A lesson from nondurable products: Bigger isn’t always better

Let’s raise a glass to the makers of nondurable products. A toast is definitely in order.

According to our most recent Nondurable Products Report, customer satisfaction remains high for almost every industry in the sector, with four of the six industries in the category scoring among the top five industries measured by ACSI.

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Breweries lead the way with a score of 84 despite a slight 1.2% drop. Personal care and cleaning products are next at 83 (unchanged), followed by food manufacturing and soft drinks, each steady at 82.

Athletic shoes and apparel – the two industries that fell outside the top five – still fare well among customers, with the former steady at 79 and the latter dipping 2.5% to 77.

If history tells us anything, it’s that we shouldn’t be all that surprised by these marks; high customer satisfaction with nondurable industries isn’t unusual. However, what makes this year different than years past is how we got here. This year it wasn’t the big brands leading the way.

Craft beers continue to shine

While craft breweries aren’t growing like in past years, they continue to keep customers satisfied.

Craft beers made up 13% of the U.S. beer market as of 2018, and according to ACSI, the smaller breweries – brands like Heineken, Sam Adams, and other craft labels – lead the industry with a score of 85.

Smaller brands beat big beermakers like Anheuser-Busch InBev and Molson Coors in customer expectations, perceived value, and perceived quality.

Given these perceptions, it’s no wonder that 76% of beer drinkers said they’d pay more for their craft beer of choice.

That doesn’t mean large brewers are struggling. They’re doing especially well with light beers that fit consumers’ desire for healthier options. However, smaller beermakers are pursuing the same strategy.

Non-beer drinks like hard cider, hard tea, and hard seltzer are the most popular alcoholic beverages right now. Craft brewers are also making “better-for-you brews” that contain less alcohol. While bigger brands try to capitalize on what the consumer wants, the little guys are delivering it, attuned to customer preferences.

Big cleaners can’t keep their noses clean

Last year, Clorox set the bar for personal care and cleaning products. This year, not so much.

Clorox drops 4% to 82, as customers question the brand’s value and quality.

Other large brands like Henkel and Johnson & Johnson also falter, each plummeting 6% to the bottom of the category at 77. The latter two companies both dealt with well-publicized lawsuits over the past year.

Meanwhile, the group of smaller manufacturers climbs to the top of the category. The combined score of companies like Arm & Hammer, Sensodyne, Biotene, and store labels rises 1% to 85.

Questions of quality and value plague the big companies. That, along with customers’ growing push for organic products often delivered by smaller brands, and it’s easy to see how the smaller companies were able to sneak to the top of the field.

Small hit to Hershey helps ‘others’

All of the measured food manufacturers have ACSI scores of 80 or better. But there were changes among the individual brands – especially at the top of the leaderboard.

Hershey’s customer expectations and perceived quality were the highest in the entire category (the latter was a tie). Unfortunately, customer satisfaction took a hit.

2018’s industry leader falls 2% to 84, placing it in a tie for first place with PepsiCo’s Quaker (unchanged), and the group of smaller brands (up 1%).

That group – including Walmart’s Great Value and Kroger’s namesake label – were middle of the road in terms of customer expectations. Yet, per ACSI data, this group bests the other food manufacturers in quality, value, and customer loyalty, while tying Hershey and Campbell Soup for the lead in customer retention. Smaller companies are also competitive in their pricing.

Food manufacturers believe technology can help increase efficiencies, meet growing demand, and improve shelf life and food safety. They also seem to recognize that customers are paying attention to what they put in their bodies.

Healthier options, organic products, and “functional foods” are becoming more mainstream. Smaller companies and store brands are clearly giving the people what they want.

The message is clear

Not all big name brands are losing ground to their smaller competitors in the nondurable products market. Keurig Dr Pepper and PepsiCo tie the smaller companies at the top of the soft drinks category. Premier Brands Group leads the way in apparel, and Adidas and Nike both outpace the smaller shoemakers in the athletic shoe category.

But, the fact is, these are the outliers.

Nondurables are thriving as a whole, but it’s the smaller companies that are leaving the biggest impression. They’re better at connecting with consumers, delivering on quality, and offering greater value. These smaller groups of companies understand what’s important to their customers – healthier options, sustainability, the chance to support local businesses – and they’re winning because of it.

It’s true what they say: Bigger isn’t always better.

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