CONSUMER INSIGHTS

The following data is provided by IRI COVID-19 Updates. Access reports, dashboards, and insights related to the COVID-19 pandemic by visiting the IRI COVID-19 Updates webpage.

May 18, 2020

May 4, 2020

May 18, 2020

MAY 27, 2020

June 8, 2020

Building Brands During Recessionary Times

  • Large brands have struggled to sustain growth in past recessions, but COVID-19 has changed the game with large, iconic brands acquiring both new & lapsed buyers—challenge is to maintain this new buyer loyalty.
  • 5 Strategies for Growth:

  • Consumer Spending Tracker
    • Consumers in the US continue to make large, pantry stocking trips, but trip frequency has also picked up—returning to small, frequent trips.
      • For the 4 weeks ending 4/19, trip frequency was down -4% vs. LY. For the latest 4 weeks ending 5/17, frequency is up +3%.
    • In New Zealand, CPG sales (including alcohol) through off premise channels began slowing down significantly during phase 2 of loosened restrictions.
    • Despite loosened restrictions, consumer spending patterns in the US remain mostly unchanged.
      • In fact, in states that opened earlier (Georgia, Texas, Florida), off premise alcohol sales growth is even higher for the 4 weeks ending 5/17 vs. the early stockpiling period.
  • On Premise Update
    • On premise velocity continues to improve across the U.S. to -39% in the latest week (+15% vs. the prior week).
    • Average check value now down only -21% vs. pre-COVID (improvement from -50% at its lowest).
    • States where indoor dining remains restricted have seen slower velocity improvements.
    • While only 8% of alcohol purchase during lockdown has been through takeout/delivery, 35% of consumers report ordering alcohol either directly from bars/restaurants or through a delivery app.
      • Interestingly, only 11% of those ordering alcohol for delivery have done so through an alcohol-specific delivery app (vs. 42% through a food delivery app & 63% directly from a bar/restaurant).
    • Just over 40% of consumers view restaurants as offering support to their communities during COVID-19, but only 12% perceive the same support from alcohol brands.
      • We should push our supplier partners on programs that benefit the community—48% of consumers state they’d like a brand more if they see that offers community support.
    • Only 3% of consumers claim they will not travel domestically for vacation now, with 13% saying they’ll travel domestically more (and 21% saying less).
    • As bars & restaurants reopen, 84% of consumers say they’ll spend the same or more on alcohol as the pre-COVID period.
      • Also, of note: those who are more likely to visit the on premise more as it reopens are also the most likely to spend more than usual there.
    • Assuming it is still legally allowed, 46% of consumers say they’ll order alcohol with takeout/delivery the same amount or more when COVID-19 passes.
    • Among categories consumers miss drinking in the on premise most, cocktails reign supreme with craft beer in the #2 spot. Only 5% miss drinking hard seltzers, but probably because they were so off premise skewed to begin with.
    • Of those that have missed an opportunity to celebrate an occasion during lockdown, 49% plan to reschedule the event or schedule an even bigger event for a future date.
    • The attached Reopening Map has a nice summary of the status of reopening by state & the restrictions that remain in place.

IRIData2

As a reminder, IRI has a public page with reports, dashboards, & insights related to the pandemic: IRI COVID-19 Updates.

MAY 27, 2020

Advancing in the Next Normal

  • COVID-19 represents the biggest shift for retail in decades—new needs will drive a fundamental change in the industry.
  • Six key implications that will impact consumers & the retail landscape in the “next normal”:
    1. Increased need for value: With economic uncertainty, consumers will be looking more closely at price, promotions, & value across all retailers (shopping around). Value will look different by household (e.g. budget-conscious will seek low pack pricing, while more affluent shoppers may seek value in larger pack sizes).
    2. Role of product innovation: Expect the rate of innovation to return to pre-COVID levels as suppliers look to maintain share through differentiation. Shoppers will be reluctant to spend time browsing aisles in-store though, so innovation must meet a clear need & be compelling to grab attention
    3. Evolution of range & space: Discretionary space accounts for more than 20% of promotional deals in-store. Expect a change in allocation of this space as retailers re-configure to meet new consumer needs (“meal for tonight” mission, high-demand household staples, bringing out-of-home experiences home, etc.).
    4. Channel shifting: Shoppers are no longer visiting more than one store in a trip. Transactions are down 50%, but items & spend per trip are up by more than 66%. Convenience stores will emerge as a main shopping destination due to, well, their convenience. And of course direct-to-consumer will continue to play a larger role as shoppers avoid in-store trips. The dollar channel lost share during COVID due to location & product assortment, but is expected to regain share as the need for value becomes more important.
    5. Connecting w/ consumers & customer retention: Spend on TV & digital is expected to increase as brands attempt to reach consumers spending more time at home (and spending will decrease on in-store promotional).
    6. Need for a resilient supply chain: Retailer confidence in a reliable supply chain will be key to maintain/gaining distribution. Expect SKU rationalization by retailers with potential for smaller brands to be removed.

 

Nielsen On Premise Update (insights from 4 states starting to reopen: Texas, Florida, Georgia, & Tennessee)

  • 33% of consumers have eaten out at a bar/restaurant in the last 2 weeks with 34% of those visiting 3x or more.
  • A large majority of consumers that have eaten out (nearly 9 out of 10) were satisfied with the overall experience despite new safety measures.
  • Confined spaces are the main deterrent for consumers returning to the on premise—about 40% highlight outdoor seating & social distancing measures as key for them to return.
    • Features that impact the consumer experience rank lower on the list of measures consumers would like to see (e.g. disposable utensils, masks/visors, etc.).
    • 45% of consumers “need more time” to feel comfortable in a bar/restaurant again with 19% uncomfortable with others preparing their food/drink (opportunity for package beer vs. draft along with RTDs).
  • 29% of consumers do not plan on returning to the on premise until there’s a vaccine or treatment available, while another 29% are waiting for a decline in cases being reported.
  • In Orlando, 45% have been out to eat, while only 17% have gone out specifically for a drinking occasions. Miami on the other hand, has seen less than 20% go out to eat with 14% going out to drink.
  • No surprise that Gen Z & younger Millennials (21-34s) comprise the majority of those who have gone out with the 55+ age group having the smallest percentage of diners.
  • Within cities that have reopened, 51% of consumers are drinking the same amount of alcohol as pre-COVID, while 27% claim to be drinking more & 21% drinking less.
  • Despite restaurants being open for on premise consumption, 62% of consumers have ordered takeout/delivery in the last 2 weeks with 19% ordering alcohol as well.
  • Casual dining chains & independent restaurants are the preferred venues in reopened cities, followed by sports bars (despite the lack of sports).
  • While wine & vodka has been the preferred drinks in most markets reopening, domestic non-craft beer has led the charge in Orlando.
  • Consumers were asked if they would drink various alcohol categories more or less when returning to bars & restaurants. Among 16 categories, the highest “more frequently” percentage was Hard Seltzers with 42% of hard seltzer drinkers saying they’ll drink them more frequently when they return.

 

RBCCM Consumer Staples Update

  • Following a reduction after the stockpiling week, Target foot traffic has returned (and exceeded) 2019 levels at 110% vs LY. Walmart & Costco have been slower to return with foot traffic at 98% & 90% respectively of 2019 levels.
  • A “second wave” of COVID-19 cases is highly likely/inevitable, but is predicted to be less severe due to heightened safety behavior.
  • While case counts are plateauing in the US, no state has sustained 14 days of declining case counts yet (despite all states beginning to reopen).
    • This plateauing is driven by NY though. If you remove NY from the total US, cases are still on the rise.
  • Restaurant reservations remain heavily depressed, but are starting to return in states with more aggressive reopenings (e.g. South Carolina reservations down only -62% vs. -96% in Virginia).
    • Foot traffic at SC restaurants is actually at 90% of 2019 levels

 

May 18, 2020

Approximate weeks in Quarantine:

9

ReOpenings or Lifted Restrictions:

Select states have begun to ease restrictions on businesses and allow for openings with capacity restraints.

ConsumerInsightMao

Consumer Spending Update

  • Sales remain elevated for the alcohol segment in recent scans.
  • Even as stay-at-home restrictions are lifted in some states, CPG purchasing behavior remains mostly unchanged – consumer confidence outside of the home will take time to restore.
    • Off premise alcohol sales remain +36% in New Zealand despite loosening restrictions.
    • In Georgia and Tennessee, sales trends remain in line with the Total US despite partially reopening at the end of April.
  • Grocery continues to outpace total MULO sales (+27% in the latest week vs. +18% for MULO) and Convenience returns to growth (+5% in the latest week) as states reopen.
  • Online sales for food and beverage are up +85% vs. LY (+68% for non-edible categories) for the 4 weeks ending 4/19. That’s a 20-point upswing from the 4 weeks ending 3/22.
  • Although sales have grown significantly during the pandemic, the mix of ecommerce fulfillment type has remained steady from January through April: about 7% delivery (Peapod, Instacart, Amazon Fresh, etc.), 15% click and collect, and 78% home shipment (UPS, FedEx, etc.).

With edible categories, home shipment sales have pick up slightly in recent weeks.

CPG Demand

  • Lasting economic impact of COVID-19 will be felt most strongly by Millennials and older Gen Z.
  • Millennials over-index on furloughs/job losses along with household income risk compared to the general population.
    • 40% have had work hours reduced or lost their jobs due to COVID-19 and a large majority expect the economic crisis to last longer than the health crisis.
  • 42% of Millennials are cooking from scratch more often and many will continue post-COVID even as states reopen.
  • Expect an accelerated shift to “better for you” post-COVID as Gen Z and younger Millennials are likely to change their eating habits to be healthier.
  • Among “return to normal” activities, Gen Z and younger Millennials are most cautious about returning to bars/clubs.
    • They’re most eager to return to work.
    • Dining out at restaurants falls somewhere in the middle.
  • Some key themes to keep in mind to address the needs of Millennials:
    • Focus on health/safety/wellness messaging. “Better for you” isn’t going away anytime soon.
    • Support the YOLO (You Only Live Once) connection to demonstrate how products move life “beyond the ordinary”.
    • Bring the out-of-home experience in-home and support the new DIY aspects of their lives.

While Bev Alc growth slowed in both MULO and Convenience the latest week, it is still up over +20 points each vs. the pre-COVID period.

Below are highlights from IRI COVID-19 Updates on big brand performance during the recession:

  • During the Great Recession, only half of major CPG brands grew in both dollars and volume.
  • Retaining/acquiring penetration remains the #1 growth driver even in a recession.
    • 77% of high-growth brands grew through increased penetration vs. 46% of low-growth brands (smaller growth driven primarily by  increased volume per buyer).
  • For large, high-penetration brands, increasing usage among existing buyers via innovation and marketing against new usage occasions are critical to success.
    • Of 29 large, mature Food & Beverage brands, only 6 grew both dollars & volume. Two of those brands were Bud Light & Coors Light, which succeeded by increasing buy rate among existing buyers vs. trying to attract new buyers.
  • Brands need to continue to reinforce overall value in messaging—beyond just price.

Total US MULO

 

May 11, 2020

Beer, Wine & Spirits

  • Bev Alc continues to steadily accelerate in C-Stores and beer remains the only top convenience category trending positive in both C-Store & MULO (Large Format).
  • Spirits consistently leads Bev Alc in terms of growth, with all categories showing accelerated growth trends in the last 2 weeks following a dip the week ending April 19.
  • With nearly all trending up prior to COVID-19, less than half of C-Store major markets are posting growth post-COVID.
  • Consumer expectations on the length of the pandemic continues to increase with over 40% believing the crisis will last more than 7 months (up from about 12% following the stockpiling week in March).
  • Latest consumer panel results indicate that 75% will wait a few extra weeks to a month or more to return to restaurants/bars/clubs once restrictions are lifted.

May 4, 2020

Beer, Wine & Spirits

  • High end beer segments continue to drive growth in Large Format stores, while Domestic Premiums have been a major contributor in recent weeks.
  • Wine growth driven by premium and super premium price segments, while more than half of spirits growth can be attributed to vodka and whiskey.
  • C-store trends slowly accelerating since initial stockpiling period as small format stores emerge as a quick trip alternative to larger stores.
    • Beer is the only major convenience category that is trending up in both c-store and Large Format stores for ever week in the last 8 weeks.
  • 14% of consumers report consuming more alcohol to reduce stress and that number has slowly increased over the last few weeks.
  • 78% of consumers plan to continue shopping online for groceries once we return to normal with 81% waiting more than a few weeks to return to the on premise.
  • Consumer demand remains high for Bev Alc – beer, wine & spirits demand over-indexes vs. total CPG and has accelerated in the last 3 weeks.

Great Recession’s Impact on CPG Demand

  • During the 08-09 recession, consumers cut back on CPG purchases, shifted to value-tier brands, and made fewer impulse purchases.
  • Shoppers migrated to value channels and regional grocers won share by tailoring assortment to their customers, while sales in c-stores slowed.
    • The top 6 regional grocers at the time all outperformed the top national chains.
  • Consumers still sought affordable luxuries, but brand loyalty suffered as they searched for the best deal.
  • Restaurants & bars were impacted significantly, but food & beverage stores proved most resilient compared to other types of retail stores.
    • A majority of consumers reported eating out less & buying fewer prepared meals in favor of cooking from scratch at home.
  • Supercenter, club, & dollar stores grew share of total households buying at the expense of other channels.
    • Value channels have grown significantly in the last 10 years & are likely capture a larger share of grocery dollars—e.g. Dollar General, Dollar Tree, Aldi, and Lidl.
    • Food & beverage volume declined in traditional large format grocers as prices increased—volume growth only recovered post-recession once pricing stabilized.
      • Beer was one of the few categories to see both volume & dollar increases in 2008…and had one of the lowest price changes among CPG categories.
  • A large majority of shoppers were more likely to look for sale prices throughout the store or look through retailer ads/coupons ahead of time.
    • The percentage of shoppers planning their trips ahead of time (and sticking to it) increased significantly from 2007 to 2009.

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