What is it?
Household penetration is a key metric that helps companies understand how widely their products are adopted in the market. Higher household penetration indicates that a larger proportion of households are using the product, which can be a sign of strong market acceptance and brand loyalty. Household penetration metrics come from consumer panel data.
Why is it important?
For CPG companies, measuring household penetration is crucial for assessing market reach and growth potential. It provides insight into whether a brand is expanding its consumer base or if there is an opportunity to increase usage through marketing campaigns, product innovation, or distribution strategies. Increasing household penetration is often a primary goal for brands looking to grow their market share and establish themselves as a staple in consumers’ everyday lives.
What are some examples?
Household penetration is often used when talking about what percentage of the population buys a category or a brand. These metrics are usually expressed as phrases like “75% of U.S. households purchased yogurt at least once last year,” or are broken out on a brand basis. Let’s say we’re looking at LaCroix Sparkling Water in the U.S. for the last 52 weeks:
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Total U.S. households: 150 million
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Households that bought LaCroix at least once: 15 million
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Household Penetration = 15M ÷ 150M = 10%
That means 10% of U.S. households purchased LaCroix at least once in the past year.