• by Sarah Mahoney  @mahoney_sarah, September 18, 2007

Lead in toys. Data breaches. Tainted pet food. Mad cow. Global climate change. Pending debt implosion. No wonder consumers are a little jumpy these days. And while there's no evidence of consumer backlash on any single issue, new research from the Natural Marketing Institute suggests that, collectively, this new "fear factor" is affecting the way America shops, causing consumers to favor smaller, quirkier brands that seem "local" over soulless brand names from mass marketers.

"These aren't just personal and social fears, but planetary fears as well," says Linda Povey, NMI's vice president/strategic consulting. "Technology also plays a big role. Even the idea that cell phones contain a GPS tracking device, that there may be an RFID strip in your child's pajamas, or that a retailer may call to say your banking data has been stolen--it all adds up to a world that, on many levels, feels out of control."

So far, consumers seem to be reacting by taking greater pains to control some types of purchases, she says. "There's definitely a sense of circling the wagons, of consumers saying, 'Well, at least I can control this.'" The main beneficiaries so far, reports NMI, are foods and beverages that market themselves as safer, as well as organic and environmentally friendly products. Overall, NMI reports that 55% of consumers now agree that organic foods and beverages are safer for the environment, and 43% agree that they are safer to eat than non-organic foods.

But even more pronounced than an organic interest, she says, is the desire to buy foods with known origins. Americans are interested in knowing the pedigree of as many of their consumables as possible, she says. "So anything artisanal appeals to them, as do products associated with an individual, whether it's Paul Newman salad dressing or Francis Ford Coppola spaghetti sauce."

Because specialty food products are now easily available on the Internet, at local farmers' markets, and through retailers like Whole Foods, which often showcases lesser-known brands, it's much easier for consumers to experiment.

Marketers, of course, are still struggling to assess the power of goods made locally or at least in the U.S., compared with imported products. A recent Gallup Panel survey finds that 72% of Americans say they are now paying more attention to which country produces the products they buy. And the Center for Science in the Public Interest reports that 80% of Americans think "made in China" stands for "may be contaminated."

More troubling for marketers, however, is Gallup's finding that consumers blame U.S. businesses and safety inspectors, not the Chinese.

Marketers of smaller, more personal brands may strike consumers as being more trustworthy than those produced by faceless conglomerates, or inspected by government bureaucrats. "People are looking for smaller, arty brands--anything with reduced or simplified packaging, anything that looks rough-hewn or rustic," says Povey. "It says, 'We not only care about the quality of our products, but we're taking great care to be thoughtful and responsible in the way we get them to you.'"