Times & Trends Special Report:
Impact of Hurricane Katrina

Report Four: One Month After

IRI's Times & Trends highlights new developments and critical events across all major CPG categories and channels, delivering powerful benchmarking data to help guide your strategic decisions. This special edition of Times & Trends provides an in-depth analysis of consumer purchase behavior and product pricing in the Gulf Coast region, surrounding states as well as the total impact nationwide during the week before and one month after Hurricane Katrina. This report is the final in a four-part series.

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

Introduction

The Hurricane Katrina tragedy has prompted many CPG manufacturers and retailers to re-examine their disaster plans to ensure that consumer needs can be effectively and efficiently met in times of crisis.

Based upon an extensive analysis of purchase behavior before and after Hurricane Katrina, this four-part series has provided guidance to the CPG industry in three critical areas with respect to disaster planning: demand planning, consumer education and pricing strategy.

This fourth and final report summarizes learning in each of these areas, provides an update on market changes during the third and fourth week following Hurricane Katrina, and highlights recommendations for industry disaster planning efforts.
Key Findings

  • Hurricane-related total CPG demand followed a three-phased cycle.
    Consumer purchases across CPG product categories in response to Katrina occurred in three phases: preparation in which consumers stocked-up on hurricane supplies (e.g., shelf-stable food and beverages, batteries and flashlights) and decreased focus in other categories; replenishment in which critical basic necessities lost in the hurricane (e.g., personal care products as well as food and beverage items) were purchased; and adjustment in which growth rates approached normal levels or declined across many categories.

  • Demand cycles varied slightly across categories as consumers broadened their purchase mix over time.
    Sales across categories providing the most basic food and beverage needs (e.g., bottled water, canned meat) peaked one week earlier than other categories offering more variety (e.g., aseptic juices, shelf-stable dinners). Demand spikes occurred earlier among non-food supplies (e.g., batteries) versus food and beverages.

  • Gulf Coast purchase behavior prior to Katrina highlights potential educational opportunities to ensure consumer preparedness during future disasters.
    A comparison of Gulf Coast product purchases versus American Red Cross recommendations suggests that while consumers were well-aligned with recommendations across most food, beverage and power outage supply categories, they may have placed too little emphasis on other critical product needs (e.g., healthcare, baby care).

  • National retail pricing impact still not evident across total CPG.
    Expected retail price increases resulting from Katrina-related higher fuel costs are not yet evident across the board. However, pricing across individual product categories -- particularly those that are petroleum-based -- should be carefully monitored.

     

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Source: IRI's Times & Trends Reports
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