Immediate, Long-Term Impact of COVID-19 on the Consumer Packaged Goods Industry
Uncertain times require warp-speed decision making from company leaders
The CPG industry has never been under more pressure as it faces a global pandemic, an impending recession, soaring unemployment, ubiquitous social distancing and unparalleled consumer fear across the US. For an industry largely accustomed to glacial change, these are unnerving times requiring warp-speed decision making. William Blair and IRI’s Growth Consulting practice have partnered to examine the most critical drivers currently affecting the CPG industry.
• The COVID-19 crisis has made it clear that consumers will shift channel behaviors during pantry loading, especially when there are high incidences of stock outs.
• Pantry stocking occurred earlier in mass and club channels but is now occurring across channels, and the drug basket has increased consistently
• Consumers now have a heightened concern for personal and family safety and are stocking up on many self-care products. We anticipate that this will be one of the long-term impacts of the COVID-19 crisis, with consumers spending disproportionately in these categories in the future.
• We expect consumers to experiment with new foods and to buy indulgence items, in part because of the inability to dine out, but also as a way to find small joys throughout their day.
Companies should use the coming weeks to refine their growth strategies, enhance engagement with consumers, capitalize on trial stemming from new consumers entering their brand franchises and categories, and never lose sight of the important fundamentals of building robust, demand-driven growth strategies.