What brands should be doing now to offset impending HFSS regulations

HFSS regulations

Much has been written about the HFSS legislations on foods and drink high in fat, sugar, and salt [HFSS] due to come into force in October 2022.

Effectively, HFSS legislations will stop all off-shelf features for products falling foul of the new regulations. Phase two could see an all-out ban on advertising.  According to Barclays analyst, James Anstead, the legislation “could lead to the most significant in-store changes in decades.”

The brands most affected will be those within impulse categories; brands that have always traded heavily on the fact that ‘you buy them when you see them.’ With visibility severely restricted, there is a real danger of significant sales declines.

How can brands mitigate this risk?

In my view, the answer must lie in marketers’ ability to change the triggers to purchase. If it is more difficult for a brand to be prominent ‘in the moment’, it must become more relevant ‘in my life.’

In other words, the dynamic needs to shift from consumption moments to relationship moments.

How can brands build relationship moments?

Whilst ecommerce will continue to represent a relatively small percentage of sales, it will be more critical than ever for brands to earn a place on shoppers’ ‘favourites’ list. This has always been prime real estate, but its value is now set to increase further. Every brand impacted by HFSS regulations should be working harder than ever with retailers to win their place on the list.

In parallel, an increased share of investment needs to be moved out of the store and into digital. To maintain visibility, brands will need to do more 1:1 marketing – and that means securing high-quality first-party data and leveraging it effectively. Brands will need to focus on identifying and making themselves present in the moments that matter to individual shoppers.

Routes to gaining this data will include partnerships – and possibly greater commitment to cause-related marketing. Both have the potential to do more than increase data inflows. They can elevate brand standing and help to build deeper, more meaningful relationships with shoppers and end-consumers alike.

Brands will also need to double down on creating owned commerce experiences. For some, that might mean accelerating their DTC efforts, for others, more social selling. Pop-up or permanent stores will become more strategically significant. And brands with the range and sufficiently compelling propositions should be talking with key retail partners now about the opportunity to open shop-in-shops.

But don’t give up on ‘in the moment’ moments

Many, if not all, brands are looking to create healthier variants that meet the new regulations. Reformulated products from Kellogg’s, Nestlé, Haribo and Hula Hoops have all featured online and on aisle ends.

Brands need to take the next step, working with retailers to reconfigure categories. There is the opportunity to bring major confectionery brands into traditionally ‘healthy’ aisles. This can be a win/win/win: greater vibrancy for the retailer; more desirable choices for the shopper and greater visibility for the brand. With real effort and focus from all major players, this could actually play to the category’s long-term advantage.

Retailers are already testing the water. For instance, Tesco stores in Leicester and Royston have rolled out “under 100 calories” bays. These promote high-protein offerings (including tinned beans and vegetables) and low-fat yoghurts. But they also feature low-sugar cereals. The number of these sections will only increase over time. Brands need to ensure they have the right product offerings to earn inclusion.

There’s a lot to learn from other restricted categories

This isn’t the first time categories have faced severe regulation. Look at alcohol or tobacco.

Recently, the Irish government introduced minimum unit pricing on alcohol sold in supermarkets, independents and off-licences to curb binge drinking. Additionally, supermarkets are now obliged to cordon off alcohol sections with barriers that must be at least 1.2 metres high.

The sector’s response has been to increase the priority it puts on building consumer relationships. Pricing has been made more transparent by reducing confusing promotions and bundle deals. Value has been reframed through premiumisation. More money is being invested into appropriate sponsorships and community activities. And the category is pushing the ‘with food’ angle hard to stress the importance of drinking the right quantity on the right occasions. 

Retailers and brands are working more closely together to ensure shoppers still visit the store with alcohol purchases in mind. As we get closer to the HFSS restrictions, that’s a learning that we all need to bear in mind.

Many of the brands that will be most heavily impacted by HFSS regulations have historically relied on front-of-store positioning, gondola ends and promotions. It made good sense: proximity and visibility are highly effective triggers in impulse categories.

But these strategies will have to change. Brand messaging and commerce will need to be connected more closely together. ‘In my life’ marketing must become at least as important as ‘in the moment’ marketing.

What do impending HFSS regulations mean for brands?

In the post-HFSS world, I believe that the brands most effective at driving purchase will be those that offer both ‘availability how I want it’ and experiences that build deeper relationships with individual shoppers and consumers.

Author: Michelle Whelan, UK CEO VMLY&R Commerce
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