In a new report, "CPG 2011 Year in Review: The Search for Footing in an Evolving Marketplace", the market research organization said that although there has been constant discussion of the challenges facing consumer packaged goods (CPG) manufacturers over the past few years, it is not all doom and gloom. There is a sizable group of consumers who think that their financial situation is neither improving or declining, and some who are pessimistic, but there are optimistic consumers too, who are beginning to reopen their minds and wallets to new products and gourmet foods.
"It's no secret that conservative consumers are embracing a variety of money-saving behaviors, such as making shopping lists before entering a store," said John McIndoe, senior vice president at SymphonyIRI, and the research organization said that this applies even to optimistic consumers.
"Digital media will play an increasingly integral role in the pre-planning process and helping consumers find new ways to save in 2012. Like coupons, the internet is being leveraged as a list-making tool. Though penetration is much lower versus coupons, we expect it to rapidly and steadily increase this year," McIndoe said.
The challenge for food manufacturers is to shift their strategies in a way that appeals to this ongoing frugal consumer mindset, while also providing new products.
Among other tactics, the report said that companies should reassess their supply chains and be on the lookout for opportunities to lower costs, whether through innovative sourcing, packaging, or product sizing strategies. And they should also consider new product development opportunities in line with current trends, such as bringing restaurant quality products into the home.
"Home-based food and beverage rituals are quite prevalent today, as consumers look to trim expenditures wherever possible," the report said. "Noteworthy is the fact that several of the year’s fastest growing categories illustrate both of these trends—home-based (often portable) eating and drinking without significant price hikes."
To capitalize, food and beverage companies need to innovate to bring excitement to their category, while at the same time working to develop strategic pricing, it said.
Over the past year, the market research organization found that five of the ten fastest growing categories were beverage categories, including energy drinks, sports drinks, wine, ready-to-drink coffee and tea, and spirits/liquor.