zealand 1 products are well trusted and considered safe in Australia, Singapore and UK, this is particularly high for older consumers and higher income consumers. In the US, the trust is a lot less than other markets, but does pick up for higher income consumers. Higher Incomes are a clear fit for NZ products around trust and safety.

HOW WE EAT – Both higher income households and younger people plan to change their eating habits the most. 52% of high income households plan 2 to cook their own food more than they did pre-pandemic, and 32% of 18 to 34 year-olds plan to dine out or get takeaways more than they had done pre-pandemic. Higher income households have increased their consumption of shelf stable products during the pandemic, but intend on continuing to purchase these products at the same scale.

NATURAL, ORGANIC and SUSTAINABLE – Consumers prefer to buy natural (58-75%), especially in Singapore (75%), but converting consumers in 3 search of natural products into organic consumers seems more likely in the United States than in other markets. Across the four markets, 23% (UK) to 43% of consumers intend to prioritise natural and organic more after the pandemic. The younger and the higher the income the more likely consumer seems willing to engage in natural and organic products in the future.

QUALITY, INDULGENCE, INNOVATION – Consumers are still looking to treat themselves post COVID-19. This is interesting as this doesn’t differ 4 between income levels. Young males aged 18-34 were much more likely to look for innovative products compared to any other demographic

SHIFT TO ONLINE – There was general consensus that most consumers thought they would do more online shopping even though for those aged 5 55+ more preferred to go instore. The younger generation aged 18-34 wish there was more to buy online and majority preferred to do their shopping online.

PERCEPTION OF NEW ZEALAND – NZ is perceived as producing high quality goods, and being strong on environmental and natural cues. 6 Singapore has the highest overall perception of NZ products, while the US has the least.

4 Trust and Safety

5 SECTION 1 TRUST AND SAFETY

Trust Building trust an essential in divided times.

One thing that people in the 4 different markets agree is that trust is important. Between 71-86% of respondents in the markets say they would buy their trusted brands over others whenever they’re available.

Unsurprisingly, in all four markets, consumers see their home products as the most trusted (between 86% and 93%). And preference for products made in these countries over international products was also very high (57%-78%). Singapore (57%) is much less likely to have this preference than the US (77%) or Australia (78%). New Zealanders had a preference closer to Singapore at 61%.

Something to consider: How can NZ companies build up the local connection?

Products from NZ are the second most trusted in Australia and 5th-6th in other markets.

77% of Australians and 75% of Singaporeans agree that they trust products from NZ. But this is much lower in the US market where only 50% agreed. 25% of Americans don’t even know NZ products, which is much higher than other markets (4%-13%)

Countries hardest hit in the early stages of the epidemic are somewhat further down the list – but it is difficult to tell whether this is an impact of Covid-19 or people’s original perceptions. Getting this data over time will help identify any impact.

6 SECTION 1 TRUST AND SAFETY

Trust in International products by age Younger consumers happier buying international.

There are more younger people that intend to buy more I expect to buy international products… international products in the future. However, far more people across all demographics (except for Singapore) are intending to buy less international products than in the past.

Older demographics have much higher preference for products from their own country. Those over 55 in Australia and those over 35 in the US have the strongest preferences.

I would prefer to purchase products from my own country The older demographic are the most loyal to their trusted than from overseas brands, youngest the least loyal to the brands they trust, but this is still high for all demographics.

If my trusted brands are available I will purchase these over other products

7 SECTION 1 TRUST AND SAFETY

Trust in NZ products NZ products trusted most by affluent consumers.

NZ products are trusted much more in Australia and Singapore I trust products from NZ than they are in USA. In the US, a quarter of consumers don’t even know NZ products.

In Australia, Singapore and UK, NZ brands can leverage their provenance story better than would be possible in the US.

High income consumers in these markets have a stronger preference towards NZ products as well. This is likely linked to where NZ products tend to be positioned at the higher end of most categories.

8 SECTION 1 TRUST AND SAFETY

Trust in NZ products by age and gender Older consumers have most trust for NZ products.

In Australia, Singapore and UK, Older demographics trust I trust products from NZ (USA respondents) products form NZ more than younger consumers. This was seen strongest in the UK where this could be due to historically strong trade partnerships between the countries.

Interestingly Males in the US have a much higher trust of NZ products than females. This translated to Females having an overall lower opinion of NZ products in the US than their male counterparts. I trust products from NZ (Other markets)

9 SECTION 1 TRUST AND SAFETY

Safety Build off trust in NZ products by highlighting product safety in anxious times.

At times like these, Health becomes people’s number one priority. In NZ we saw 94% agree that their health, and the health of their family was their priority right now. This is slightly lower internationally with between 82% in the UK and 90% in Singapore agreeing with that statement. These are still very high, but does indicate that some markets aren’t taking the health risk as seriously as in NZ.

The safety of NZ products is seen as very high in Singapore (81% agree), Australia (77%) and UK (70%), but less so in the US (49%). Respondents in the US did tend to rate NZ lower on most attributes than the other markets.

Consumers in different markets all agree that they’re going to focus on the safety of products more in the future (41%-62%) than in the past (4%-5%).

Something to consider: Right now with so much anxiety around health, developing a strong safety message around NZ products could be helpful for developing NZ brands overseas.

10 SECTION 1 TRUST AND SAFETY

Prioritisation of Safety Safety most important to higher income groups.

With all markets there is a belief from consumers that they will I expect to pay attention to the safety of what I buy pay more attention to the safety of what they buy. This is much lower in the UK than other markets and is highest in Singapore.

There is a trend towards higher income consumers thinking they’ll pay the most attention to the safety of what they buy. Businesses looking to target these higher income consumers should think about how they can get the safety message of these products out as consumer priorities shift.

11 SECTION 1 TRUST AND SAFETY

Safety of New Zealand products NZ products able to meet safety needs of high income consumers.

NZ products are considered to be quite safe in Australia, UK New Zealand products are safe (All markets) and Singapore with between 70-81% agreeing with that statement. However in the USA this drops down to 49%.

There is a trend towards higher income individuals believing NZ products are safer than lower income individuals in these markets.

This resonates with higher income consumers prioritising the safety of products more. Companies targeting higher income consumers can leverage their NZ credentials.

For most markets, there is a trend towards older consumers New Zealand products are safe (USA) having more trust in NZ products than young consumers. However this isn’t seen in the US, where the older demographic has the lowest trust in the safety of NZ products. This could be a hallmark of closer historic ties to some markets (particularly UK and Australia). New Zealand products are safe (other markets)

12 SECTION 1 TRUST AND SAFETY

Health concerns vs healthy food Anxiety around health not always translating to eating healthy for older consumers. My health and the health of my family is my priority right now Older people and females are prioritising health and the health of their families more right now than younger people and males. This is consistent across every market.

However, this doesn’t translate to their expectations around buying healthy food. More younger people expect to prioritise healthy food more in the future than older people. Men and woman were equal here as well.

Products targeting a healthier lifestyle are likely to resonate I expect to prioritise healthy food and drink products better with younger consumers, despite older consumers also claiming it to be a priority for them.

13 SECTION 1 TRUST AND SAFETY

Health claims What claims can your company legitimately make around health?

There is generally consensus that consumers are wanting to buy products with strong health claims right now. Between 54% and 69% are looking for products with anti-bacterial properties.

While between 46% and 65% are looking for immunity boosting properties.

Something to consider: With consumers so focused on their health and the health of their family right now, being able to make legitimate health claims with your products is going to be important for NZ businesses to drive growth.

14 SECTION 1 TRUST AND SAFETY

Health claims by demographic Health claims resonating best with younger consumers and higher incomes. I prefer to buy products with anti-bacterial properties

Anti-bacterial properties and immunity boosting properties are both preferred more by those under the age of 55. There appears to be some dissonance between the groups that are saying they prioritise their health, versus the groups that are buying more health conscious products. Understanding what health means at different life stages is important for companies to consider.

Both of these claims are preferred by high or medium incomes and slightly more by females. I prefer to buy products with immunity boosting properties

Broader health claims are resonating more with the under 55+ and higher incomes. However, this may change with different product types

15 SECTION 2

How we are eating

16 SECTION 2 HOW WE ARE EATING

Cooking vs food service

Shift towards Grocery away from Food Service may last beyond the lockdown.

Right now, a lot of consumers don’t have much choice about eating from home rather than going out to eat. In NZ 77% of consumers said they were planning to cook their own meals more right now.

When the Covid-19 disruption is over, 55% of Singaporeans think they’ll cook more themselves than they did in the past. While 35% of the UK agree that they plan to cook more themselves in the future than in the past.

In Australia (34% less vs 17% more), UK (34% vs 18%) and US (35% vs 26%) consumers generally expect to eat out or get takeaways less than in the past. While in Singapore slightly more people expected to eat out or get takeaways more (35% more vs 30% less).

Some things to consider: Cooking more at home and eating out less is good news for grocery based food companies, but less so for companies that go through food service. There doesn’t appear to be evidence of a strong bounce back on the cards for food-service when the lockdown is lifted, it is likely to be more gradual.

17 SECTION 2 HOW WE ARE EATING

Who is planning to cook at home or eat out A third of people across all demographics are planning to eat less takeaways post pandemic. I expect to eat out or get takeaways. Across all demographic groups and territories (apart from Singapore) there are is a higher proportion of people intending to cook more than intending to eat out more.

The proportions of those who expect to get takeaways or eat out less appear to be relatively uniform across the demographic categories. The variation is in the people who said they are likely to eat out more, the highest are 18 to 34 year-olds (32%), and those with high incomes (28%).

Similarly younger people and richer households also plan to cook their own food more than they had done previously to the I plan to cook my own food, or make things from scratch. pandemic. The demographic group with the least intent to cook from scratch more is the 55+ group. This could indicate that they already cook at home most of the time.

The extent to which this intent will play out in reality is not currently known, but richer households have the financial means to continue this trend, and younger people have less engrained habits. Time poor demographics are likely to see a return to pervious eating habits.

18 SECTION 2 HOW WE ARE EATING

Shelf Stable vs Healthy

Consumers want both shelf stable and healthy products.

Shelf stable products are popular right now. In New Zealand there was a clear trend of consumers buying more pantry staples that would last for a long time. Internationally we’re seeing between 50-61% of people in these markets agreeing that they’re buying more shelf stable products than normal.

As noticed with NZ, consumers internationally also plan to buy more shelf stable products in the future than in the past (between 38%-48%. This is well above the number of people that thought they would buy less (6%- 12%) shelf stable products in the future than the past.

Consumers in these markets also expect to prioritise healthier foods and drinks in the future (34-50%) than in the past. So current trends around a shift to healthier eating are expected to hold.

Something to consider: Shoppers seem to both want more shelf stable products and healthier products. Products that can do both for shoppers would be hitting a sweet spot for the future.

19 SECTION 2 HOW WE ARE EATING

Shelf Stable appeals to who Self stable increases are likely to be a short term change for high income households. I’m buying more storable/self stable products. Across all demographic groups the proportion who intend to buy shelf stable products into the future is lower than those who are currently buying shelf stable products.

The most dramatic difference current behaviour and future intent is 22% for high income households, in other demographics its between 11-16%. I plan to buy products that keep for long time. In Singapore this change from current to future intent for the higher income group is 7%, but in Australia it is 30%, UK 27%, and US 22%.

Note: This last point is take from a very small number of responses so is more indicative than other insights in this report.

20 SECTION 2 HOW WE ARE EATING

Healthy food and drink products 18 to 34 year-olds expect to prioritise healthy food and drink post- pandemic. I expect to prioritise healthy food and drink products Between 34% and 52% of each demographic group intend to prioritise healthy food and drink products post COVID-19. The wealthier households (49%) and younger demographic (52%) have the highest proportions intending to prioritise healthy food and drink.

Singapore (60%) is the market with the highest proportion of the population keen to prioritise healthy food and drink post pandemic. Followed by the US (48%), United Kingdom (39%), and then Australia (38%).

21 SECTION 2 HOW WE ARE EATING

What people eat

Science vs fresh aren’t in competition, consumers want both.

Consumers don’t see scientifically tested and fresh/natural products as being in competition, instead consumers want both. Between 37%-55% in different markets say they want more fresh produce, while 55%-65% of people in these markets prefer scientifically tested products.

Something to consider: This indicates that consumers don’t want to be trading off Scientifically tested vs Fresh and natural, consumers want the best of both worlds.

There is some indication that consumers are slightly more likely to eat less (18%-32%) animal products in the past than they are more (11%-14%) but the majority of people expect this to be the same as current (54%-71%)

22 SECTION 2 HOW WE ARE EATING

What types of products appeal to who High income households prefer scientifically tested products.

The majority of people would prefer to buy scientifically tested I prefer to buy scientifically tested products. products ranging from 57% in lower income households to 70% in higher income households. In other demographic groups its sits around 60%. Singapore (66%) and the US (64%) are the two countries who prioritise testing the most.

Singaporeans have the highest proportion of its population intending to eat fresh produce post-pandemic, at 55%. I plan to eat fresh produce. Young people and higher income household have indicated an intent to increase their consumption of animal products. While at the same time across the demographics there is about a fifth of people who are intending to reduce the amount of animal products the consume. This is at its highest in Singapore at 32% of people planning to eat less animal products post- pandemic. I plan to eat animal products.

23 Natural, organic and sustainable products

24 SECTION 3 NATURAL, ORGANIC AND SUSTAINABLE PRODUCTS

Preference for natural, organic Natural products praised, especially in Singapore and Australia.

Consumers across all markets claim that they prefer to buy I prefer to buy natural products natural products. There are however notable differences between Australia and Singapore on one end (66% and 75% respectively), and the United Kingdom (57%) and the United States (59%) on the other.

Interestingly the translation from the share of consumers into natural products to organic products differ from a country to another. In the US for example, 44% prefer organic, a percentage similar to Singapore’s (47%). These numbers are lower in the UK and Australia (34% and 35% respectively). I prefer to buy organic products

Something to consider: Converting consumers in search of natural products into organic consumers seems more likely in the United States than in other markets.

25 SECTION 3 NATURAL, ORGANIC AND SUSTAINABLE PRODUCTS

Preference for natural, organic – Per profiles High incomes more likely to prefer natural and organic.

Consumers with higher levels of income (top 25%) tend to I prefer to buy natural products prefer natural and organic products more than consumers with a lower income (lower 25%).

A higher percentage of females tend to prefer natural products (68% vs 60% for males). But this gap is visible only in Australia and Singapore, and less so in the USA and the United Kingdom.

We did not observe major differences between age brackets for natural products, but we did for organic, where a larger share of the youngest prefers this type of products. We noticed that trend across all markets buy Singapore, where organic I prefer to buy organic products preference is steady across all generations.

26 SECTION 3 NATURAL, ORGANIC AND SUSTAINABLE PRODUCTS

Ethical, sustainable A majority of consumer have a preference for sustainable, and ethical.

Overall, consumers claim to favour sustainable products with no I prefer to buy ethical (e.g. fair trade products) notable difference between countries (62%-66%) apart from Singapore (73%). Preference for ethical products (e.g. fair trade) scores slightly lower in most countries (59%-58%), and especially in the UK (49%).

Per profile Females tend to prefer ethical (59%) and sustainable (70%) products more than males (53%; 59%), especially in Australia (65% vs 50% for ethical ; 70% vs 58% for sustainable). No gender gaps have been noticed in Singapore. I prefer to buy sustainable products Something to consider: Converting consumers in search of natural products into organic consumers seems more likely in the United States than in other markets.

27 SECTION 3 NATURAL, ORGANIC AND SUSTAINABLE PRODUCTS

Perception of New Zealand natural and organic products Americans, as opposed to other consumers, don’t rate NZ products as high. New Zealand do natural products very well Perception of New Zealand’s ability to produce natural products is fairly high in Australia (68% agreement), the UK (66%) and even more in Singapore (79%), but isn’t recognised so much in the US (43%). With a smaller share of consumers inclined to buy natural and organic in these two countries, a wider part of them could not position themselves on this item.

Similarly, the same observation was made with organic products. More consumers acknowledge New Zealand’s ability New Zealand do organic products very well to produce quality organic products in Singapore (72%), followed by Australia (57%) and the United Kingdom (50%), and finally the United States (40%). Knowing that preference for organic products scores similarly across markets, Americans consumers might have a lower awareness of NZ organic products, might have higher standards, or both.

Something to consider: NZ’s image can help companies trade off natural, organic and sustainable claims in Singapore, Australia and the UK, but ground work still needs to be done in US.

28 SECTION 3 NATURAL, ORGANIC AND SUSTAINABLE PRODUCTS

Perception of New Zealand products – Per profile Notable differences amongst income and age groups.

Consumers’ perception of New Zealand's ability to produce New Zealand does natural products very well quality natural and organic products is higher amongst populations with a higher level of income.

In the United States, this perception to produce good natural or organic products is particularly low within the older population (33% for natural; 32% for organic) and females (37%; 36%; 48%). Lower income population also tend not to rate New Zealand products too high (38%;27%) compared to medium and higher income groups. New Zealand does organic products very well

29 SECTION 3 NATURAL, ORGANIC AND SUSTAINABLE PRODUCTS

Future intents At least a quarter of consumers to prioritise natural and organic more.

More consumers intend to eat more fresh produce in the future I plan to eat fresh produce in Singapore (55%) than in other countries. As for animal products, just a few are claiming an intention of eating far less or somewhat less. As for previous items, Singapore ranks higher (32% of consumers) than other markets (18%-20%).

Despite not being the majority, more consumers intend to prioritise natural & organic, or sustainable products in the future, compared to those who wont, especially in Singapore. I plan to prioritise natural or organic products

Something to consider: The known trends towards natural, organic and sustainable is still ongoing and expectation is that this will continue into the future.

I plan to prioritise sustainability

30 SECTION 3 NATURAL, ORGANIC AND SUSTAINABLE PRODUCTS

Future intents per profiles Younger generations more likely to eat more fresh, natural, and sustainable. I plan to eat fresh produce 55+ consumers intend to eat more fresh produce in smaller proportions than the other generations, across all markets but Singapore.

A slight difference is also to be noted between high level of income and lower level. High incomes will prioritise fresh, natural or organic, and sustainable even more than other groups.

I plan to prioritise sustainable products I plan to prioritise natural or organic

31 Quality, Indulgence and Innovation

32 SECTION 4 QUALITY, INDULGENCE AND INNOVATION

Quality and indulgence Despite trying economic conditions, consumers still want to treat themselves.

Despite the tough economic circumstances that a lot of people will be under, between 32% and 42% in different markets think they’ll treat themselves more than in the past, compared to between 13%-18% who will do this less. This is in line with what was noticed in China after the SARS virus in the early 2000’s. Something to consider: Luxury goods could still do ok after Covid-19, a similar bump was seen in China after SARS, smaller formats might be needed from some categories to make sure this is still economical.

New Zealand products are seen as being of a high quality (between 51-76%). This was one of the most agreed statements about New Zealand across each market. Singapore had the highest belief in NZ’s quality at 76%, while the US had the lowest at 51%.

New Zealand’s wines were also seen as being of a high quality by the majority of respondents in Australia (68%), UK (65%) and Singapore (63%). 44% of the US also agreed with this – it will be interesting to look at the US a bit more regionally to deep dive this further.

Something to consider: How can NZ companies utilise implicit quality credentials?

. 33 SECTION 4 QUALITY, INDULGENCE AND INNOVATION

NZ perception of quality by demographic NZ products seen as high quality amongst more affluent consumers

New Zealand is perceived as being a producer of quality New Zealand makes quality products products by those in Australia, UK and Singapore, but less so by the US.

Those with higher incomes in these three markets are more likely to agree that New Zealand makes quality products than those with lower income, This is likely to be based on where NZ products are positioned in the market at the higher end.

Younger consumers are less likely to say that NZ makes quality wines, which may show a lack of familiarity at that age group.

Higher income individuals however do have a strong New Zealand makes high quality wines appreciation for NZ wines, suggesting a good fit with this demographic.

34 SECTION 4 QUALITY, INDULGENCE AND INNOVATION

Indulgence by demographic Consumers are looking to treat themselves, regardless of income.

More consumers plan to treat themselves more after the I plan to treat myself on something special COVID-19 disruption compared to those who say who don’t, this is consistent across demographics.

This is the least true for older generations.

What's interesting is that there is no difference in terms of income between those who are willing to treat themselves. Regardless of income consumers are wanting to do things that are nice for themselves. The types of treats will likely be different amongst these groups though.

35 SECTION 4 QUALITY, INDULGENCE AND INNOVATION

Innovation Drive purposeful innovation

Innovative products aren’t one of the key things that consumers are explicitly looking for in the future. Only between 20-30% of respondents in these markets agree that they want to buy Innovative products more in the future. This is highest in Singapore (30%) and lowest in the UK (20%).

Something to consider: How can companies drive innovation purposely, rather than a generic label?

Products from NZ are seen as reasonably innovative with between 50%-64% agreeing that NZ is an Innovative country. This is roughly in line with other positive attributes around NZ.

36 SECTION 4 QUALITY, INDULGENCE AND INNOVATION

Innovation by demographic Higher income, males and younger generation more likely to look for innovation. I plan to buy Innovative products Although consumers are not seeking out innovation as much compared to other things. There are demographics more likely to look for this than others.

36% of young males aged 18-34 planned to buy more innovate products post COVID-19, this is compared to only 14% who say they will do it less. Only 16% of consumers aged 55+ said they were planning to buy more innovative products post COVID-19 disruption.

Respondents with higher incomes responded that they were more likely to purchase innovative products compared to those with low income

37 SECTION 5

The shift to online

38 SECTION 5

Changing channels Online in demand, even if reluctantly

In Singapore (64%) and the US (60%), over half of the country have shopped online in the past 30 days. In the UK (50%) exactly half have and almost half (46%) of Australians have. Most consumers have also bought something in the physical world (89%-94%).

This is likely to vary by demographic across the markets but indicates a significant demand for products online right now. Getting products online, particularly specialised products allows companies to get their products directly to consumers. This also provides companies a chance to be closer to their customers than ever before.

39 SECTION 5

Channels Online uptake high in most markets and across all demographics

Almost 90% of all consumers have still gone into grocery stores in the last 30 days. Although an expected shift of online Purchased on a companies website services uptake, the majority of respondents still have shopped in stores. Over half of all respondents have shopped online in the last 30days. Australian respondents were the lowest with 46% shopping online.

Income also plays a difference if consumers have purchased Purchased on a big E-commerce channel e.g. amazon through a companies website. 40% of consumers with a higher income have purchased online thorough a companies website compared to only 22% of those with a lower income in the last 30 days.

40 SECTION 5 The shift to online

The shift to online Online consumer behaviour likely to stick after COVID-19.

Using online channels is more of a reluctant uptake in Australia – with only 31% agreeing they prefer to shop online and 37% disagreeing. Other markets, particularly Singapore (44%) and the US (44%) are far happier buying online and many even wish there was more they could buy online (64% in Singapore, 45% in the US).

Something to consider: Consumers don’t always love the online experience right now, how can companies change this to better meet people’s needs?

Other markets could now be in the position to see these trends mature. Consumers also generally expect to buy more online in the future than in the past, even in the more reluctant online markets such as the UK (28% expect to shop more online, 14% less) or Australia (31% more, 15% less). Singapore in particularly expect to buy a lot more online in the future (47% more vs 11% less).

Some things to consider: Getting products online, particularly specialised products allows companies to get their products directly to consumers. This also provides companies a chance to be closer to their customers than ever before. For companies, getting products online now is a good way to prepare as the retail environment changes. In China, after the SARS outbreak saw huge uptake of online deliveries which built habits that have stuck over time.

41 SECTION 5 The shift to online

Age Older demographic expects more online purchasing even if not preferred.

Older demographic – Respondents show there may be an I expect to shop online acceptance by the older generation that they will have to move some shopping to be done online. More consumers aged 55+ mention that they don’t prefer to purchase online and would rather go instore. This age group also expects to shop more online after the COVID-19 disruption. This means that this generation expects a shift in their behaviour even though this isn’t their preference.

I wish there were more products that were available online Younger generation - Younger consumers prefer to do online shopping and expect to do more post COVID-19 disruption. More than half on the younger generation aged 18-34 (56%) wish that were more products to purchase online. Only 15% of respondent in this age don’t prefer to purchase products online. 12% of this age group have also purchased from Facebook or Instagram in the last 30days. This is compared to only 2% of the older generation aged 55+. Companies are looking at different I prefer to buy online ways to service the needs of their consumers and there is a possible shift towards using social media as a means to this.

42 SECTION 5 The shift to online

Online channel Higher income consumers expect and prefer do more online shopping.

Higher income consumers currently prefer to shop online and I expect to shop online even wish there were more products available to buy online than lower incomes. The higher income groups also expect to shop online more in the future than in the past. Getting products online is particularly important for companies that are targeting these higher income consumers.

I prefer to shop online

I wish there were more products that were available online

43 SECTION 6

Country and demographic takeaways

44 Key Takeaways Income

Main differences between income groups

Unsurprisingly consumers with a higher level of income tend to prefer buying products with the following characteristics more than people with a 1 lower level of income : scientifically tested, natural, organic after the pandemic.

High income consumers also expect to prioritise in bigger proportions healthy foods and beverages, shelf stable, natural or organic. And while they 2 intend to eat out and get takeaways more than the other groups after the pandemic, they also plan on cooking more in larger proportions than consumers with a lower level of income.

63% of high income households are buying more than normal amounts of shelf-stable products. But when asked about their future intent to buy shelf 3 stable products they saw the biggest percentage point difference dropping to just 41% (22% point drop). Which suggests that higher income household’s interest in these products is most likely temporary.

High income households are most likely to prioritise the safety of products more in the future while at the same time they trust the safety of NZ products 4 more. This indicate an opportunity for NZ companies to trade off this strength, emphasising the safety of their products in order to better meet the needs of higher income individuals.

Channels are impacted by the level of income. 46% of the high income group prefer to shop online (vs 38% for medium and lower) and 28% of the 5 lower incomes expect to shop more online (vs 39% and 38% for high and medium incomes).

Consumers with lower level of income are less likely to trust products from New Zealand, even though trust remains relatively high across all 6 demographics (57% to 75%). Lower income respondents are also less likely to pay attention to the safety of the products they purchase.

45 Key Takeaways Age groups

Main differences between generations

The older generation (55+) is less likely to change their consumption habits than younger generations. Even though they are the most concerned in 1 terms of health, they are less likely to prioritise healthy foods and drinks after the covid-19 crisis than the other age groups (18 to 34 and 35 to 54).

55+ are the most likely group to prefer products from their own country, however they are also the group to trust products from NZ the most indicating 2 this preference towards local isn’t necessarily as impactful on NZ products for this age group as it might be for some other countries products.

Younger generations are more likely to prefer online products than older generations. Similarly, the younger the higher the intent to eat more natural 3 and organic products.

The 18-34 age group expect to prioritise healthy food and drink products after the pandemic more than the other age groups. 32% of them also intend 4 to eat out more or get takeaways more after the pandemic which is also higher than the other generations. Interestingly half of them plan on cooking more, which is higher than the 55+ generation.

The younger, the more likely consumers are to prefer shopping online, or to expect shopping online more in the future. However, 32% of 55+ wish 5 there were more products available online in the future, and 26% of them expect to shop online more as well (vs 13% less)

46 Key Takeaways USA focus

Trust towards New Zealand products is much lower in the United States than it is in other countries. 25% of American consumers don’t even know New 1 Zealand products, which is much higher than other markets (4%-13%). Americans leaving in the Western part of the country are more likely to trust New Zealand products (60%) than the rest of the country (46%)

The safety of NZ products is seen as very high in the other markets, but much less so in the US (49%). Respondents in the US did tend to rate NZ 2 lower on most attributes than the other markets.

Less consumers have a preference for natural products in the US and in the UK (58%) than in other markets (66%-75%) but converting consumers in 3 search of natural products into organic consumers seems more likely in the United States than in other markets. Consumer groups with a medium to high level of income, and consumers aged 18 to 54 are more likely to rate natural and organic products from New Zealand. The US (44%) are far happier buying online than Australia and the UK and many even wish there was more they could buy online (45% in the US). 4 Only a third of the respondents from the North East prefer buying products online, which differs from the South (46%).

47 Key Takeaways United Kingdom Focus

The UK has a reasonable opinion of New Zealand products considering the distance between markets (66%), but this wasn’t quite as high as 1 Singapore or Australia (75% and 77%)

The safety of New Zealand products is rated quite high in the United Kingdom (70%), even though slightly lower than in Australia (77%) and Singapore 2 (81%).

The UK were the least likely to think they would be cooking more in the future, however they do expect to be eating out or getting takeaways less than 3 in the past. British respondents are also less likely to prefer organic products (34%) than Singapore (47%) or the United States (44%).

Half of British consumers say they have purchased online over the past 30 days, which is lower than in the US or Singapore (60%; 64%). Consumers 4 also generally expect to buy more online in the future than in the past, even in the UK (28% expect to shop more online, 14% less)

48 Key Takeaways Australia Focus

Australia has high trust for NZ products, NZ was the second most trusted place (after Australia itself). 1

Australians were the most reluctant to be online, this could be because more things are still open. Although Australians expect to do more shopping 2 online in the future, more prefer not to with only 31% agreeing they prefer to shop online and 37% disagreeing

Australians were most preferable towards products from their own country rather than international products. Compared to other countries Australians 3 were more likely to select products from their own country. Buying local was important for Australian consumers.

Australians rated New Zealand products highly. The majority of Australians thought NZ had quality products (74%) were safe (77%) and that NZ was 4 an environmentally friendly country (69%)

49 Key Takeaways Singapore Focus

Singapore is a country that imports a lot of their food, because of this they are much more open to international products (particularly) from NZ more 1 than other markets.

Singapore rated New Zealand higher than other countries on a number of attributes including safety, quality, natural, organic and environmentally 2 friendly measures. Indicating a strong opinion of products from New Zealand in the market.

Singapore (60%) is the market with the highest proportion of the population keen to prioritise healthy food and drink post pandemic. 55% of 3 Singaporeans think they’ll cook more themselves than they did in the past (higher than in other countries). At the same time, slightly more people expect to eat out or get takeaways more (35% more vs 30% less) in Singapore.

Singaporeans were most likely to be buying products online, preferring to shop online and even want there to be more things they can buy online. 4

50 New Zealand Trade and Enterprise (NZTE) is the Government agency Te Taurapa is the stern post of a traditional Māori waka, which records charged with a single purpose: growing companies internationally, bigger, valuable knowledge, and stabilises and guides the craft forward. better and faster, for the good of New Zealand. Tūhono represents connections to people and an ability to build relationships. We employ 600 people, have over 200 private sector partners and draw on a global network of thousands more. We provide customised services and support to ambitious businesses looking to go global. We help them build their capability, boost their We have people based in 50 offices, working across 24 time zones and 40 global reach, connect to other businesses and invest in their growth. languages to support New Zealand businesses in over 100 countries. We also connect international investors with opportunities in New Zealand through a global network of investment advisors. Our global presence lets us deliver value to the businesses we support, through our unique know-how (knowledge and experience) and know-who We call on our Government network and work closely with our NZ Inc (networks and connections). partners and the business community, to grow our national brand and help businesses to open doors in global markets. Our know-how and know-who is expressed in our Māori name: Te Taurapa Tūhono. nzte.govt.nz

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