Food Market Escapes Impact of Tough Times

November 24, 2010

The US food market has done well the past two years even as the recession has negatively affected sales of many other product categories, according to new data from The Nielsen Company.

Food Unit Sales Grow

nielsen-food-unit-growth-nov-2010.JPG
Looking at Nielsen’s figures on unit performance in major US food, drug and mass merchandiser (FDM) categories during the 52 weeks ending October 2, 2010, overall unit sales across FDM categories remained flat. However, food categories such as fresh produce (3.5%), deli (2.9%) and beverages/alcohol (1.7%) registered moderate to substantial growth.

In comparison, during the same 52-week period, health, beauty & accessories (HBA) unit sales dipped 1.9%. Non-food unit sales shrank an even more precipitous 3.8%, and general merchandise unit sales plummeted 6.1%.

Dollar/Unit Sales of Restaurant/Celeb Chef Brands Grow Double Digits

nielsen-food-restaurant-celeb-chef-brands-nov-2010.JPG
Restaurant and celebrity chef-inspired food brands are growing both dollar and unit sales by double-digit rates . Dollar sales for a broad set of selected restaurant and celebrity chef brands are up 12.6% and unit volume is up 10.6% compared to 2008, with annual sales just shy of $4.75 billion. Nielsen advises that regardless of the economic situation, this is a great way for food manufacturers and restaurants to collaborate and extend the reach of known brands and drive sales at retail.

Online, TV, Reading Habits Indicate Food Interest

Nielsen says consumers are placing more attention on at-home meals and in-home entertainment options as evidenced by more time spent surfing cooking-related websites, watching food-related TV programming and reading cookbooks.

Nielsen reports that each month, food and cooking websites are visited by an average of 70 million unique online visitors, taking into account home and work online activity from year ending September 2010. The number of households tuned to the Food Network during prime time reached more than 1.1 million viewers in Q1 2010, an increase of 9% from Q1 2009. And as total book sales saw a year-to-date decline of 4%, cookbook sales rose 5%.

Strategies to Further Boost Food Sales

Nielsen offers the following tips on how retailers and manufacturers can capitalize on these trends:
1. Consider meal solutions for breakfast, lunch and dinner that leverage both center store and perimeter categories.
2. Collaborate on meal solution formats and arrange the store aisles so shoppers don’t have to walk the entire store to find one-stop items.
3. Leverage cooking classes and recipes both in-store and through multi-media (print, online, smart phone apps) outlets.
4. Try in-store and mobile demo and sampling stations so shoppers and consumers can smell and taste what you have to offer to drive a sale.
5. Cross-promote against complementary food and non-food categories to provide value along with solutions.
6. Look to social media sites to attract recipe ideas and feedback from shoppers or consumers and use banner or brand advocates for free promotion.
7. Explore celebrity chef or restaurant alliances to build equity with people who enjoy cooking.
8. Use advertising copy that embraces the joy of cooking and celebrations with family and friends. Be sure to make the brand or banner clearly visible and learn from the growing trend around reality video and leverage banner and brand advocates in ads.

Almost All CPG Companies Consider Collaboration Effective

Nielsen also recently conducted a survey of CPG companies which defined strategic customer collaboration as joint initiatives between manufacturers and retailers that go well beyond the normal course of business. These initiatives are designed to deliver impact in multiple dimensions: sales lift, cost savings, ROI, and the impact captured by the retailer.

Ninety-five percent of CPG manufacturers think their retail collaboration efforts have been either extremely effective (30%) or somewhat effective (65%). A mere 5% consider them somewhat ineffective, with no respondents considering them extremely ineffective.

Explore More Articles.

Marketing Charts Logo

Stay on the cutting edge of marketing.

Sign up for our free newsletter.

You have Successfully Subscribed!

Pin It on Pinterest

Share This