Indicators and Trends from Q4 2017

Consumer Packaged Goods is an industry that has traditionally been used as a measuring stick for the economy. Everybody eats, so it has been the most relevant industry to track consumer trends.

As consumers now move away from processed foods, the industry no longer has the power or lure that it once did, but we can still learn a lot by studying the industry closely.

Nielsen recently launched their Q4 report for 2017. They always do a great job at providing the insight into what is happening with consumer-packaged goods. (also known as FMCG)

I have listed some of the Nielsen study findings that I felt were worth sharing.

They are as follows:

1.

Consumer confidence is up 9% in Canada and is up 15% in the U.S.

2.

Top 5 concerns among Canadians.

In 2016

29% said the economy

22% said food prices

22% said utility costs

In 2017

24% said food prices

20% said the economy

19% said personal debt

3.

Consumer good sales are now slowing. (not a surprise, but it is now a reality)

4.

Retail traffic in grocery is still in decline.

Some thought that it would be an insulated industry to some degree because of selection, freshness, etc..

That is not the case.

Boomers make 186 trips to the grocery store per year.

Gen X’ers make 147 trips to the grocery store per year.

Millennials make 116 trips per household to the grocery store per year.

You can see where this is going and why grocery retailers are quite concerned.

5.

Small food manufacturers are now driving the growth in CPG.

This is a problem for the big companies who are perceived as not being as fresh.

Attempts to purchase these smaller players now becomes even more of an expensive venture for the big companies.

6.

Consumer wallets are shifting to:

1.

online, 2. dollar stores and 3. warehouse clubs

7.

With

15% of all brick and mortar grocery retail purchases being impulse, and

another 1

4% being in store reminder purchases, you can see why the large retailers are even more concerned about the move to on-line, even if they retain the customer through their own on-line channel.

8.

E-

Commerce grocery is up 33% and Brick and Mortar is down 2%.

9.

The top on-line grocery purchasers are 1. OTC 2. Paper Products 3. Baby Care and 4. Food

10.

Meal kits in the grocery world are now considered a trend and not a fad due to their ever-increasing popularity.

11.

Doll

ar store growth continues but it’s customers are not what many people expect.

The leader in usage in this channel are households with an income of 70-100K/year which represents 25% of their total sales. This group is followed by household incomes of Over 100K/year or 16% of total sales.

Farewell,

Mike