Circana Growth Insights

Busting the Myth that We’re Consuming Less

As inflation continues to press consumers, volume sales are down across food and beverage. Amid economic headwinds and a return to pre-pandemic activity levels, consumer behaviors are changing, but we are not consuming less. Circana thought leaders David Portalatin and Alastair Steel explain how shifting behaviors are illustrating new patterns in consumption across retail and foodservice.  

Highlights:  

• Food inflation might be easing, but we’re still paying around 30% more for retail food and beverages than we were pre-pandemic. As consumers trade down, they are also buying smaller amounts to avoid waste.  
• Where disinflation is seen in retail, it’s not occurring in foodservice, where the price of a meal is more than 4 times that of food sourced from retail. Still, growth can be seen for the morning and afternoon dayparts and at quick-service restaurants.
• Consumers are looking for deals. Restaurant apps are helping get diners in the door and feeling good about the value on offer. At retail, coupons are coming back, but not at depths that are motivating shoppers.  

A Sneak Peek into “Inside America’s Kitchen”

Circana has undertaken an extensive audit of America’s kitchens, recording what’s in our pantries and refrigerators, and inventorying appliances, cookware and utensils. Findings, found in the new report, Inside America’s Kitchens, reveal that we’re stocking far fewer food items than in 2020, yet we’re making good use of tools in our meal prep. Darren Seifer, Circana Food & Beverage Industry Analyst, shares insights into behavioral changes and generational differences.  

Highlights:  

• With the inflation of 2023, consumers are pulling back on impulse purchases and doing their best to avoid waste. There are an average of 10% fewer pantry items in 2023 than there were in 2020.  
• Convenience is a priority for all consumers, but how we realize it differs, often based on our ability to pay for speed, great taste, fresh offerings and customization.  
• While coffee is nearly ubiquitous across households, there are dramatic generational differences in how it’s prepared. Generation is an indicator of other food items, as well, with older consumers more likely to have staples like cooking oil and canned tomatoes, while the youngest households are more likely to have pasta sauce and pasta on hand.    

Redefining Discovery for Cash-strapped Consumers

Inflation may be easing, but consumers are still paying dramatically higher prices than two years ago, and face increasing pressure resulting from the additional SNAP benefits that expired earlier this year, forthcoming student loan repayments and increasing credit card debt. Still, consumers of all household incomes are finding affordable escapes or rewards and easy entertaining ideas, courtesy of fresh foods. In this Fresh Pulse episode, Jonna Parker, principal of Circana’s Fresh Center of Excellence, and Anne-Marie Roerink, president of 210 Analytics, discuss macroeconomic pressures, why even cash-strapped consumers are making choices based on “and” not “or,” and the importance of connecting with the right shoppers with the right products.  

Highlights 

• The pinch of inflation continues to hurt, but fresh offerings can lean in by defining their “value” to the shopper. Across household income groups, value doesn’t equal lowest price.  
• Shopper trips are up but baskets are smaller than two years ago, with consumers visiting more retailers to fulfill their needs. Too many retailers and brands are focused on high-spending boomers, often without realizing the changing behaviors of this group. It’s time to look to where growth will come from.  
• Along with more frequent, small trips in-store, online shopping appeals to those wanting to stick to a budget. Both work against in-store discovery, meaning marketers must work harder to showcase new delights and solutions.  

What Books Tell Us About the New Normal

Kristen McClean, executive director, industry analyst, Circana Books & Entertainment, describes books as “ideas wrapped up for sale.” When we study the books people buy, we learn about their thoughts and their shifting attitudes over time. This understanding helps us better meet changing consumer preferences.

Highlights:

• Books reveal the radical changes that are taking place as we find our post-pandemic normal, including a return to work, experiential travel, and increasing interest in physical well-being.
• These interests, in turn, will affect product innovation, marketing strategies, and the influencers and social platforms consumers engage with.
• Sales of fiction books are up for three consecutive years, including romance, fantasy, and escapism, which are causing a ripple effect across the CPG, toys, and entertainment industries. “Kidults” might be driving more toy sales, but marketers of all products should take note of their child-like preferences.

 

The Value of the Plus-one Purchase

Easing inflation is making headlines, but consumers remain challenged by high prices. In this Fresh Pulse episode, Jonna Parker, principal of Circana’s Fresh Center of Excellence, and Anne-Marie Roerink, president of 210 Analytics, discuss consumer behavior, macroeconomic challenges, and why plus-one purchases are undervalued.  

Highlights: 

• Consumers are on the hunt for deals and will shop across multiple stores to find them. While trips were up, baskets were down around five units per trip in June 2023. 
• Consumers’ value of their time has rebounded since the pandemic. As a result, hybrid meals are now the norm, with consumers leveraging freshly prepared retail options, restaurant offerings, and pantry staples to pull together meals.
• Bakery items epitomize the value of a plus-one purchase, as consumers look for affordable items to brighten lunchboxes, reward small accomplishments, or elevate meals. Retailers should encourage extra purchases through their apps.   

Turning the Tide of Tech

Consumer tech purchases for school, work, and entertainment were high during the pandemic. Tech items also have a long lifecycle, with replacements occurring on average every four years. The net result is a sluggish consumer tech industry in 2023. Circana’s Mike Crosby, executive director, industry advisor for commercial and consumer technology, and Paul Gagnon, vice president, industry advisor, consumer technology, share their outlook on the consumer tech market for the remainder of 2023 and into 2024.  

Highlights:  

• Most tech sales take place at the end of the year, from back-to-school season through the winter holidays. Retailers and manufacturers should use digital platforms to encourage consumers to shop in store, an easier place to showcase wares and adjacent products.  
• Innovation in consumer tech took a back seat to production during the pandemic. Look for the innovation pipeline to fill again at the close of 2023 and into 2024. There’s excitement around AR/VR as Meta ups its game and Apple enters the arena.
• Consumers might be ready for tech upgrades and replacements, but budgets are tight. Many consumers will look for ways to extend the life of products they already own. Retailers and manufacturers should be prepared for the upcoming holiday season with optimal innovation or promotions — or both.  

How CPG Retailers Can Rewrite Their Summer Playbook

Inflation is high, which might limit discretionary spending and travel for many. Still, it’s summer and consumers are making the most of pandemic investments made in outdoor spaces, grills, and smokers. Now is the time for retailers to rewrite their summer playbook and merchandise for a new generation. Learn some tips and tricks from Jonna Parker, principal of Circana’s Fresh Center of Excellence and Anne-Marie Roerink, president of 210 Analytics. 

Highlights:  

• Meat might still be king of the grill, but its increasingly sharing space with vegetables, plant-based meat alternatives and different types of protein.  
• Brands that cross-promote across categories and retailers that highlight convenient solutions see a bigger sales lift. Consider the opportunities of educating and inspiring consumers with products from across the store to build bigger baskets around the theme of grilling, for example.   
• With more retail channels competing in fresh, too many are selling the same products and traditional price promotions aren’t delivering lift. Consider digital ads and messaging to target and connect with shoppers and get them to make the trip to the store.
• Retailers don’t necessarily need to change their assortments, but they should rethink how they merchandise. Consider different colors and merchandising strategies to position products in new ways.  

Bold, Healthy Options Lead the Sweets & Snacks Innovation Awards

Innovation is a foundational attribute of Circana, so its sponsorship of The Sweets & Snacks Expo’s Most Innovative New Product Awards makes perfect sense. Sally Lyons Wyatt, Circana’s executive vice president and practice leader of client insights, and Anne-Marie Roerink, president of 210 Analytics, share insights on the winning trends and attributes.  

Highlights:  

• Sweets and snacks are often an impulse purchase, so innovation in this area is particularly important. Older consumers look for innovation from their trusted brands, while younger consumers are attracted to global flavors and interesting experiences.
• Award-winning products made the most of packaging. They presented a sophisticated and clean front panel and told the brand/company story on the back panel.
• While bold and fun flavors dominated, other winners included sustainable products, allergy-friendly options, and products that mixed function with fun (such as energy- and vitamin-boosting candies).  

Complete Wallet’s Total Omni Shopper View

The merger of IRI and NPD ― now Circana ― brings together data and expertise from 20 industries, including CPG, general merchandise, and foodservice. These combined resources across 30 shopping channels, hundreds of retailers, and more than 1,200 categories enable Complete Wallet™, the most complete view of what, where, how, and when consumers buy. Patty Altman and Michelle Bennett, executive vice presidents of Consumer and Shopper Insights at Circana, describe the opportunities Complete Wallet unlocks.  

Highlights:  

• Timely information — fueled by receipt panel data, consumer surveys, and myriad other data sets and technologies — identifies consumer lifestyle shifts as they happen in real time.
• Brands, retailers, and other industry players are able to expand their perspective on the shopper to identify new opportunities for growth.
• This more complete view also identifies consumer purchasing priorities across all categories as well as by shopper type, from SNAP recipients to generational cohorts.  

 

 

CPG Retail’s Role in Lifting Consumer Confidence

CPG retail is feeling the impact of tumbling consumer confidence. Ongoing inflation and anticipation of a recession have consumers pulling back on stock-up trips and instead shifting to quick trips and sticking to their shopping lists. In this Fresh Pulse episode, Jonna Parker, principal, Fresh Center of Excellence at Circana and Anne-Marie Roerink, president of 210 Analytics, share proven strategies that inspire shoppers and drive loyalty.

• 40% of shoppers report combatting inflation by stretching meals and minimizing waste. Produce benefits from quick trips, as consumers buy only what they need and consume what they have. With produce considered essential, retailers should hone their EDLP strategies.
• Retailers don’t have to “own” the entire meal. Fresh items can complement both convenience items or meal components sourced from foodservice.
• With promotions still down compared to pre-pandemic, retailers should leverage their digital assets, including coupons, social media and QR codes, to make recommendations for shoppers.