What's in store for the CPG sector in the US?
September 2nd, 2021, Hoang Nguyen, Cheryl Kar

What's in store for the CPG sector in the US?

Consumer shopping preferences and habits were largely altered due to the pandemic. It’s no secret that CPG brands had to adapt to these changes rapidly and in the earlier part of this year, YouGov released a comprehensive International FCMG/CPG 2021 Report on how grocery shopping was affected and the transformations that took place across the world. Now, in this new phase of the pandemic, it’s important to understand which consumer behaviors are here to stay.

In a recent webinar, “What’s ‘in-store’ for the CPG sector? Consumer preferences beyond the pandemic”, YouGov’s host Chris Todd – VP of New Business Sales (US) – was joined by Gina Acosta (Executive Editor at Progressive Grocer) and Tyler Monroe (Associate Insights Manager, Molson Coors) to cast light on the underlying challenges and scope out the future of CPG brands beyond the first year of the COVID-19 pandemic.

What can brands expect in this new normal?

Brand loyalty was tested during the pandemic, but this gave way to brand discovery

Shortages in products and supply chain issues during the pandemic significantly affected consumer preferences leading to brand switching, recalls Gina Acosta, Executive Editor of Progressive Grocer. During this same period, many Americans struggled with finances amid lay-offs and changes to their working hours.

More than seven in ten grocery shoppers (71%) say they tried a new brand during this period, rising to 82% among grocery shoppers aged 21-34. YouGov dug deeper to understand the motivations behind this change in behavior and both price and availability of goods played a major factor in why people switch from the brands they typically buy.

“In terms of key categories where brand switching was more prevalent than others, paper products, cleaning supplies, personal care and hygiene products and packaged food [were more impacted]. However, I don't think there's really any category that has been immune from all of this brand switching that has gone on”, explains Acosta.

Shopping with new brands will likely stick around post-pandemic: 79% of grocery shoppers who shopped with a new brand say they will continue shopping with said brand over the next six months.

What other major CPG trends may persist one year on from the pandemic?

Data from a YouGov survey revealed that 74% of grocery shoppers changed their shopping behavior in one or more ways due to the pandemic. Across several of these changes, consumers expect to continue these behaviors in the next six months, including buying more fresh foods/produce, snacks, household supplies and alcohol.

The uptick in online grocery shopping during the pandemic will also stay, with 78% of consumers who purchased more of their groceries online during the pandemic saying they will continue doing so in the near future.

Alcohol: A hit during the pandemic

A standout trend that was observed during the pandemic was the increase in alcohol consumption. One in nine US adults of legal drinking age (11%) say they increased their alcohol consumption over the past year, rising to 16% among young Americans aged 21-34.

Of those who increased their alcohol consumption in the past year, 69% say this was predominately due to their drinking more at home now while one in five (19%) say it’s due to the rise in social occasions.

Looking ahead to the upcoming 2021 holiday season, 12% of Americans of legal drinking age plan to shop for and consume more alcohol this year compared to last holiday season, jumping to 20% among 21-34 year-olds. Those who plan to consume more alcohol this holiday season say they want to host more gatherings and parties (32%) or attend more events (29%) compared to last season.

Tyler Monroe (Associate Insights Manager, Molson Coors) observed this pent-up demand for “larger than life parties” may be more of a trend and that her focus will be on identifying the more “authentic” moments that come up during the holiday season. “[The Miller Lite team] wants to understand the things and events people hold dear to connect with consumers in a more intimate everyday way. People want to be around their loved ones, not just around the holidays, but year round and those authentic moments are the essence of Miller time.”

Consumers look at CPG brands as leaders in sustainability

Conscious consumerism will also be popular in 2022, given that a quarter (25%) of grocery shoppers say they will be environmentally minded about their purchases, and the same share saying they'll shop locally more often. Clubbed with regulatory pressures, innovations in packaging are also expected as brands try to meet these new demands.

“Especially towards the beginning of the pandemic, a lot of us had time to think about these things. A lot of introspection has taken place and consumers looked back to see what type of impact their choices have had on what’s going on right now”, remarks Chris Todd, VP of New Business Sales (US) – YouGov.

Talking of Molson Coors’ sustainability agenda, Monroe said, “In 2017, the company set new goals that are guiding our sustainability journey and we hope to set new standards for the entire industry. [By 2025] we have several goals to protect our water resources by doing more with less. We have already reduced water required to grow barley by 10.9%. We also aim at making our packaging 100% reusable, recyclable and compostable, and we are very close to achieving this goal. Another important goal is to achieve zero-waste landfill at 100% of our operation and plan to reduce carbon emission from our direct operations by 50%.”

The webinar also spotlights our experts’ opinions and insights into key CPG trends, including:

  • The rising consumer focus on health and wellness categories and labeling such as ‘better-for-you' products
  • The impact of supply shortages across CPG categories
  • How strategic partnerships between CPG brands, non-profits and charities can drive brand loyalty

Watch YouGov’s entire webinar on What's "in-store" for the CPG sector: Consumer preferences beyond the pandemic in the US here

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