ECO RESOURCE Covid aftertaste: what awaits the food industry in the new year
Covid aftertaste: what awaits the food industry in the new year
Maintaining the demand for food

Two main factors contributed to this: subsidies from the state and a reduction in the tourist flow abroad.

Approximately 10 million Russians stayed in the country and, consequently, bought food in Russia.

Expansion of the shopping basket due to new products

Over the past year, there has been a trend towards choosing new products and brands. Customers have become more open to the idea of trying a new product. At the same time, they are interested in new products, regardless of promotions.

In April-October, new products without promotions provided about a third of the growth of the entire FMCG market.

Falling demand for ready-to-eat products

These are mainly sausages, instant noodles, semi-finished products, etc. This is due to the fact that people have started spending more time at home and they have additional opportunities for home cooking. For example, the demand for pork has increased, and this trend will continue.

During the period of self-isolation, demand in these categories decreased by about 28%, but by autumn it began to grow slowly.

Antistress products

The segment of snacks and confectionery products showed growth, which is explained both by the global fashion and the psychological state of people in the new conditions. Being at home, people are more likely to have a snack, and in a state of stress they want to distract themselves and please themselves with something delicious.

In addition to these categories, which people traditionally "eat up" stress, alcoholic beverages showed an increase. The increase in alcohol consumption during self-isolation, according to the estimates of the Ministry of Health, amounted to 2-3%.
Particular growth was shown by: gin (47%), rum (27%) and whiskey (21%). Growth in these categories was observed earlier, and this is due to the increased popularity of alcoholic cocktails. Now cocktails have become more prepared at home. Interestingly, vermouth, which is considered a women's drink, also showed an increase (22%), and sparkling wine - a drop, because it is associated with a holiday.

Impulse Goods

Chewing gum, dragees, baby juices, etc. showed a drop due to a decrease in the frequency of trips to the store.

Long-term storage products

The excitement on the eve and during quarantine for products that have been stored for a long time has decreased, but so far 34% of buyers buy individual products for the future, about 12% are afraid that they will run out of stocks.

For example, pet products have shown significant growth. The reason is not only that buyers sought to stock up on pet food against the background of general panic. People began to spend more time at home and pamper them more often.

The trend will continue in the near future, because customers are not ready to visit the store often without special need.

The most popular products in the consumer basket, the growth of individual categories

In May 2020, compared with May of the previous year, the growth of certain categories was: groceries, sweets, snacks 5%; drinks 4%

The share of consumer spending on meat is 14% ( 2% over the past year). In 2020, there is an active growth of premium types of meat.

Share of expenses on beverages, dairy products - 12%

Shifting accents

The compromise value of "price-quality", where the price still remained the main one for the buyer, is transformed into "quality-price". The consumer is willing to pay a higher price for quality and naturalness.

This trend is developing independently of the events related to the coronavirus. However, during and after self-isolation, people began to pay more attention to their loved ones, take better care of their health, and this reinforced the already existing trend.




Changes in customer behavior

  • Promotional items

The number of consumers focused on promotional products has decreased (now it is 71%). This is due to the fact that they are not ready to spend a lot of time in the store in search of such goods. People are focused on buying the right products as quickly as possible. The share of promotional products returned to the level of 2018. The promo recovery will be slow, and retailers will probably look for other ways to stimulate demand.

  • List Purchases

49% of customers buy products according to a pre-compiled list.

The number of such buyers has increased because the list helps to save money without succumbing to impulse purchases. In addition, it contributes to the quick completion of purchases.

  • Interest in STM

Own brands have become more attractive to consumers - 23% preferred them to purchase.

If before the crisis (January-February 2020 compared to January-February 2019), the main drivers of FMCG growth were current products for promotions, then during the crisis, the usual brands of products without promo and new products without promo became the drivers of sales.

In general, the sphere of food production "got away with it", or rather from the coronacrisis, and in some places even in the black. For example, Nestle's food sales grew by 4.3%, and this is the strongest indicator in the last five years.

We continue to monitor the market together with you. It is extremely important for manufacturers to quickly adapt to changes in consumer demands and become the first in the new market hierarchy.

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