Circana Growth Insights

CES Podcast No. 2: Technology for a Better Life

Recapping their Consumer Electronics Show presentation, “7 Ways the Consumer Electronics Consumer Has Changed,” NPD colleagues Ben Arnold and Paul Gagnon illustrate the growing value consumers derive from technology and the opportunities for manufacturers and developers to meet changing consumer needs.  

Key takeaways:  

• Consumer technology holds a greater place in the household budget than it did prior to the pandemic – and it’s due more to the value of technology than to inflation.   
• Aside from foundational technology, application innovation enables convenience, productivity and even personal health.  
• Marketing of electronics is changing: It’s increasingly migrating to digital channels and focusing more on the value tech brings to how people live their lives.

C-Suite Conversations: Creating a Sustainable Industry to Nurture Future Generations

IRI's Growth Insights C-Suite Conversations feature notable leaders talking about the future of CPG, retail and media. Our newest installment focuses on sustainable protein and features the perspectives of Simon Limmer, CEO of Silver Fern Farms, New Zealand's leading producer and marketer of grass-fed beef, lamb and venison. He is joined by Joe O’Connor, president of Applegate, a leading producer of natural and organic meats and cheeses that was acquired by Hormel Foods in 2015.

In this exclusive interview, Limmer and O'Connor first share their personal definitions of sustainability. O'Connor talks about Applegate's sustainability journey, from antibiotic-free meats to organic meats and now regenerative agriculture. Limmer details Silver Fern Farms' unique business model for sustainable meat production. And both look at future sustainability trends, who the sustainable meat consumer will be in 2030, and the crucial role progressive farmers play in making sustainable protein products possible.

CES #1: Where Consumer Products Meet Their Future

The 2023 Consumer Electronics Show will showcase changes to the industry that put consumer needs and challenges at the forefront of technology and solutions.

Kitchen appliances large and small are now “smart” and help answer the ages old question: What’s for dinner? Find out where the meal falls short of the plate.

The pandemic dimmed the innovation light for many companies, but still, many advancements to existing products address relevancy and seamless integration into consumers’ everyday lives. The next question: How are manufacturers leaning into digital technologies to inspire consumers?

Key takeaways:

• Consumer products have a lot to learn at the CES, including how they fit – and should fit – with the way consumers live and behave today.  
• Examples of how technology continues to evolve to fit seamlessly in consumers lives. 
• Opportunities for technology to close the gap on some existing – and future – consumer needs.

Dairy Discovery

Like many departments, inflation is driving growth in the dairy case. But some categories are going strong on their own might, including frozen novelties, coffee creamer and natural cheese. Learn about trends and innovation occurring among the “Dairy 15” from John Crawford, leader of IRI’s dairy vertical and vice president of Client Insights, Dairy. 

Key takeaways:  

• Inflation has shoppers returning to private label offerings in the dairy case after the pandemic years saw name brand dairy products driving growth. Currently, private label products in 12 of the 15 dairy categories are outpacing sales growth of name brand products.  
• Key benefits consumers are looking for in the dairy case include immune defense, and pre- and probiotics. Lactose-free remains a strong growth segment. Despite inflation, consumers are willing to pay more for these added benefits.  
• Plant-based products are leading innovation in the dairy case, but dairy innovation is occurring with flavors and name brand licensing. 

Innovation Brightens the Outlook for Frozen Foods

Buoyed by the uptick in sales of frozen foods throughout the pandemic, retailers and CPGs are doubling down on the department’s expansion and availability throughout the store. They’re also focused on frozen product innovation for the future. IRI’s Sally Lyons Wyatt and Anne-Marie Roerink of 210 Analytics share the strategies in play and highlight the best opportunities for future growth.  

 

HIGHLIGHTS 

 

• Younger shoppers perceive frozen foods to be as good as fresh and see them as a source for inspiration and convenience.   
• CPG manufacturers get high marks for innovation around consumption lifestyles, sustainability and using packaging to communicate with shoppers.   
• One secret to continued growth is achieving the right balance of assortment, including entry-level price points through private brands and innovation in name brands.  

In-store Bakery Is Back

While the bakery aisle performed well throughout the pandemic, in-store bakeries took a major hit. But now they’re back. To fight inflation, consumers are biting into more permissible treats, celebratory cakes, and specialty breads and rolls to elevate meals at home. The biggest winners are products that support the morning daypart. Still, guest Melissa Altobelli, principal, client insights with IRI’s bakery vertical, says in-store bakeries should seek inspiration from what’s happening outside the store.  

  

Highlights 

 

• High inflation is causing more consumers to trade down from restaurants and coffee shops to baked goods found at retail, especially for the morning meal.   
• While not the largest share of e-commerce, donuts and pastries are the fastest-growing subcategory.   
• Younger consumers are looking for adventure from their food. Retail bakery can answer the call with whimsy and fun, including colored or cereal-flavored bagels.   

Fresh Pulse: Meal Making and Mood Lifting

Inflation is driving us back to CPG retail for food-at-home solutions. But even as shoppers seek to save, they’re still finding ways to elevate their meals and their mood with affordable indulgences. IRI’s fresh expert Jonna Parker, principal of IRI’s Fresh Center of Excellence, and Anne-Marie Roerink, president of research company 210 Analytics, share new behaviors and strategies for connecting with shoppers.  

 

Highlights 

 

• In most channels, fresh is one of the few categories where shoppers typically purchase only as much as they need. Yet club and mass channels offer the allure of volume discounts from larger pack sizes, pointing to a bifurcation of the marketplace.  
• Inspired by social media, consumers are still turning to deli-prepared platters and charcuterie boards for meal and entertaining solutions. These options give retailers and manufacturers an opportunity to connect with shoppers, especially younger ones, where they’re already engaged.  
• Consumers are still looking for small indulgences during periods of high inflation, often to lift their spirits. Retailers can help with unique, premium, yet still affordable products.  

Forecasting with Confidence

Gone are the days of forecasting for the year ahead. Spurred by the chaos of the pandemic and ongoing market uncertainty, CPG manufacturers and retailers must continually monitor the marketplace, weighing decisions against consumer behavior, macroeconomic factors and business strategies. Nagi Jonnalagadda, senior vice president, Global Products & Solutions at IRI, recommends companies change their approach to forecasts from point-in-time planning to scenarios with varying levels of confidence.   

 

Highlights  

 

• Consumers are proving to be more resilient to dramatic price increases than expected. But they’re now starting to change their shopping behaviors to manage inflation. 
• Forecasts should be considered scenarios with confidence intervals, with broad upsides and downsides and an agile approach as scenarios evolve.   

• Forecasting is now a blend of art and science with new tools and unlimited data inputs. The art is shutting out the noise to identify and monitor the right demand signals, focusing on what matters most to your business.   

A Thanksgiving Outlook

Will high food inflation take the stuffing out of Thanksgiving celebrations? Darren Seifer, executive director and industry analyst for food and beverage at NPD (which recently merged with IRI), shares an outlook on potential scenarios for Thanksgiving meals this year. 

Highlights 

• More consumers will shop early for nonperishable items to find the best deals and spread out the cost of the Thanksgiving feast. 
• Shoppers are more cost-conscious than last Thanksgiving given inflation and will look for deals. But they will also remain willing to splurge on the relative value of an important home meal and festive get-together with loved ones. 
• Some cash-strapped consumers will still host but keep costs in check by making smaller portions for fewer leftovers, or even turn the event into a potluck. 
• Restaurants and grocers can play a role in the holiday meal by offering time-saving items like freshly made pies and ready-to-heat sides.  

The Shifting Protein Landscape

Inflation, animal welfare issues and new generational preferences are all affecting the sales of various fresh meat and poultry products. Chris Dubois, executive vice president of IRI’s protein practice, provides insights into surprising winning products, offers a detailed industry outlook, and shares opportunities to connect with younger shoppers. 

HIGHLIGHTS 

• Recent price increases for fresh meat and poultry don’t seem as extreme as other areas of the grocery store, but prices are much higher than a few years ago. 
• Protein producers have been facing supply threats dues to avian flu (poultry) and African swine fever (pork). 
• Millennials have different food preferences than older generations, buying far less veal and more chicken, ground turkey, oat milk and nut butters.