Stats Power Look at ‘How America Eats’

CHICAGO — Retailers might want to take notice of the four categories that have been doing well of late: pastry/doughnuts, frozen appetizers/snacks, soup and energy drinks.

These success stories were among many notable insights in the webinar “How America Eats: What’s Cooking Now With Consumers” by Sally Lyons Wyatt, executive vice president and practice leader of client insights for IRI, Chicago.

Social and digital media have influenced the success of both the soup and energy drink categories, said Wyatt, who unloaded a bevy of stats and information in the hourlong presentation July 13. Meanwhile, pastry/doughnuts have been helped by consumers seeking indulgence and convenience in return-to-work and school considerations, and frozen appetizers/snacks are up 1.1% year to date.

Highlights of Wyatt’s presentation include:

• As gas prices began to surge, consumers saved by shopping online for general food items to avoid driving to stores.
• Dining out varies across consumer segments due to gas prices.
• Consumers are changing their eating and drinking habits due to the economy, and the effect has been seen across category sales, meal kits and channel shifts, including online.
• On-premise quick-service restaurant (QSR) trips per shopper are down 3% year to date while retail food and beverage trips are up 1.2%. QSR dollars per trip have jumped 12.2% (versus 4.2% for retail), likely due to steep price hikes.
• Ideas and personalization, along with supply-chain improvement, are needed to drive growth across the industry.

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Year to date in 2022, price increases have helped fuel dollar growth both at physical locations and online in the categories of general food, beverages and frozen, Wyatt said. Refrigerated online is the only area where sales are down, 3.7%, which Wyatt said is due to lower availability and assortment. Total store sales are up 5.6% at physical locations and up 17.2% online.

Of greater concern, she said, are unit declines in brick-and-mortar locations, which have dropped 3.3%

Out of 10 categories, the only two driving both dollars and units are energy drinks and nonchocolate candy. The others are bottled water, carbonated beverages, chocolate candy, coffee, cold cereal, cookies, frozen dinners/entrees and salty snacks.

By occasion, snacking is still driving overall growth, with late-night snacking continuing to grow. Core snacking is up 9.9% in dollars sales year to date in 2022, while late-night snacking is up 11.4%.

Other statistics that Wyatt presented revolved around what she called “mobility variances”:

• Increased gas prices have altered consumer driving behaviors, with 66% of lower-income respondents changing at least some driving habits.
• Summer entertaining is expected to rise slightly versus 2021, with 13% planning more and 10% planning less. The top activity, at 70%, is “hosting a few friends/family,” with “cookout/barbecue” a close second at 69%.
• Most consumers prepare food for grilling from scratch, at 74%, but more convenient options appeal in particular to younger millennials; 30% of them prefer ready-to-grill items.
• Consumers do not stock up in advance, usually buying items the day of or one day before Memorial Day or July Fourth. “Use social and digital media to talk to them and give them ideas,” Wyatt said. “Knowing the behaviors is key.”
• Low-income consumers year to date in 2022 have cut back the most on on-premise QSR trips, down 5.3%, while food and beverage trips have remained flat for this group. Meanwhile, food and beverage trips are up 1.8% for high-income consumers.

• Only 33% of low-income consumers dined in a restaurant in May, versus 48% of middle income and 71% of high income. Tied to this is that the group most likely planning to cook more meals from scratch is low-income, at 20%.
• After solid expansion during the pandemic, online meal kit growth has slowed in 2022, down to 53% in percent change in dollar sales versus a year ago. In 2021, it was 58%. “This is a good opportunity for retailers to package convenient meals ideas to customers,” Wyatt said. “Include how-to videos.”
• A new phenomenon is personal “co-opping,” she said, with 5% of consumers buying groceries in bulk to split among friends. However, the percentage is higher, 9%, among Gen Z/younger millennials, households with children ages 6-12, and Hispanics. It’s 11% in households of five or more.
• Year to date, all channels are experiencing growth in dollar sales, but club and online are winning on unit growth, up 3.9% and 6%, respectively. Convenience stores are down 0.2% and food stores are down 4.1%.
• As gas prices go up, so do online sales. “This doesn’t mean consumers aren’t going into stores,” Wyatt said. “If you are brick and mortar, what do you need to do to maximize trip when they’re in your store?”

Across generations, millennials, Gen X and boomers are driving more than their fair share of growth, accounting for 29%, 28% and 35% of growth, respectively, in the last year, versus 2% for Gen Z and 6% for seniors. “Think of ways to lure Gen Z and seniors,” Wyatt said.

Elsewhere, she said:

• On average, consumers spend 17.3% of their food and beverage budget on store brands year to date, and refrigerated has an especially wide acceptance in store brands.
• Meanwhile, private brands gained share in 2020 and 2021 and are currently stable, while name brands continue to grow online and are currently at 10% of dollar share.
• The price incentive gap of store brands is not being maintained year to date in 2022 as this category had a higher price/volume percent change increase versus national brands in 44% of food and beverage subcategories. This might cause consumers to discontinue buying private brands.

Wyatt also touched upon various consumer groups on which retailers should keep an eye:

• Gen Z, which is becoming a highly influential group of shoppers, skews to convenient meals, energy drinks ready-to-drink coffee and ethnic cuisine.
• Low birth rates due to the pandemic has spending implications for center of store products as households without children in various life stages spend less.
• One consumer segment to consider targeting is the e-shopping enthusiast. This group on average spends 70% more (33.1% vs. 14.8%) on center of store products and makes seven more trips yearly—and it skews more toward fresh/frozen for online purchases versus more pantry stocking for the general public.
• There is a core group of consumers who look for sustainably marketed products in the categories of reducing deforestation, anti-pollution, renewable packaging, b-corp ecofriendly certification and renewable energy.

In closing, tips from Wyatt included:

• Collaborate with retailers to identify clever ways to capture consumers. Consider promoting picnic and grilling needs or a pizza night.
• Look for ways to increase bulk, multipack and club-pack assortments in store.
• Message customers the product benefits that align with their needs.
• Identify and promote small indulgences and higher-quality entrees as a tradeoff for not dining out.
• Focus on convenience, in and out of the home, taste and better-for-you offerings.