Fresh
thinking from
the front lines.

By Brad Hanna
EVP, Business Strategy Director

As most businesses are reopen and America crosses an uneasy threshold, consumers are moving from anxiety and worry to boredom and anxiousness—many are eager to get back to a new normal. Still, some will wait for a vaccine before fully entering the world outside their homes: the latest research from McKinsey suggests 61% of consumers will remain isolated when restrictions are lifted. This means consumers will be in a state of flux as the country navigates its way to reopen. 

CPG clients should already be preparing for the Recover phase.  We see a few key implications for CPG brands as they work with foodservice and retail grocery customers:

Foodservice

Restaurants will have to follow strict precautionary measures in their dining rooms and kitchens for the foreseeable future.

• Taking customer temperatures
• Requiring servers to wear mask and gloves
• Reducing the number of tables by 50%
• Limited to groups of four people per table
• Minimum of five feet between tables and providing disposable menus

Restaurants will be the new American startup – reinventing business like never before

• Shift to comfort foods over health
• Shift to family meals vs. individual
• Adding fresh produce and other grocery items
• Shifting away from big dining rooms and focusing on takeout and delivery only

CPG brands will need to address key issues concerning consumers, operators and their own manufacturing.

Implication:  Brands need to address food safety, supply and provide a lower cost alternative to improve operator margin. Think about products that reduce handling in preparation. Focus on products that bring higher value and margin to operators. Re-evaluate your selling story for relevancy in the right products and messaging. 

Retail Grocery/Mass

Recessionary behaviors are beginning to take hold:

• Most consumers are returning to their “preferred retailer” as stores are returning to normal inventories.
• Consumers are buying enough groceries to last 2 weeks or more.
• Winning retailers will continue to adjust store space to facilitate in-stock of “stay-at-home essentials.”
• 67% of consumers feel prices have increased during COVID – an increase from 41% in early March.
• Consumers are still buying multi-packs more and single serve products less.
• Private label and value brands will become increasingly relevant.

Source: IRI Survey 4/10-4/12 among National Consumer Panel representing Total US Primary Grocery Shoppers 

During COVID-19, retailers have experienced huge shifts in shopping patterns, including growth categories such as packaged foods, frozen foods and dairy.

Implication: Manufacturers will need to defend their shelf space as retailers reallocate for high-demand, higher-margin opportunities. 

• Look at moving club store products into traditional retail to meet the needs of bulk buying. 
• Smaller brands need to make the investment in buying category scanner data or invest in consumer research to monitor your category and brand behaviors so you can control your brand story.  We are always surprised at how smaller brands are hesitant to purchase scanner data or invest in research. Today is the day to make these investments or your competitors will use the data against you. 
• Shelf stable and frozen brands will want to accelerate share of mind and promotion to retain new COVID-consumers as they move back into normal routines. Think geo-targeted digital media around markets or even store trade areas with strong distribution and sales growth.
• Re-evaluate your selling story and product recommendations to ensure the talking points are relevant.  
• Focus on making your food/manufacturing safety a top priority.

As we enter recovery, brands should focus on Purpose and Practicality.  If you are in a growing category, double down on your purpose to build strong brand connections and loyalty.  Brands that have been slower to respond should continue to focus on being helpful and delivering a better value as recessionary patterns emerge. CPG brands must also build in flexibility and be ready to shift as consumer mindsets and patterns evolve.  

CPG brands must also build in flexibility and be ready to shift as consumer mindsets and patterns evolve.  

ADDITIONAL RESOURCES:

COVID-19 POV #1

COVID-19 POV #2

Influencers during COVID-19

Goodwill during COVID-19

Media Relations during COVID-19

Remote Working Best Practices

Brands Matter: Three ways useful brands connect with consumers during crisis

Gen Z life during COVID-19