Is your food company busy addressing rising Vegan, Vegetarian, DASH, Anti-Inflammatory, ABS or Paleo diet trends today? If not, why not? These are among today’s top-10 diet trends driving consumer food choices.
Although Internet and social media analysis techniques are still in their infancy, these “big data” bases should not ignored: they best reflect what consumers think and say about their food choices. Think of the Internet as a very large consumer survey population that can be sampled at-will, at very low cost and on a near-real time basis. Internet chatter analysis also reveals trends not easily discernable using conventional analysis techniques, such as retail product scanning, new product placement tracking and consumer surveys…in near-real time! There is the problem of information clutter, however: the Internet has a very low signal-to-noise ratio and it can often be difficult to discern between what is important or relevant and what is not. Also, Internet search engines are fickle and just finding the most applicable search terms can be challenging.
This post references work undertaken at BEST VANTAGE Inc. (www.bestvantageinc.com) to establish new tools for consumer trends analysis, drawing on techniques developed by the financial industry. Previous work undertaken on this challenge is referenced here and here. In this posting, we demonstrate how volatility analysis, using our VIC™ internet chatter volatility indices, can rapidly prioritize emergent trends not readily detectable using conventional market analysis tools. The earlier warned, the faster that companies can adapt to and capture the high ground of new consumer opportunities.
Why volatility? Volatility is a leading indicator of change. Whether in nature, societies, economies or financial markets, “volatility” marks rapid exchanges of material and information that signal impending change. Internet chatter surges or wanes as individuals adapt to new information and adjust their demands and expectations accordingly. Internet chatter volatility denotes activity and information exchange: it does not explain the underlying reasons for change, which requires a more forensic analysis of the Internet database. Thus, a surge in Internet chatter signals that change is pending and that a more in-depth analysis of the underlying reasons for volatility is likely warranted.
In the chart below, the VIC™ volatilities of the top 9 diet trends (out of 40 analyzed) are presented together. It is clear that, already in late-2009 (six years ago), interest in vegetarianism surged, followed by a surge in vegan diet-related chatter beginning in 2013. These are the markers that should have signaled to the processed food, foodservice and food ingredient companies to closely track these diet trends and adjust their product lines and strategic plans accordingly. This period (2009 – present) also exhibited very significant spikes in Internet chatter volatility pertaining to high-protein, low-carb Paleo and ABS diet-related Internet chatter.
A look at annualized growth trends in Internet chatter suggests how rapidly these four trends will remake our industry. Between 2013 and 2014 alone, BEST VANTAGE observed the following growth rates (i.e., velocity) in Internet chatter, presented along with 5-year annualized growth rates as benchmarks.
- Vegan Diet (1-yr: 590%; 5-yr Annualized Growth Rate: 89%)
- ABS Diet (1-yr: 315%; 5-yr Annualized Growth Rate: 115%)
- Paleo Diet (1-yr: 159%; 5-yr Annualized Growth Rate: 101%)
- Vegetarian Diet (1-yr: 152%; 5-yr Annualized Growth Rate: 85%)
Internet volatility and velocity analysis should not be used in place of conventional market tracking techniques. They do offer powerful early indicators of emergent trends, helping companies to know where to look and how to respond to the most volatile index of all, consumer behavior. In a future posting, I will explain the value of using Internet chatter volatility and velocity analyses as strategic decision-making tools.