ACSI uses random surveys of customers of companies and users of government services to score individual companies and their industries, and government agencies, on a 0-100 scale. Each of 45 industries (over 225 companies) within 10 economic sectors (plus government agencies) is measured annually, with several receiving their annual measures within each month, per a predetermined schedule (as with the non-durable manufacturing industries of food, pet food, apparel and athletic shoes, in this most recent month).
These scores are also used to compute a national, all-industries/agencies, rolling overall ACSI satisfaction score (also 1-100 scale) that is updated quarterly. The measured companies, industries, and sectors are broadly representative of the U.S. economy serving American households.
The new annual report including the food manufacturing industry shows food makers -- including 13 of the largest makers, plus "all other" -- with a current average score of 81. That is better than the simultaneously released all-industry/agency ACSI score for the third quarter, which was 75.9. However, 81 represented a decline of 2.4% from food makers' average of 83 in both 2009 and 2008.
For context, food makers' average score also dipped from 83 to 81 between 2006 and 2007. The industry's average for the baseline year used for most industries by ACSI (summer 1994) was 84; however, its average score fluctuated between 81 and 82 between 1997 and 2005.
Why the current dip? ACSI LLC, which produces the indices, also produces scores for the causes and consequences of customer satisfaction. Their conclusion: Rising food prices seem to be the main cause, but "some slippage in quality is also to blame," given that satisfaction scores declined for nine of the 13 largest food makers.
The specifics show H.J. Heinz Company leading the food pack for the eleventh consecutive year, although its year-over-year score declined 1%, to 88. In fact, because satisfaction scores declined more for some other companies, Heinz's "competitive position actually strengthened," notes ACSI.
Quaker and Hershey followed Heinz closely -- both down 1% to 86 -- with Sara Lee (unchanged) and Mars (-2%) next, each with scores of 85. Nestle came in at 84 (-1%). General Mills was unchanged at 83. ConAgra also scored 83 -- the result of a 6% "surge" that "nearly offset a steep drop in 2009" (from 84 to 78), reports ACSI.
Campbell Soup (unchanged) and Dole Food (-2%) each scored 82. Kraft Foods (-2%) and Kellogg (down nearly 5%) each scored 81 (the industry average).
Tyson foods showed the largest decline -- 6%, to a score of 77. According to ACSI, Tyson's customers "are complaining about quality, and a recall of deli meats probably hasn't helped, either."
"All other" food makers measured came in with a combined average score of 80 (down 2%).
While commodities cost increases have driven some makers in a number of categories, including cereals, baked goods and meats/poultry, to increase their prices, ACSI points out that "discounts on many frozen food lines and the introduction of new products" have created better value for money in many cases. At the same time, the report notes, lower prices have in some cases eaten into earnings (e.g., ConAgra's lowering of its profits forecast).
Importantly, the food manufacturing industry is far from alone in seeing some overall decline in customer satisfaction.
Among the four non-durable manufacturing industries covered in this new annual report, only apparel saw an improvement: up 1%, for an average industry score of 83. VF led apparel manufacturers (gaining nearly 5%, to score 85), while Liz Claiborne showed the largest decline (nearly 4%, for a score of 79).
The pet food industry's average score declined 1%, to 83. Del Monte showed the biggest gain (nearly 4%, to 83), while Iams showed the largest decline (nearly 6%, to 80).
Athletic shoes' average score was flat, at 80 -- as a 5% gain by Adidas (to 82) and 1% gain by Nike (to 80) offset a nearly 4% decline in the average "all others" score (to 80).
Further, the 75.7 overall/national ACSI index score for the third quarter represented a 0.3% decline.
Since the overall ACSI index has been shown over time to be a leading indicator of consumer spending, the third-quarter decline points to consumer spending for the fourth quarter likely not improving enough "to spur much economic growth," observed Claes Fornell, the Donald C. Cook Professor of Business Administration at the University of Michigan, founder of the ACSI and author of The Satisfied Customer.