The Marmite effect

People are creatures of habit. A new study by economists from the universities of Tilburg and Chicago* tracks the consumption patterns of American households over two years and finds striking evidence that such loyalty is widespread, deep and long-lasting. People are extremely loyal to the brands of their youth. The implications of this finding could be that more advertising does not help in switching people to other brands. And the benefits of being the first brand into a market could last longer than might be assumed.^

Markets that cater to migrants, whether from a different part of the country or from far-flung corners of the globe, are not just great for gourmands. They are also testament to the fact that people often retain very strong preferences for the kinds of food they grew up eating. Just ask the expatriate Britons who flock to “Tea and Sympathy” in New York’s Greenwich Village for pots of Marmite, a yeast-based spread whose delights baffle other nationalities (and many of their own compatriots). Such nostalgia is the most obvious example of the influence exerted by loyalty to the brands of your youth.

The new study finds a clever way to test this idea. The researchers had data on the purchases of 238 kinds of packaged goods by 38,000 American families between 2006 and 2008. For each of the goods in question, the data allowed them to calculate the share of the most-preferred brand as a fraction of the purchases of the two leading brands. Different regions showed a lot of variation: there were clear local patterns in consumption, although the same brands were available everywhere.

But 16% of people studied were migrants: they had grown up in one state and moved to another. They had the same options, in terms of what was on offer and at what price, as everyone else in their adopted home. But although they consumed more local favourites than someone in their native state would have, they bought fewer local hits (and more of the favourites from back home) than a longtime resident. And this gap between the purchases of migrants and that of the locally born was quite stubborn: although it faded the longer a person lived in their new state, it still took 20 years to halve in magnitude. Even 50 years on, it was still large enough to show up in the data.

Past research has shown that people are often willing to pay much more for a favoured brand than for seemingly identical alternatives. It is not always obvious why. For instance, people routinely express a strong liking for a brand that they are unable to tell apart from rivals in blind tests. And many studies have found that advertising alone cannot explain the strength of brand loyalty. So it seems plausible that a person’s past may play a role. Someone who spent their formative years in The Netherlands, may always hanker for Calve Pindakaas, a local Dutch peanut butter.

Article economist