Changing Consumer Preferences and Grocery Sales During COVID-19

Kerry’s North America Marketing and Consumer Insights team is keeping tabs on changing grocery shopping trends

As COVID-19 spreads across the globe, the food and beverage industry is experiencing unprecedented changes. With some restaurants closed and many open solely for takeout or delivery, 90% of eating occasions in the U.S. are happening at home, especially in areas with “shelter in place” or “stay home” orders. This is causing sudden shifts in grocery sales during COVID-19, and changing consumer preferences can be viewed in real time via empty supermarket shelves.

But scrambling for staples and shelf-stable foods is just one change impacting the industry. Complicating matters further is the rise in unemployment rates, which some estimates say may hit 32%, topping numbers collected during the Great Depression of 1929. If consumers are fearful of shrinking income streams, their habits may continue to evolve from today’s pantry-stocking practices to more of a recessionary mindset sometime in the near future.

To review what’s known about how these shifts are affecting grocery store purchases during COVID-19, we checked in with Kerry’s North American Marketing and Consumer Insights team for grocery shopping data and insights. Some trends they've identified:

  • There’s a rising consumer adoption of digital orders for grocery purchases, even among older Baby Boomers
  • Stores are experiencing a near-term return to frozen meat, seafood and meals as well as shelf-stable pantry staples and alcohol products
  • Unlike recessionary pantry-stocking, retailers are seeing an increase in purchases of nostalgic and indulgent items such as confectionery, desserts and salty snacks
  • Consumers seem willing to give up national brands in favor of store brands and private label options
  • There’s a heightened focus on functional benefits such as immune support, stress management and probiotic heath
Online grocery sales during COVID-19

There has been a significant spike in online grocery shopping—as much as a 100% increase according to a recent Adobe Analytics survey—as consumers follow shelter-in-place orders, practice social distancing measures and limit their out-of-home visits, including making fewer trips to the grocery store. According to a survey conducted by Civic Science, online ordering grew significantly around mid-March. On March 13, 2020, President Trump declared a National State of Emergency in the U.S.; during the period between March 15 and March 24, 56% of shoppers who claimed to be very concerned about COVID-19 said they were shopping online more than usual as did 34% of somewhat concerned consumers.

With rising fears around COVID-19 making consumers wary of stepping out, many grocery stores are establishing new safety measures including larger online order pickup areas, special store hours, contact-less delivery, cashier-counter plexi-glass shields and 6-feet floor spacing indicators at registers. Some stores are also launching promotion strategies to encourage online and app-based shopping, such as select “buy one item, get one free” offers. In Cincinnati, OH, Kroger is even testing out pickup-only grocery stores, in which in-store shopping simply isn’t allowed.

Sales of dried, frozen and canned goods on the rise

According to Mintel research, between March 6 and March 12, almost 25% of adults reported they were stocking up on extra groceries and other supplies in response to the pandemic. This number is expected to rise as more shelter-in-place orders go into effect across the country and eventually flatten as people hunker down with what they have.

Despite the volatility, there are clear indicators of changes in not only consumer behavior, but also consumer preferences. As is typical during recessionary stock-piling, consumers are purchasing shelf-stable pantry staples and products that have a longer shelf life including canned, dried and frozen foods.

This is in direct contrast to recent trends, which had consumers shopping for “fresh,” “made with real ingredients” food and beverages and “shopping the perimeter” of the store—visiting the produce, dairy, meat and bakery sections. These consumers are now turning to dried, canned and frozen foods as they prepare to stay home for weeks at a time. This change could have a long-term effect on shelf-stable products if consumers continue to add them to their regular grocery lists even after the fears surrounding COVID-19 lift.

Consumers who typically buy fresh and artisanal products may not know how to work with the shelf-stable products they’re purchasing. This is an opportunity for brands to help consumers better get to know their products. Through social media channels, brands can showcase new recipes using their products and give consumers innovative ways to utilize shelf-stable products while staying put at home.

Nostalgic and indulgent categories experience a revival

During past periods of turmoil, financial downturn and other crises, consumers have typically stocked up on pantry staples, and the data above shows this is still true. But, while austerity is being practiced by many, we’re also seeing an increase in purchases of nostalgic and indulgent food and beverage. Because many North American consumers are now in a restricted living state with no set end date, they’re also stocking up on indulgent products such beer, soft drinks, chocolate and wine.

The below charts, using data provided by Nielsen, show how sales shifted as Americans became more aware of the possibility of COVID-19 affecting daily life.

Top 10 food and beverage categories, by U.S. projected sales in $USD Millions

Week ending 1/25/20

Category Sales
Beef 507
Beer 489
Soft Drinks 474
Chicken 448
Cows Milk 242
Energy Drinks 240
Chocolate 232
Still Wine 217
Cheese 206
Coffee 176

Week ending 2/22/20

Category Sales
Beef 529
Beer 508
Soft drinks 484
Chicken 438
Chocolate 290
Energy drinks 254
Cows milk 238
Still wine 230
Cheese 202
Coffee 180

Week ending 3/21/20

Category Sales
Beef 1042
Beer 740
Chicken 707
Soft Drinks 652
Cheese 373
Still Wine 350
Cows Milk 340
Chocolate 314
Water 311
RTE Cereal 307

A Datassential report from a similar period shows that dry, canned and frozen foods have moved into the top of the list as consumers stocked up, and that alcoholic beverages also appear in the top 10.

Consumers direct their focus to immune strengthening products

Because COVID-19 is a transmittable virus, immune health is top of mind for many consumers. Kerry research on proactive health conducted before COVID-19 found that 40% of consumers were already turning to food and dietary supplements to manage immune support. This number has grown in recent weeks, with consumers stocking up on products perceived to have immune benefits, For example, between February 22 and March 14, JungleScout reported Amazon had 21,471 more searches than usual for Emergen-C since stores were running low and consumers were taking their shopping online.

We’re also seeing consumers put an increased focus on managing sleep, stress and weight as their lives change due to new remote working conditions, childcare routines and general anxiety over health and finances. Sales of products such as nutritional bars and beverages are expected to spike. Because consumers already place great importance on functional benefits in food and beverages, there’s an opportunity for brands to launch products with added functionality such as immunity support and introduce existing products to a wider audience.

To learn more about how COVID-19 is affecting the food and beverage industry, including changes in consumer preferences and purchasing behaviours, visit Kerry’s COVID-19 resource page.

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