5 Charts That Show Why CPG’s Run Will Continue Well Into 2021

5 Charts That Show Why CPG’s Run Will Continue Well Into 2021

By  |  December 23, 2020  |  Uncategorized  |  No Comments

The pandemic has been tough on many businesses, but that hasn’t been the case for the makers of household cleaners and shelf-stable food. CPG manufacturers, from Procter & Gamble and the Clorox Company to Smucker’s and the Campbell Soup Company, have seen demand rise as restrictions on daily life have forced people to spend more time at home.

Earlier estimates predicted that the CPG industry’s dominance would end when the vaccine arrived. But as we approach the start of a new year, data shows the category’s streak is likely to continue well into 2021.

Here are five charts that make that case.

Where people exercise

With gyms closed, more people have begun working out at home. In November, for instance, Peloton revealed its number of connected fitness subscriptions rose 137%, year over year, to more than 1.33 million.

Turns out, people like this arrangement.

According to a recent report from venture capital firm Coefficient Capital and online publication The New Consumer, 66% of consumers who’ve switched to exercising more often at-home following the outbreak say they prefer it over their old routine. This bodes well for CPG manufacturers, as more time working up a sweat at home means less opportunity to pick up a salad during the trip to or from the gym.

Where people work

On a similar note, the spike in remote work entails a drop in commuters heading into the office. The shift has been a boon for the CPG industry, as it means more people brewing their coffee at home and cleaning up any spills with a paper towel.

Figures from analytics firm Placer.ai showing foot traffic to a sample of office buildings in New York City illustrate the change. In late March, numbers dropped nearly 100%. They’ve remained far below typical ever since.

There’s reason to believe the work-from-wherever trend will persist. A September poll from Gallup found that almost two-thirds of U.S. workers who have been working remotely throughout the pandemic would like to keep doing so when restrictions lift, either out of personal preference or concern over Covid-19.

“As we take a step back from the day-to-day dynamic, we see consumer behaviors evolving in ways that we think will stick beyond the pandemic,” Jeffrey Harmening, CEO of General Mills, said during an earnings call in mid-December. “Many consumers have told us that they’re enjoying the benefits of home-centricity in their lives, including flexible work environments, more family time and more balance, driving a better quality of life.”

How people budget

While some people work remotely, others are out of work. In April, the country’s unemployment rate jumped to a record-breaking 14.7%. The amount of people still looking for a job remains elevated.

Until the economy bounces back, plenty of consumers are likely to save money by avoiding restaurants.

“What we’ve learned from past recessions is that the first and most significant way consumers economize in their food budget is by eating more at home,” Harmening said. In its latest quarter, with many restaurants either closed or operating at limited capacity, General Mills reported net sales increased 7% to $4.7 billion.

Where people invest

With no place to go, people have poured money into improving their homes. Sales have soared for retailers Home Depot, Lowe’s and Ace Hardware. Data from cross-platform measurement company Comscore reveals that traffic to home furnishings sites has surged, too. In May, the category experienced 133 million unique visitors—the highest ever.

About the Author: Paul Hiebert

Leave a Reply

CommentLuv badge