IRI's Times & Trends highlights new developments and critical events across all major CPG categories and key channels, providing powerful benchmarking data to help guide your strategic decisions.

This month's issue highlights the impact of the U.S. recession on CPG food and beverage sales across supermarket, drugstore and mass merchandise (excluding Wal-Mart) channels. Next month's issue will provide an in-depth review of CPG shopper channel migration.

This free summary is also accessible via the GMA Web site  at http://www.gmabrands.com/publications/gmairi.cfm

We hope you enjoy this issue and look forward to hearing your feedback.

CPG sales growth softens.
The CPG industry is clearly feeling the pains of recession. Total CPG food and beverage dollar sales growth dropped to 2.2% in 2002 versus 3.5% growth in the prior year. Non-foods have been hardest hit, with sales moving into decline. Consumers are feeling the pinch and continue to forego or spend less on "non-essentials."

CPG Industry Sales Across Supermarkets, Drugstores and Mass Merchandisers. (Excluding Wal-Mart)

Both manufacturer and private label brands are impacted.
In 2002, both manufacturer and private label food and beverage dollar growth across supermarket, drugstore and mass merchandise (excluding Wal-Mart) channels experienced the slowest growth rates in four years. However, despite consumers' more cautious spending, manufacturer brand dollar growth outpaced private label. Many price-sensitive shoppers have opted to shift spending to discount outlets, where they can buy national brands at low prices, rather than increase their spending on store brands.

Products offering convenient meal solutions are spared from consumers' budget cuts.
Across CPG departments, frozen foods continue to be a top performer-earning 3.7% dollar sales growth in 2002. Frozen dinner solutions, including all-in-one skillet dinners and heat & eat bowl dinners are addressing consumers' growing need for convenience, a benefit that consumers are willing to pay for even when the economy is struggling. In fact, the top ten "dinner solution" categories grew $8 billion over the past five years at an average annual rate of 9.1%.

A renewed focus on dieting fuels strong growth rates in products with weight management benefits.
The intense press coverage of America's obesity epidemic has not been lost on consumers. After a few years of sales declines, sales of "light, lean and less of" product categories rebounded in 2001 with continued strong sales increases in 2002. Weight loss benefits, more so than reduced fat content/heart healthy benefits are driving this growth. Sales of reduced fat content and fat free brands have declined 8.8% in the past four years.

Nutrition and energy bars strike a chord with consumers.
IRI's recent study, What do Americans Really Eat, revealed that more than one-third of Americans regularly skip meals. Snack bars fill the gaps for these time-crunched consumers. Innovation is driving this category to new heights by delivering nutritional alternatives to traditional snacks that can serve as "meal replacements." Led by "nutritional/energy/health" bars, which grew 38% over the past five years, the snack bar category has increased 12.9% per year, on average and represents continued growth potential.