Over the last few weeks, I’ve been participating in many forums of executives talking about COVID life, ranging from protecting our employees to planning for the future. People in these forums vary in their perspective. Some are holding back planning and spend, others are giving things away for free, others are pivoting and building new solutions, some are moving forward cautiously taking this time to understand and plan, and there are others plowing forward seeking and creating opportunities where they’re available.
At the end of these forums, those that approached from the more conservative side leave understanding they can’t maintain nor put things on hold. They must move forward in order to have opportunity in the future. Especially because their competitors will.
Brands in selling into grocery have an opportunity most of these other organizations don’t. Grocery is the one retail category in the green:
As a brand focused on natural and organic have an opportunity many others don’t. Let’s get your organization ready to seize the opportunities of today and prepare for future success!
Today Compared to 2008 Recession:
Currently we are seeing natural and organic food, vitamin, and supplement categories continuing to gain momentum. This is consistent with trends we saw in 2008/2009 during the recession. Back then, people changed their spending patterns from eating out to eating at home. With that move, they sought out healthy choices for their family. They cooked at home and the concept of farm to table took off. All indicators point to people staying home and cooking their meals for the majority of 2020. Because all of this is driven by heath concerns, we anticipate people will be seeking out the healthiest options they can afford for themselves and their families. Opportunity for natural and organic growth increases with this change in behavior.
Here are stage gates to consider as you navigate your future:
Planning for the next 2 – 4 weeks:
Retailers need your help. We recently published 6 areas where you can support your retail partner today. The key message of that piece is to make sure your retailers know you have product. If you can bypass your distribution center, let your retailers know and work with them to deliver direct.
Retailers are busy but they are looking for new products or alternative products for those they can’t source. During this time, consumers are focused on building their immunity and staying healthy. Now is a terrific time to build new consumer awareness so don’t miss opportunities for promotion as retailers still appreciate opportunities to help customers find value and try new things. Make sure your product is on the shelf.
SPINS has store level data that you can use to ensure your product is on the shelves. Call today and you can have access to the store level data you need to increase your distribution and sales within the next 2 – 4 weeks.
Planning for the next 2 – 4 months:
The life altering changes we’re experiencing are creating new behaviors and moving existing behaviors to mass behaviors – working from home, cooking at home, eating healthy. These behaviors are quickly turning into habits. Habits that will continue (at least) over the next 2 – 4 months. Early reports from China, people are moving cautiously and still practicing much of the behavior from their quarantined time. Now is the time to understand these habits and meet consumers in those new habits.
This creates opportunity for natural existing and natural emerging brands. These behaviors have resulted in a significant shift of spending. The average person was eating out 5.9 times a week spending from $2k - $3500 (on average) annually. Spending at restaurants in 2019 were ~ $863B. These dollars are now shifting to grocery. Grocers are reporting from 30% increases to 100%+ increases in sales over the last 6 weeks. All indicators point to continued grocery spend. In the last week ending 3/29, we’ve seen COVID spend move from immunity and necessities to produce, healthy snacks, organic cooking and baking items. These are the areas of continued opportunity that continue to index highest versus pre-pandemic stock up:
Shelf Stable Soup – 263 Index
Shelf Stable Pasta – 243 Index
Shelf Stable Fruits & Veg – 237 Index
Shelf Stable Entrees & Mixes – 236 Index
Shelf Stable Baking Mix & Flour – 233 Index
The opportunity 2 – 4 months from now, with this shift, natural grocers will shift their attention to these new core categories, looking for new and broader selections.
To be prepared for this opportunity, you need to act now. You need to do your homework. Understand the changing landscape and recognize that new patterns are emerging literally every week. anticipate and understand how your product(s) fit. Do you know what’s important to the new ’stay/shelter at home’ consumer? Do you have the ingredients that the post-COVID shopper will be seeking? Now is the time to do your research. Learn how consumer preferences are changing and understand what’s most important.
With this research in hand, you can make a difference in your approach. You can enhance your pitch to the retailer. You innovate your product through sizing, packaging and positioning. For example,, Good Foods just announced new fresh clean label packaging for their Guacamole:
The SPINS team is watching these trends, analyzing panel data and helping brands position themselves for success here in the short term.
Planning for the next 6 – 12 months:
The 2020 fall, tailgate and then later holiday season is sure to be different than those in our recent past. This is the time to understand your new baseline
Beginning late October/early November, with the trends we’re seeing already especially the shift to cooking at home, you can expect higher than typical increases in the usual – eggs, butter, flour, sugar as customers re-learned to cook at home during our current COVID19 environment We’ve seen families learning to bake together that have never tried it before and our sales trends are reflecting it too. These changes in behavior will likely reshape holiday norms. You’ll likely see the immunity boosters pick up faster and with more velocity as consumers increasingly have self-care on their minds as cool weather returns coupled with new habits from the previous seasons COVID experiences. Those sales will be strong and steady likely for a much longer than typical season throughout the winter. Also, expect consistent growth from products considered ‘food as medicine’ with added functional ingredients and immunity boosting qualities.
Since COVID-19 hit we’ve seen significant increases in these categories, could these become the new baselines?
Vitamins & Supplements +1283%
Herbs & Homeopathic +210%
Digestive Enzymes +3149%
Food Supplements +3108%
Another potential boost for these categories and others is a potential baby boom. Experts are mixed on when this could hit. Some believe the time locked down will inevitably result in a baby surge. Others, like The Economist, speculate that the boom will occur when we’ve successfully made it through. This gives us a 9 – 18+ window to see increases in prenatal as well as baby products.
Finally, expect to see continued increased awareness and sales momentum for products supporting sustainability as consumers have seen first hand during this crisis the positive impact that humans can make on our planet. Whether supporting local farmers, promoting brands using regenerative agriculture or traditional recyclables, biodegradables, and ecofriendly ingredients, expect more demand for these items.
For brands in these categories or those of you who can pivot to these areas, now is the time to act. Now is the time to understand this demand. Understand the new purchase patterns to plan for the increases.
For all brands across all categories, you also need to recognize that there will be a new normal. Consumer behaviors will be fundamentally changed and we don’t know yet how these behaviors will fully manifest on the other side nor how long it will take for the economy to fully recover. SPINS has the specifics behind the above changes in market dynamics and expected increases. Let us help you, today to unpack and plan for your future!
Now is this time to strategically plan and make your move. Take the time, do your research, understand the new norm and be prepared with your new baseline.
SPINS is here to help. From our store level data, data harmonization tools, to our growth solutions team support and panel data, we can arm you with the information you need to make the right business decisions, create the right retail acquisition plan and even help you write the winning pitch.