September 17, 2007
Hannaford’s Ratings System Drives Healthy Purchases
By Tom Ryan
Hannaford Brothers says its nutritional rating system has been a success, particularly in steering purchases in the expansive packaged-food section of the store, including cereals, soups and breads.
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| Hannaford Bros.’ Guiding Stars shelf labels point consumers to more nutritious product choices. |
The system called Guiding Stars rates the nutritional value of the grocery items in the store on a scale of zero to three stars, with three representing the healthiest products. The ratings are prominently displayed on shelf price tags.
After analyzing a year’s worth of sales data, the northeastern supermarket chain, which is owned by Delhaize Group, found that customers tended to buy leaner cuts of meat, according to The New York Times. Sales of ground beef with stars on their labels increased 7 percent, and sales of chicken that had a star rating rose 5 percent. Sales of ground beef with no stars dropped by five percent; sales of chicken with no stars declined three percent.
Similarly, sales of whole milk (no stars) declined by four percent, while sales of fat-free milk (three stars) increased one percent. Sales of fruits and vegetables, however, remained about the same as before the ratings were introduced. All fresh produce received stars.
Caren Epstein, a spokeswoman for Hannaford, said the grocer wasn’t surprised that the Guiding Stars system was most successful with packaged goods, since many of those products are packed with health claims.
“When you are looking at 100 different cereals, that’s where you need help,” she told the Times. “People already knew that fruits and vegetables are good for them. This isn’t exactly a news flash.”
The ratings were based on criteria established by Hannaford’s scientific panel, which includes nutrition experts from the University of North Carolina, Dartmouth School of Medicine, Tufts University, Food Nutrition & Policy Consultants, University of California at Davis, University of Southern Maine and Harvard University.
Hannaford’s formula used data from a product’s nutrition facts panel and the ingredients list, and credited a food for having vitamins and minerals, fiber and whole grains. The system took points away for trans fats, saturated fats, cholesterol, added sugars and added sodium. Twenty-eight percent of the 25,500 items in the store received one star or more.
“I have to say, I’m thrilled,” Lisa A. Sutherland, assistant professor of pediatrics and a nutrition scientist at Dartmouth Medical School, who helped devise the ratings system, told the Times. “They were pretty much what I would have expected with an objective system that wasn’t designed to promote or negate one food or another.”
“This is probably positive news,” said Kelly D. Brownell, director of the Rudd Center for Food Policy and Obesity at Yale, who wanted to see more data before reaching a conclusion. “I’m surprised that providing such little information would make a difference in consumer behavior, but I’m delighted that it does.”
Mr. Brownell noted that there is a long history of failure for nutrition education programs, in part because they compete in an environment “that provides massive inducement to eat unhealthy foods.” Such foods, he said, tend to be cheaper and more heavily marketed than healthier foods.
Discussion Questions: What do you make of the success of Hannaford’s Guiding Stars program, especially in driving sales of healthier options in meat, dairy and the overall packaged foods section? What are the lessons for others in Hannaford’s experience?
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Hats off to Hannaford and its brilliant marketing team. Right on target with the Baby Boomers, and securing more of their wallet content! Another means to give shoppers more value in shopping a Hannaford and Food Lion food store. Hmmmmmmmm
Simple. Clear. Intuitive. Purposeful. That’s the kind of clear-headed thinking corporate America needs more of. While Kelly Brownell of Yale was “surprised that providing such little information would make a difference in consumer behavior,” I’m sure not. That’s the way it works! After all, if it’s a simple idea it probably came from God.
Since Hannaford hasn’t disclosed the effect of Guiding Stars on total sales or profits or margins, it’s hard for other supermarkets to feel 100% justified in copying this program. Supermarket managements are exquisitely conscious of return on investment. How many firms would copy Hannaford if the overall effect on sales was minimal (or negative?) It’s great to sell more of the healthy foods, but what’s the profit impact if it’s largely substitution (or worse)?
What could this possibly hurt? I am curious if this is done by category or for all products equally. For instance, who is included in the soft drink section? Do they rate Coke vs. Pepsi or Coke vs. green tea? Anyone know?
The day for nutritional rating systems has come. Hannaford’s Guiding Stars program to drive sales of healthier products is in tune with the times and it appears to be a good combatant to “10 for $10” merchandising. With the profile this program is getting it will caused other retailers to adopt it.
Hannaford’s sales of healthier breakfast cereals are reportedly up 5%; lean ground beef, up 7% while fatter beef is down 5%; fat-free milk, up 1% while whole milk dropped 4%. Hannford reports that when given a choice between products with stars and ones without stars, customers consistently choose the stars. But looking at the minute examples above, the drop off in “fatter” foods appears greater than the gain in starred products. Does that bode well at the cash register? Will healthier products have to cost more to make up for any revenue difference in tradeoffs?
That presents the dilemma for food retailer of two conflicting goals. One is doing the right thing for people’s health. The second is doing the right thing for sales. May the “better man” win but we will have to wait to see which way the scales tilt. Let’s hope consumers will opt for healthier foods.
Years of research on a variety of topics from POP, to images on shelf tags/strips, to iconic messaging to inform the consumer about some topic have always suggested the power of communication at the shelf. Results for all of these are amazingly consistent on sales impact.
Some early indications of the power of this at-shelf vehicle in the health arena were reported in the American Journal of Public Health in the late 80s. The Four Heart program was run in three supermarkets. While sales results were not measured, awareness was and the results were substantial.
The hardest component in running such a program is the cataloging of current and dynamic product information. We work with a large and rapidly expanding group of retailers to support this and other needs, and we can tell you first hand, this is about to expand rapidly.
Customers are looking for healthier choices and with the current obesity problems in the U.S., it is now more important than ever that retailers offer healthier products. Guiding Stars is a great way to convey information to consumers quickly and efficiently. A customer’s biggest challenge when entering a store is finding products. Shelf talking is probably the best way to get products into a customers hand and adding nutritional information to that only enhances the customer’s shopping experience while steering the consumer to purchasing healthier alternatives.
Complicated. Unclear. Confusing. Purposeful (if the purpose is increasing sales of various items). My tip-off was learning that whole milk received no Hannaford stars. Anyone familiar with the nutritional benefits of whole milk knows that they vary by the age of the consumer. Various proteins and yes, FATS, in whole milk have been proven to be extremely beneficial to growing children. As we age, we eventually no longer need some of these ingredients, but who consumes the most milk?
Is it a good thing to encourage shoppers NOT to read labels, but instead to trust Hannaford’s “Nutrition For Dummies” program? The single incorrect example of whole milk receiving no Hannaford stars raises questions about the entire program. What appears to some to be “an easy, simple solution which solves a problem for Hannaford customers” is instead misleading because the nutritional benefits of food products simply resist simplification. Labels contain information helpful to a variety of age groups and consumers with various health concerns, which the Star program fails to address in sufficient detail. For the wide variety of shoppers with various nutritional needs, the Star system has to be incorrect (or incomplete) for many of them.
Almost no one has the time or the inclination to read the complete label on every grocery item they buy. And, the food pyramid requires a degree to understand.
This is an easy, simple solution which solves a problem for Hanaford customers–how to make smart choices quickly and easily.
It sure would be nice if someone stepped up to the plate to implement a system for all supermarket customers.
Kudos to Hannaford. I am not in a Hannaford marketing area so I don’t have much exposure to their methods, but it is critical that retailers convince consumers that they really have their best intentions in mind. What better way to prove customer concern than with a “brand agnostic” rating system that puts the customer ahead of slotting fees, brand advertising, and other non-nutritional incentives.
Maybe the retailer you visit is not merely a lowest-price decision. A consumer to whom nutrition is important can now get guidance on purchase decisions that is unavailable (patent pending) anywhere else.
This very simple and intuitive solution to help consumers distinguish “how healthy” was outlined in consumer trend data at least 18 months ago. (Iconoculture has had at least 2-3 articles on the consumer need for more simple solutions in labeling, one of the later articles featured the Hannaford labels as a good example of action taken at retail).
Hooray for Hanneford, they acted on what consumers said would help sort it out at the shelf. It’s working because it is exactly what consumers said they needed. And their creative execution of the icons is very nice as well.
We look at many trend articles as “unmet needs” that are starting to emerge in the broader marketplace. Acting on them early can give marketers a “jump” on competition!
While I really like the concept, and while it appears to be having an impact on purchase selections by their customers, one must contemplate the following.
The U.S. Government already requires health and nutrition labeling; it is consistent across all U.S. Grocers. I find this system, which provides “at a glance” data by which consumers will be activated to make a decision on what to, or not to buy potentially confusing. The rating system will likely not be adopted by all retailers and quite possibly will make way for competing grocers to come up with their own system of which may employ different criteria and evaluation methodology.
Secondly, unless this data is used by the retailer to adjust their assortments to react to customer purchasing trends, I am not too sure I see its value. If it is directed at trying to impact customers selections, thereby making a healthier customer, then they may be complemented. But as I said before, all of this is available to consumers in the nutritional labeling already on the product.
I am not convinced that this is going to win them new customers or make their existing customers more loyal, so it leaves me wondering “why are they doing it and what is its value?”
Guiding Stars is a great program for consumers looking for a simplistic education on product nutrition. Are Hannaford’s customers spending more and is the program driving new customers into stores as a result of this initiative? I’ve yet to see the results. Healthier products tend to cost more, so it would seem they are realizing a revenue increase in those cases. Another discussion point here is the value of the shelf talker display. In a time where people are making educated buying decisions as well as looking for healthier food options, this program is a good fit.
Wonderful stuff. Simplify the shopping process on something that over 50% of shoppers care about. Messaging that is functional in its information value, and self-expressive (I care about this and this store cares about it too.) I think this is just great.
Programs like this exist in many forms, including many offered by the CPGs (e.g., Pepsico Smart Spot program). The existence of different programs with different criteria actually can contribute to shopper confusion (or at least indifference), as has been said.
But the primary difference here is that this program does not seem to have a sponsor with any vested interest. Yes, Hannaford has something to gain, but as the results show, they also have something to lose. To me, that’s what gives this program credibility. It’s not designed in an obvious attempt to get shoppers to buy more, or to try to convince them that a product that is clearly not healthy has some health benefits. It’s simply designed to help the shopper make informed choices in confusing categories. That’s the stuff that loyalty is built on.
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Hats off to Hannaford and its brilliant marketing team. Right on target with the Baby Boomers, and securing more of their wallet content! Another means to give shoppers more value in shopping a Hannaford and Food Lion food store. Hmmmmmmmm
Simple. Clear. Intuitive. Purposeful. That’s the kind of clear-headed thinking corporate America needs more of. While Kelly Brownell of Yale was “surprised that providing such little information would make a difference in consumer behavior,” I’m sure not. That’s the way it works! After all, if it’s a simple idea it probably came from God.
Since Hannaford hasn’t disclosed the effect of Guiding Stars on total sales or profits or margins, it’s hard for other supermarkets to feel 100% justified in copying this program. Supermarket managements are exquisitely conscious of return on investment. How many firms would copy Hannaford if the overall effect on sales was minimal (or negative?) It’s great to sell more of the healthy foods, but what’s the profit impact if it’s largely substitution (or worse)?
What could this possibly hurt? I am curious if this is done by category or for all products equally. For instance, who is included in the soft drink section? Do they rate Coke vs. Pepsi or Coke vs. green tea? Anyone know?
The day for nutritional rating systems has come. Hannaford’s Guiding Stars program to drive sales of healthier products is in tune with the times and it appears to be a good combatant to “10 for $10” merchandising. With the profile this program is getting it will caused other retailers to adopt it.
Hannaford’s sales of healthier breakfast cereals are reportedly up 5%; lean ground beef, up 7% while fatter beef is down 5%; fat-free milk, up 1% while whole milk dropped 4%. Hannford reports that when given a choice between products with stars and ones without stars, customers consistently choose the stars. But looking at the minute examples above, the drop off in “fatter” foods appears greater than the gain in starred products. Does that bode well at the cash register? Will healthier products have to cost more to make up for any revenue difference in tradeoffs?
That presents the dilemma for food retailer of two conflicting goals. One is doing the right thing for people’s health. The second is doing the right thing for sales. May the “better man” win but we will have to wait to see which way the scales tilt. Let’s hope consumers will opt for healthier foods.
Years of research on a variety of topics from POP, to images on shelf tags/strips, to iconic messaging to inform the consumer about some topic have always suggested the power of communication at the shelf. Results for all of these are amazingly consistent on sales impact.
Some early indications of the power of this at-shelf vehicle in the health arena were reported in the American Journal of Public Health in the late 80s. The Four Heart program was run in three supermarkets. While sales results were not measured, awareness was and the results were substantial.
The hardest component in running such a program is the cataloging of current and dynamic product information. We work with a large and rapidly expanding group of retailers to support this and other needs, and we can tell you first hand, this is about to expand rapidly.
Customers are looking for healthier choices and with the current obesity problems in the U.S., it is now more important than ever that retailers offer healthier products. Guiding Stars is a great way to convey information to consumers quickly and efficiently. A customer’s biggest challenge when entering a store is finding products. Shelf talking is probably the best way to get products into a customers hand and adding nutritional information to that only enhances the customer’s shopping experience while steering the consumer to purchasing healthier alternatives.
Complicated. Unclear. Confusing. Purposeful (if the purpose is increasing sales of various items). My tip-off was learning that whole milk received no Hannaford stars. Anyone familiar with the nutritional benefits of whole milk knows that they vary by the age of the consumer. Various proteins and yes, FATS, in whole milk have been proven to be extremely beneficial to growing children. As we age, we eventually no longer need some of these ingredients, but who consumes the most milk?
Is it a good thing to encourage shoppers NOT to read labels, but instead to trust Hannaford’s “Nutrition For Dummies” program? The single incorrect example of whole milk receiving no Hannaford stars raises questions about the entire program. What appears to some to be “an easy, simple solution which solves a problem for Hannaford customers” is instead misleading because the nutritional benefits of food products simply resist simplification. Labels contain information helpful to a variety of age groups and consumers with various health concerns, which the Star program fails to address in sufficient detail. For the wide variety of shoppers with various nutritional needs, the Star system has to be incorrect (or incomplete) for many of them.
Almost no one has the time or the inclination to read the complete label on every grocery item they buy. And, the food pyramid requires a degree to understand.
This is an easy, simple solution which solves a problem for Hanaford customers–how to make smart choices quickly and easily.
It sure would be nice if someone stepped up to the plate to implement a system for all supermarket customers.
Kudos to Hannaford. I am not in a Hannaford marketing area so I don’t have much exposure to their methods, but it is critical that retailers convince consumers that they really have their best intentions in mind. What better way to prove customer concern than with a “brand agnostic” rating system that puts the customer ahead of slotting fees, brand advertising, and other non-nutritional incentives.
Maybe the retailer you visit is not merely a lowest-price decision. A consumer to whom nutrition is important can now get guidance on purchase decisions that is unavailable (patent pending) anywhere else.
This very simple and intuitive solution to help consumers distinguish “how healthy” was outlined in consumer trend data at least 18 months ago. (Iconoculture has had at least 2-3 articles on the consumer need for more simple solutions in labeling, one of the later articles featured the Hannaford labels as a good example of action taken at retail).
Hooray for Hanneford, they acted on what consumers said would help sort it out at the shelf. It’s working because it is exactly what consumers said they needed. And their creative execution of the icons is very nice as well.
We look at many trend articles as “unmet needs” that are starting to emerge in the broader marketplace. Acting on them early can give marketers a “jump” on competition!
While I really like the concept, and while it appears to be having an impact on purchase selections by their customers, one must contemplate the following.
The U.S. Government already requires health and nutrition labeling; it is consistent across all U.S. Grocers. I find this system, which provides “at a glance” data by which consumers will be activated to make a decision on what to, or not to buy potentially confusing. The rating system will likely not be adopted by all retailers and quite possibly will make way for competing grocers to come up with their own system of which may employ different criteria and evaluation methodology.
Secondly, unless this data is used by the retailer to adjust their assortments to react to customer purchasing trends, I am not too sure I see its value. If it is directed at trying to impact customers selections, thereby making a healthier customer, then they may be complemented. But as I said before, all of this is available to consumers in the nutritional labeling already on the product.
I am not convinced that this is going to win them new customers or make their existing customers more loyal, so it leaves me wondering “why are they doing it and what is its value?”
Guiding Stars is a great program for consumers looking for a simplistic education on product nutrition. Are Hannaford’s customers spending more and is the program driving new customers into stores as a result of this initiative? I’ve yet to see the results. Healthier products tend to cost more, so it would seem they are realizing a revenue increase in those cases. Another discussion point here is the value of the shelf talker display. In a time where people are making educated buying decisions as well as looking for healthier food options, this program is a good fit.
Wonderful stuff. Simplify the shopping process on something that over 50% of shoppers care about. Messaging that is functional in its information value, and self-expressive (I care about this and this store cares about it too.) I think this is just great.
Programs like this exist in many forms, including many offered by the CPGs (e.g., Pepsico Smart Spot program). The existence of different programs with different criteria actually can contribute to shopper confusion (or at least indifference), as has been said.
But the primary difference here is that this program does not seem to have a sponsor with any vested interest. Yes, Hannaford has something to gain, but as the results show, they also have something to lose. To me, that’s what gives this program credibility. It’s not designed in an obvious attempt to get shoppers to buy more, or to try to convince them that a product that is clearly not healthy has some health benefits. It’s simply designed to help the shopper make informed choices in confusing categories. That’s the stuff that loyalty is built on.