DECEMBER 2004 Times & Trends Executive Summary:
SHOPPERS SHIFTING GEARS DECEMBER 2004    Consumers Making "better-fro-Me" CPG Shifts   

Times&Trends reviews new developments and critical events across all major CPG categories, key channels and all consumer groups, providing powerful benchmarking insights to help guide strategic decisions.

This month’s subject is a recap of Times & Trends 2004 series on Shopping & Wellness Trends. Everyone is aware of shoppers shifting to value outlets and to value shopping in recent years, But, consumers are also shifting gears in their shopping behavior to support changes in their attitudes and lifestyles toward healthier “better-for-me” living or wellness, toward aging and managing their various conditions that come with aging and toward more effectively and efficiently managing the day-to-day tasks in every way, from cleaning to shaving to caring for their pets. In a time when life seems out-of-control and full of stress, important shopping shifts are taking place designed to reduce stress and take control.

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

Here’s a summary from the brief:

Shoppers are moving from low-carb to better nutrition & fewer calories and shifting some beverage consumption from sugary drinks to more functional drinks.

Low-in-carb foods lead growth over the past two years – however, the carb-craze appears over as consumers look for better nutrition & less calories. Worried about obesity and over-weight, shoppers took to cutting carbs. As recent as July, 2004, the Gallup Poll reported that 27% of the American public were actively avoiding carbs, gravitating to naturally low-in-carbohydrate categories like natural cheese, poultry and fresh eggs to fill diet and nutritional needs. Comparing shopper spending in the year through third quarter, 2004 to 2002, these three items led in absolute spending growth (projected nationally from IRI’s home-scanner based shopper panel) over two years.

The low-carb craze appears to be shifting to “less-of” foods – namely less calories & fat – that provide solid nutrition, but not all of the “bad stuff” that became associated with the low-carb diet or indulgent consumption. Items that fit this “better-for-me” description include yogurt, portable wellness bars (like granola bars), nuts (like almonds & walnuts, with “good” fat) and salad kits (particularly spinach leaf).

Shoppers also are shifting some beverage consumption from sugary drinks to more functional drinks. Refrigerated soy milk, energy drinks, sport drinks and bottled water – perhaps the “perfect” functional beverage – are growing in popularity. Low-cal or diet soft drinks and light beers have been for some time the growth segments of the huge carbonated soft drink and beer categories. While they continue to grow, their pace is not as aggressive as more functional beverage options, like Gatorade.
 

In the year ending September 5, 2004, comparing store scanner sales from IRI’s InfoScan national sales databases to just a year ago, shoppers are gravitating to low- or reduced-calorie products, more than “diet designer” substitute products like weight control or liquid protein products and weight control candy or appetite suppressants.

Shoppers in 2005 more than ever will look for better nutrition and functionality and fewer calories to live healthier and lose those unwanted pounds.

Shoppers are responding to new technologies & innovations in a number of non-food areas, particularly affordable, enhanced medications, aging creams and heat packs.

New, affordable innovations help manage life and aging conditions. Rx migrations to OTC spur millions in “better-for-me” health care growth.

Shoppers shift to known, affordable and category-enhancing options that no longer require prescriptions. In the past two years, enhanced OTC allergy relief (made possible by Claritin and Alavert OTC migrations) and enhanced heartburn relief (Prilosec OTC) have resulted in substantial growth – two of the top ten non-food growth categories over the past two years.

When it comes to shaving, shoppers shift from last year’s innovation to this year’s miracle advancements. Three to four blades, battery enhanced shaving, lubricated strips – what will competition come up with next? It has kept the razors and blades categories growing.

House care gadgetry fosters growth. Shoppers spark to the latest conveniences – plug-in air fresheners with fans or disinfecting, disposable cleaning cloths – that provide a little bit of affordable “luxury” with functional effectiveness. Adding control and effectiveness benefits to life’s daily chores leads to growth and category shifts.
 

The Grocery channel had exceptional success with razors and air fresheners. Drugstores accounted for large shares of growth in several health care and personal hygiene growth categories, notably vitamins. And mass merchandisers achieved the largest share of household cleaner cloths growth. Shoppers spread their purchases around, responding to deals and values encountered in every trip in every outlet. Value shopping is not just at value outlets.

IMPLICATIONS

Important shopper shifts are taking place.

There’s the “value” shift between outlets, categories and within categories – between traditional and value stores, between “foods we like” or between “brands we like” based on offers like “buy one, get one free, everyday-low-price and 33% off regular price.” Consumers are looking for the best prices in every trip and willing to make shifts.

There’s the “wellness” shift between foods & beverages that are now more acceptable toward healthier living and foods & beverages that cater to “I deserve it” living… lifestyles based on indulgence and pure enjoyment. Shoppers are looking for ways to live healthier, including what they eat and drink.

There’s the “aging” shift to new items designed to support the aging process. Shoppers are looking to affordably and more effectively manage their ailments or their aging issues. They are shifting to new innovations in an effort to gain control and conveniently manage their conditions. Heart burn relief, heart healthy cereals, wrinkle-reduction creams and heat packs are taking advantage of this. Many brands are being retooled and repositioned to connect with large-scale aging ailments and conditions like heart, allergy and overweight or obesity conditions.

And, there’s also the “innovation” shift. Shoppers are shifting loyalties within many categories, responding to new innovations and technologies. Personal hygiene, cleaning product and pet food growth within categories is dependant on innovation and consumers shifting to new, higher standards of expectation.

The challenge to both retailers and manufacturers in 2005 will be to better connect categories, brands and merchandising strategies to shoppers’ “better-for-me” shifting priorities, to build and test shopper-centric programs that support these shifts and to monitor and adjust changes in marketing and value strategies as shoppers make new shifts in attitude and behavior.

Information and insights on shopper shifting will play key roles.
 

Source: IRI's Times & Trends Reports
Information Resources, Inc is a leading provider of UPC scanner-based business solutions to the consumer packaged goods industry.