As our world slowly crawls out of pandemic hibernation, income inequality has emerged as a significant indicator of consumers’ ability to adopt healthy purchasing habits.
In the first two years of the pandemic, the impact of the virus left many jobless or in search of new employment – 60% of households in emerging markets and developing economies (EMDEs) experienced a loss of income in 2020 alone. As a result, many families are uncertain about how they can put food on the table, let alone eat healthier products that generally cost more than the average market product. AlixPartners’ annual Health and Wellness Study last year found that only 40% of low-income households are highly successful at achieving their health and wellness goals, compared to 53% in the higher income brackets.
More grimly, the World Bank predicts that a significant rise in inflation and income inequality could jeopardize economic recovery, particularly that of EMDEs. Inflation rates are at a 40-year high, even as supply chain bottlenecks continue to challenge global markets.
An uncertain employment outlook in the early days of the pandemic was one of the largest inhibitors of achieving health and wellness goals. But while the pandemic added to global inequalities and pushed 124 million people into poverty in 2020 alone, the lockdown experience also shed light on many on the benefits of adopting a healthier lifestyle with a focus on well-being.
The adoption of healthier lifestyles cannot be achieved when a large percentage of the global population does not have access to healthier, “better for you” foods and products, or has a hard time figuring out what is good or bad. To ‘democratize’ healthy products, grocery stores must put healthy foods at their business’s core, prioritize the promotion of the healthier elements of their assortment, and make their products accessible through more affordable price points.
Retailers must also prioritize their approach to bringing more innovative products to market. For many grocers and brands, innovation is often launched to drive premiumization and to be margin accretive. However, healthier product innovation that expands a category with affordable health and wellness offerings will attract new consumers who are more loyal, in turn boosting market share. It’s up to larger businesses to think of the bigger picture, consider healthy newcomers to the market and give them more options and incentives to make healthy decisions about their own health and wellness goals.
While past efforts from companies to lead consumers to healthier decision-making are commendable, they are not sufficient to reach today’s undecided and constrained consumers. Brands will need to catalyze consumers’ transition to healthier products by improving availability, developing better-tasting products, and closing the gap to category pricing norms. While price will always continue to be a barrier to consumers’ adoption of healthier foods, those retailers that don’t get into the game now miss out. Your consumers want it, and soon your competitors will be doing it.