Consumers have all been met with empty shelves at grocery store over the past weeks as most states are under stay-at-home orders. Or the grocery store might have the product but not the brand a consumer would traditionally purchase.
Availability and Price Factors
Consumers in the current economy are having to base their decisions on factors other than brand loyalty, health or other traditional factors. Currently, availability and price are bigger factors than ever before. Private labels are seeing success in the COVID-19 economy with certain research studies showing that growth in use of private label is tracking at five-percent higher than national brands. The expectation is that 25 to 30 percent of the consumers trying new private label brands are likely to continue to do so when shelter in place requirements cease.
These changing behaviors are also impacting the restaurant and retail sectors of the food and beverage industry. History shows that when consumer behaviors change due to short-term issues in many cases those changes impact permanent behaviors. Between restaurant closures forcing us to order only takeout or delivery and the sharp increase in online ordering of food products, consumer behavior is shifting, and this will likely continue even after life gets back to normal.
As an example of this shift, data from Rakuten Intelligence shows that online orders for a sample of grocery merchants rose over 200 percent for the period of March 12 through March 15 over the same window in 2019.
Looking to the Future
Smart food and beverage companies will find ways to take advantage of a rapidly shifting marketplace.
If companies are seeking guidance in navigating the fluctuating economy, please contact Green Hasson Janks Food and Beverage Team or to view COVID-19 resources and business updated, please visit the Green Hasson Janks COVID-19 Resource Center.