ANN ARBOR (WWJ) — Customer satisfaction with food manufacturers slips for the first time in three years, according to a report released today by the American Customer Satisfaction Index. For most other household nondurables — including soft drinks, beer, cleaning products, athletic shoes and apparel — customer satisfaction remains high and stable.
The ACSI was founded at the University of Michigan’s Ross School of Business and is produced by Ann Arbor-based ACSI LLC.READ MORE: Biden Offers Logistics Support To Ease Baby Formula Shortage
Rising prices are partly to blame as customer satisfaction with food manufacturers falls 2.4 percent to an ACSI score of 81 on the index’s zero to 100 scale. Smaller manufacturers and store brands are down 2 percent to 80, shouldering most of the loss.
Perennial leader Heinz remains on top despite slipping 2 percent to 87 — but for first time in more than a decade, Heinz shares the lead with General Mills (up 5 percent) and Quaker (up 1 percent). Kraft showed the most improvement, advancing 6 percent to 86 and surpassing Campbell Soup (84) and ConAgra (83), while Hershey (up 1 percent to 86) inches ahead of both Mars (84) and Nestle (83).
Customer satisfaction with soft drinks is unchanged at 84, despite weakened demand for carbonated beverages. Soda consumption continues to decline as consumers increasingly turn to energy drinks, tea and bottled water, forcing beverage makers to focus on new and different products.
Despite a 1 percent dip, Dr Pepper Snapple still beats both Coca-Cola and PepsiCo in customer satisfaction with an ACSI score of 86. However, PepsiCo is the only major soft drink producer to improve customer satisfaction this year, breaking its three-year tie with Coca-Cola by edging up 1 percent to 85. Coca-Cola is stable at 84. The cola rivals have remained within two ACSI points of each other for nearly 20 years.
“While soda consumption isn’t likely to evaporate, soft drink manufacturers are certainly on the right track adding ‘healthier’ beverages like sport drinks and bottled water to their brands,” said ACSI director David VanAmburg. “If soft drink makers are going to continue to enjoy high levels of customer satisfaction, it will be critical that they adapt to changing consumer preferences. In the bottled water segment, Coca-Cola’s Dasani and PepsiCo’s Aquafina brands already dominate the U.S. market.”
Customer satisfaction with breweries was flat at an ACSI score of 81, with very little differentiation between the largest brands. MillerCoors improveed slightly (up 1 percent to 82), taking the lead over Anheuser-Busch InBev (81). Athletic shoes were the only nondurables category to improve customer satisfaction this year, gaining 1.3 percent to 81. Smaller brands, including Sketchers and New Balance, led the industry, climbing 4 percent to an aggregate score of 83.READ MORE: Police: 4 Youths Pulled From Lake Michigan At Warren Dunes State Park
Adidas rebounded 4 percent to 80 after a drop a year ago, but the improved customer satisfaction may be indicative of simply losing the most dissatisfied customers. Adidas’ Reebok line of toning shoes was not well received, and according to customers quality and durability fell short. By contrast, Nike slipped 3 percent to 78, even as it gains market share — the broader and the more diverse the customer base, the more difficult it becomes to appeal to all.
“While it is not certain that customer satisfaction on the average is up because Adidas has lost dissatisfied customers and that Nike’s ACSI is down because it has an influx of new customers to serve, it is a phenomenon that we have seen in the past,” said Claes Fornell, ACSI founder and chairman. “In the extreme, if a company got rid of all but one of its customers and served that customer really well, it would have a high customer satisfaction score but no market. That is, one should always check if defecting customers might be a reason for rising averages in customer satisfaction.”
Following two years of price-driven declines, customer satisfaction with apparel stabilizes at an ACSI score of 79, a fifteen-year low for the industry. Levi Strauss led (82) the category, followed closely by V.F. (down 1 percent) and Hanesbrands (up 3 percent) at 81. Jones Group took the top spot last year, but now reverses course, falling 2 percent to 80. According to customers, price markdowns are not enough to offset lower quality, and the aggregate of smaller companies, including store brands, trails the rest of the industry at 78.
Personal care and cleaning products maintained a high ACSI score of 83. Manufacturers of shampoo, soap, toothpaste, detergents, and cleaning products consistently rank among the highest scoring companies in ACSI. Clorox, Unilever and Colgate-Palmolive tied for the lead at 85, just ahead of Dial and Procter & Gamble at 84. Like food and beverages, the largest companies outperformed the industry average, while the aggregate of store brands and smaller manufacturers scored slightly below at 82.
The full report is available for free download at http://www.theACSI.org.
The American Customer Satisfaction Index (ACSI) is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United States. The ACSI uses data from interviews with roughly 70,000 customers annually as inputs to an econometric model for analyzing customer satisfaction with more than 230 companies in 43 industries and 10 economic sectors, as well as over 100 services, programs, and websites of federal government agencies.MORE NEWS: Michigan Officials Coordinate Statewide Response To Baby Formula Shortage
ACSI results are released on a monthly basis, with all measures reported on scale of 0 to 100. ACSI data have proven to be strongly related to a number of essential indicators of micro and macroeconomic performance. For example, firms with higher levels of customer satisfaction tend to have higher earnings and stock returns relative to competitors. Stock portfolios based on companies that show strong performance in ACSI deliver excess returns in up markets as well as down markets. And, at the macro level, customer satisfaction has been shown to be predictive of both consumer spending and GDP growth.