INTERNATIONAL CONSUMER SURVEY Impact of Covid-19 on positioning of New Zealand 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 Australia (446), This study was commissioned by New Limitations Singapore (444), United Kingdom (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.