Higher prices are negatively affecting customer satisfaction with a wide range of categories and makers of food, beverages, household products and other "nondurables," according to the 2014 report on these categories from the American Customer Satisfaction Index (ACSI).
ACSI annually surveys 70,000 consumers about the products and services they use most, then uses an econometric model to benchmark customer satisfaction for more than 230 companies across 43 industries, on a 100-point scale.
Although overall inflation in the U.S. has continued to be moderate — the Labor Department reported that last month, the Consumer Price Index was up 1.7% from a year ago — food prices, led by meat and dairy products, have risen 4.5% in the past six months, largely as a result of the drought in the Western states.
"By further limiting buying power, stagnating wages haven’t helped either," points out ACSI. "Rising prices also contribute to more consumers eschewing name brands for cheaper — and often less satisfying — alternatives."
Food Satisfaction Dips 2.5%
This year, the average score for grocery food across categories is 79 on ACSI's 100-point scale, down 2.5% versus a year ago.
Perennial food industry leader Heinz retained its top ranking among the largest food companies, and its score of 87, and #2 Hershey is also stable at 86. Mars and Nestle are up 1% and 2%, respectively, with scores of 85.
But 9 out of the 13 largest food makers saw dips in satisfaction. Kellogg saw the largest decline: down 5%, to 81 (from 85), to rank 12th. (ACSI notes that Kellogg's breakfast foods division sales also fell 5% last quarter, and that sales of breakfast cereal as a whole are down 5% since last year, as well.)
General Mills and Quaker are each down 2%, to scores of 85, and so tied in third position with Mars and Nestle. Kraft is down 2% to 84, and Campbell Soup and Dole are each down 1% to 83.
Meat prices have jumped nearly 13% during the past six months, and big meat products makers are near the bottom of the list. Hillshire Brands and ConAgra are down 2% and 1%, respectively, to 82. Tyson is down 1% to 79, the lowest score of the 13. (ACSI notes that Tyson, which has posted below-average customer satisfaction scores for a decade, recently completed its merger with Hillshire Brands.)
Smaller food companies, including store brands and minor brands that make up a large proportion of the industry, are down more than most of the big companies: -4% to an aggregate ACSI score of 77.
Soft Drinks -2.4%; Beer -2.5%
Soft drink sales are at their lowest level in nearly 20 years, and beer sales continue to drop.
Customer satisfaction with both categories is down by about the same amount compared to a year ago, but lower price points tend to keep soft drinks (82) at a higher ACSI score than beer (79), explains the report.
In the soft drink category, Coca-Cola and PepsiCo are down 2% and 1%, respectively, and tied for the lead at 83. Dr Pepper Snapple was at the top a year ago, but its score has dropped 5%, to 82. The aggregate of smaller beverage makers, including store brands, is down 2% and remains in last place at 80.
The average score for beer breweries as a whole is down 2.5%, to 79, paralleling the overall category's 2% sales decline in the last year. At the same time, the aggregate score for smaller brands is up 3%, to 82, paralleling craft beers' 17% sales increase.
Anheuser-Busch InBev and MillerCoors, diverge this year as Anheuser-Busch plunges 5% to 77.
Looking at the two giants, customer satisfaction with MillerCoors is down just 1%, to 81, but Anheuser-Busch InBev is down a significant 5%, to 77 (from 81).
Sales of many of the big brands at each company are down, although the picture is worse for A-B InBev. Among A-B’s three best-selling domestic brands, which account for 40% of the domestic market, sales are down for Bud Light (-1.1%) and Budweiser (-3.3%). MillerCoors's Coors Light is a bright spot (+1.8%).
Personal Care and Cleaning Products -1.2%
The aggregate ACSI score for shampoo, soap, toothpaste, detergents and cleaning products is down 1.2%, to 82.
However, this category is ranked second for high quality among all types of categories tracked by ACSI. Only the television and video player category ranks higher in customer satisfaction.
Clorox leads the personal care/cleaning products category, with a stable ACSI score of 85. All other large companies saw declines, although Colgate-Palmolive and Procter & Gamble are not far behind Clorox despite small drops to 83 and 82, respectively.
Dial and Unilever saw large drops: -4% to 81 and -6% to 80, putting them below the overall the category average of 82 and also below "all other" makers (also at 82). Unilever is in last place in the category.
The nondurables report, which also covers apparel (down 1.3% to 78) and athletic shoes (down 1.2% to 80) can be downloaded free from ACSI's site.