#34: What Drives Our Food Purchases?

Most us have probably overspent at the grocery store or spent weeks eating things we knew were unhealthy - what subconscious secrets drive our relationship with food?

Why are humans the way that we are? Welcome to the 34th edition of the Marketing Mind Meld, a dive deeper into new curiosities about marketing and human behavior that help to answer that exact question 💭 🧠

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What Drives Our Food Purchases?

It all starts with an innocent trip to Trader Joe’s.

You just need bread, milk, and dish soap. 

In the blink of an eye, you escape into a vortex of impulse and suddenly you’re in the checkout line with $200 worth of things you never asked for.

That variety of cheese you’ll rarely eat. That sauce you’'ll try once to say you’ve tried it. That one random item in the checkout line that casually seduced you as you were waiting for the person ahead to wrap up. It has the word cacao on it - could it be different than regular chocolate?You must know.

You might be a mess - but you’re far from the only one who has fallen into the trap of grocery store overspending.

In a survey from LendingTree, 30% of respondents said they “almost always” overspend at the grocery store, with an added increase of $100 per month during the pandemic.

While you might be surprised, grocery stores aren’t.

In fact, lots of levers exist within grocery store layouts purely to drive your overspending.

Consider the following:

  • Essential items like bread and milk are stored in the back of the store -if you want to get your essential items, it almost always requires you to walk through one or two aisles

  • Baked goods, produce, the deli, and flowers are all located at the front of the store to introduce associations with freshness. There is no reason that the muffins next to the deli can’t be fresh - but all of you sudden, if you notice them right after the stimuli hits you, it doesn’t matter

  • Lots of items are priced at exactly 99 cents - this is actually called the left-digit effect, where humans are more likely to only register the number to the left of the decimal. $5.99 feels more like $5 than it does $6, right?

This is on top of the infamous candies and magazines we’re familiar with at the checkout line as well as the prominent tasting samples that reel us in.

Perhaps the most intense is the shelf layout strategy for stores.

Brands often covet something called the bulls eye zone, the second and third shelves, to match your line of sight. This is traditionally where we see higher-priced items, with regional brands closer to the top. If you’re in a rush, you’re not tempted to look up or down. Disaster.

While I do think the marketing tricks used by grocery stores are fun to know, these do open up a larger conversation about humans and our relationship with food.

There used to be a few thousand items in a grocery store as late as the 1990s - now grocery stores carry more than 40,000 items. Brands have popped up, proliferated and opened up widely new categories. Ecommerce has been a forcing function for everything from upstart brands to some of the biggest names in the world, like J.M. Smucker and PepsisCo. We’ve never had so many options - both beneficial ones and harmful ones.

It’s brought up a question I’ve been sitting with for a few weeks: What motivates people to buy the food they buy?

Is it as simple as grocery store layouts and marketing? What role does psychology play in all of this? Moreover, as we move further from grocery stories into e-commerce, are we privy to the same traps?

Welcome to a fun deep dive into an area that we likely engage with every day: the psychology of food purchases.

How much does the average person know about the food they eat?

To consider our purchasing motivations, it helps to start with a simpler question: Are all of our purchases educated purchases?

If you ask most people, they would be remiss to say no. Why would anyone admit they’re putting things in their body they don’t fully know? I would honestly say the same, even after years of eating Taco Bell.

A survey by by Food Literacy and Engagement Poll revealed some startling information from the sample: Nearly halfof respondents say they never or rarely seek information about where their food was grown or how it was produced. Moreover, 46% of the sample said they either don’t know whether they consume GMOs or believe they rarely or never do

It reminds me of a fun video from Jimmy Kimmel a while back where a reporter asked strangers on the street a simple question: What does GMO stand for?

Strangely enough, most people had a strong aversion to GMOs… but most had no idea what the letters even stood for.

Now the point is not to dunk on Americans - I admit as much that I fall into this same trap on many occasions. We do face the exhausting task of sifting through lots of noise for reliable and often competing sources of information. Google doesn’t make it any easier.

Do a quick test. Take your favorite food and do a quick Google Search for “Why X is healthy for you” - you might find that someone has already done the legwork to confirm your bias!

This goes for any food. You can find sources that say pizza or even cake is healthy for you. It causes us to label anything we eat with a sense of optimism.

This largely stems from the Optimistic Bias, often known as unrealistic optimism. It’s a cognitive bias that causes us to believe that we are less likely to experience negative repercussions from most things we do.Most of us believe our diets are adequately healthy - god forbid anyone tell us Taco Bell is a bad life choice!

The Optimistic Bias is helpful for things we’ve tried for years - but what about new things?

We happen to have an irrational habit there too, known as the Health Halo Effect. 

By definition, it’s the idea that a particular food is good for you, even if there is little to no evidence to confirm its true. This comes as a result of strong marketing, brands employing the right buzzwords to close you. Natural. Gluten-free. Low-fat. Keto. Low cholesterol.

This often extends to brand associations as well. Mcdonalds is traditionally considered less healthy than Subway, but researchers found people buying from Subway were less accurate at estimating calories, underestimating their intake by an average of 151 calories.

Functional magnetic resonance imaging (fMRI) has also been a prominent vehicle in the space of understanding food psychology.

fMRI looks at activations within the brain to compare what people say vs. how their brain reacts.

One such study at the University of Munich looked at exploring an interesting gap: they found that while four of five consumers were willing to pay more for organic food, the market share still remains small. (The share of the market for organic food at the time was only 2.9% in all of Europe.)

In this study, respondents were given the same descriptions of the food, with one group saying it was associated with a popular brand (i.e. a Mcdonalds) and the other given the same description with no brand association.

The result was that neural data can indicate popular brands elicit a reward activation regardless of what type of food is labeled by this brand.

In essence, if you saw two plates of the same food and one of them was randomly labeled Mcdonalds, your brain will go with that one. Regardless of the actual difference in the health between the two.

The group found that brand not only plays a role in choosing healthy food, but it often overrides our desire for healthy food if our favorite brands come out with unhealthy food. This largely matches the somatic marker hypothesis: emotional associations with brands can often make us support them without any further questions. 

It can make us skip even simple things - like reading nutritional labels.

Luckily, I think there is more energy than ever in today's world of regular internet shaming (courtesy of Jimmy Kimmel) to start better understanding our food - but there is another macro-shift I think will play a huge role in coming years: The rise of e-commerce.

What Role Does E-Commerce Play Here?

I won’t go too much into why e-commerce is on the rise. We know digital natives are increasing in numbers, platforms have grown to accomodate digital retail, and half the country is at home. The transition to e-commerce and DTC (direct to consumer) models for food has become a quick imperative.

But there’s also another element that favors DTC: we’re tired of not knowing. Much of the research above was done in the past couple decades but we’ve since seen a shift in consumer values. We want to be more educated about aspects of food that we eat. We want to better understand food additives and natural ingredients. We care about food safety. 

Our growing frustration is the perfect storm for many DTC brands, who understand the value of the ambitious health zeitgeist and capitalize on what larger brands can’t do as effectively: a story and a meticulous investment into product quality.

Take Immi for example, a healthy ramen brand started by Kevin Lee and Kevin Chanthasiriphan, designed to add a healthier alternative to traditionally carb-heavy ramen. Immi uses this powerful graphic on their site to communicate their health benefits, very easily exposing ways in which it's healthier.

One of my favorite shifting narratives is in the world of cereal.

Andrea Hernández, who writes the Snaxshot newsletter all about food and beverage trends, wrote a piece back in November unpacking the factors that have opened the door for new upstart cereal brands to challenge an institutionally untouched sub-sector of breakfast foods.

She cites cereals like Magic Spoon, Off Limits, and Three Wishes as brands that have risen in the cereal world for focus on reducing sugar, using ingredients like chickpeas, and maintaining the same taste as an empty carb snack.

But Andrea goes one step further: she talks about how they have encouraged the “snackification” of cereal to remove it from the confines of a breakfast food and allow you to eat it at any time. She also talks about the aesthetics, how Magic Spoon in particular became a favorite because of its colorful Instagram.

Many of these brands are able to circumvent our instinctive skimming on nutrition labels simply by providing the most important information up front.

But what’s interesting with all these DTC brands is another element: that all of them have a story. The story involves some tension - the founders getting frustrated by the existence of a certain paradigm in the world of food and choosing to shatter it. I talked in my Superbowl piece about how some of the best Superbowl Ads contain some level of useful tension that people can relate to emotionally - it’s doubling down on the same formula.

It’s hard in a homogenous part of the industry to win on a story. Are Froot Loops and Frosted Flakes going to argue that one of them had a more inspiring raison d'être? They’re selling largely indiscrete versions of the same product.

So what’s the downside? Well, DTC certainly has some of its own headwinds.

Nate Rosen, who works at a snack startup in the Bronx, talks about two in particular: the difficulty in nailing good manufacturing (prior to mass retail) and the consolidation of the industry. Unilever alone, for example, owns close to 400 brands in 190 countries, including many domestic brands you might use today.

There’s also the threat of copycats. Ana Santos talks about the insidious and often unforgiving nature of the food world, citing the dozens of homemade recipes for Mike’s Hot Honey as an example.

In addition, while e-commerce brands can compete on product quality, differentiation, aesthetics, and story - it’s hard to compete on price.

To serve a sophisticated market means serving sophisticated demands. It’s hard to do with cost containment. But it does mean that many of the people who could use it might be left out.

But there’s one final headwind: all institutional brands are starting to make similar moves online.

It’s an exciting prospect for consumers but it leaves us in a bit of a bind: Do we opt to go to a grocery store where we know price and bulk is available? Or do we aim to follow the DTC brand craze and sacrifice price knowing we’re getting transactional health in return?

Moreover, does it actually stop the psychological blinders that lead us to buy institutionally unhealthy food? Is the average person with optimism bias going to admit that the food they’ve been eating is trash? Is the average person with the Health Halo effect going to discern the difference between marketing on a food package vs. marketing online?

This seems like a problem that DTC alone can’t solve — but simple awareness can certainly help us push the needle.

Final Thoughts

I do believe that removing environmental traps (like grocery store layouts) can be helpful with overspending to a certain degree: we can’t get everything we need online. The places that have somewhat maneuvered online grocery (i.e Amazon Fresh) are hard to compete with on logistics.

But while I can only speculate so much without knowing the average person’s dietary needs and preferences, I do think there is one thing we’ve found anecdotally that is helpful: Stories.

I considered not writing this sentence because I still have PTSD from that terrible Game of Thrones finale - but in this case, it’s somewhat true.

We saw in the fMRI research that brand popularity and familiarity can often override choices we would otherwise make on health. We’ve seen stories like the ones from Immi and Magic Spoon inspire others. We even have a chance to see new brand identities at work.

Aja Singer, who writes the newsletter For The Love about DTC Brands, talks about the concept of bold identities when it comes to brands like Ugly Drinks, further stating that DTC has opened the door for brands to become more playful, and attract a new and vibrant consumer segment.

While the primary instinct here might just be to do more research and be vigilant about what it’s in your food, it takes a lot of unlearning. Jesse Tilner, who works as a growth consultant for CPG brands, likens it to smoking campaigns.

It took decades to solidify the narrative but people still smoke. The health and wellness movement is the same thing but with food. As more and more people begin to understand the importance and power of adaptogens, minerals, vitamins, etc., the more those products will become the norm, but you will always have people crushing candy and trans fats.

Consider something more simple: find a food you don’t love or something you want a healthier alternative for. Pause before you get it again. Find a small online retailer that can win you over with their brand story. If you can’t spend the money, share the story. Read newsletters like Andrea’s and Aja’s to understand the upcoming trends.

While I don’t work for a food brand, I’ve had the pleasure of connecting with many over the pandemic. Many of them have won me over. While I do think a level of social currency is at play, there is a comfort in generosity to your own body. 

You can’t have your cake and eat it too. But you can certainly have your cake and kick that shit right to the ground.

Do you love reading about different ways brands show up in our lives? If you liked this read, check out Brands Mean a Lot, written by Jared Holst, a once-a-week commentary on the ways branding impacts our lives. Check out his recent post - the first in a series entitled The Bullshit Economy. In it, Jared explores how bad economics and poor policy, rather than market necessity, has given rise to startups who offer home ownership to those who can’t afford it. It’s a fun read, subscribe here!

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