The outlook for the CPG industry is positive for the remainder of 2018, despite getting off to a slow start, according to the IRI Consumer Connect survey. Beverages and deli cheese were top-performing departments during the first quarter. In the perimeter of the store, pound sales fell 1.8%, but dollar sales increased 1.4% compared to the prior year. In addition, 25% of consumers expect to buy more premium products in the next six months.
To ease financial struggles, shoppers are embracing strategies such as comparison shopping, brand switching and price shopping. Among the most prevalent strategies, 85% of consumers are buying private label brands, particularly 91% of Millennials and the same percentage for Generation X. Seventy-four percent of consumers are trying new, lower-priced brands, with Millennials (85%) and Generation X (82%) most apt to do so.
Younger Millennial spending stood out in the first quarter compared to other age groups, especially the senior cohort, even as Hispanic shopper spending lagged behind other populations.
Meanwhile, there is opportunity in the premium product category. This is especially true for wealthier consumers. Thirty-five percent of households earning $100,000 and more say they will spend more on premium products this year.
Consumers, no matter the income level, are seeking food and beverage solutions that will help them advance their nutritional goals, and they are willing to pay for the extra benefits, according to the vice president of thought leadership for IRI.
Thirty-six percent of consumers say they will spend more money on products that offer benefits beyond basic nutrition, while 29% will spend more on natural and organic solutions.
Manufacturers and retailers must know their customers well and tailor their offerings to meet their needs, IRI suggests. The key is personalizing products and messaging to encourage consumers to support a brand.
For the full story, go to this week’s Food Institute Report.
Chris is a business writer and market analyst that focuses on the Markets, Legal and Washington sections of the Food Institute Report. In addition, he assists in compiling data for various Food Institute publications throughout the year. He invites you to contact him via email at firstname.lastname@example.org to talk about anything food-related.
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