Consumers upbeat for 2018
More than half of all consumers are feeling good about 2018, according to the latest IRI consumer confidence survey released Tuesday. Despite this stable outlook, consumers are still mindful about their spending and are turning to the Internet for money-saving opportunities.
“While consumer confidence has improved during the last few years, consumers can still be a bit shaky about their job and financial prospects, so we’re seeing some mixed signals in our survey results,” Susan Viamari, vice president of Thought Leadership for IRI, said. “Many, especially younger consumers, say they think the Internet provides money-saving opportunities, so we wanted to dig further and find out what role online shopping is playing in consumers’ CPG spending. Consumers are certainly not going to do all of their CPG shopping online, but marketers must keep in mind that 76% of all shopping trips begin online and 50% of CPG category growth is predicted to be online in 2018.”
As many as 28% of consumers say they buy grocery items online compared with 23% in Q1 2016. While it is no surprise that consumers look for the best possible deals online, how does this stack up by CPG category? Almost one-third of consumers (32%) are shopping online first for beauty and personal care options, 30% are shopping online for home care options, 21% are looking for OTC options online and only 20% are seeking food and beverage products online.
“While consumer confidence has improved during the last few years, consumers can still be a bit shaky about their job and financial prospects, so we’re seeing some mixed signals in our survey results.”
The IRI survey also revealed that consumers think shopping online provides the added benefit of reducing their impulse purchases. Overall, 51% of total shoppers say they make fewer unplanned purchases online.
Of course, convenience plays a big role in online shopping, with 20% of consumers saying it is easier to find needed grocery items online. By age, 32% of millennials, 28% of Generation X, 16% of baby boomers and 12% of seniors say they find items more easily.
Ordering online with in-store pickup (click-and-collect) provides convenience without the added shipping fee. While 40% of total shoppers like this convenience, 55% of millennials, 52% of Generation X, 36% of baby boomers and 25% of seniors specifically like click-and-collect options.
In the upcoming year, the Internet will play an integral and growing role in the CPG purchase process:
- 55% of consumers will download coupons from retailer/manufacturer websites;
- 51% of consumers will compare prices on retailer websites to find the lowest prices on needed items;
- 24% of consumers will order online for home delivery;
- 22% will order online and pick up in store;
- 12% will use online subscription services for some grocery purchases; and
- 6% will use online meal kit delivery services.
As e-commerce gains steam, consumers are looking for a variety of offerings that will enhance and/or simplify their shopping experience. Delivery — free and/or fast — is quite popular, but desires go beyond that, particularly among younger consumers.
“When consumers think about online CPG shopping, they have specific ideas about what is helpful in their lives,” Viamari said. “There really is no one-size-fits-all answer, so it’s critical to understand what it is that makes your key shoppers tick.”
Nestlé sells U.S. confectionery business to Ferrero for $2.8B
Nestlé will be selling its U.S. confectionery business to Ferrero. The $2.8 billion deal will make Tic Tac and Nutella maker Ferrero the third-largest confectionery company in the U.S. market, bringing under its arm a unit that had $900 million in sales in 2016.
“With Ferrero we have found an exceptional home for our U.S. confectionery business where it will thrive,” Nestlé CEO Mark Schneider said. “At the same time, this move allows Nestlé to invest and innovate across a range of categories where we see strong future growth and hold leadership positions, such as pet care, bottled water, coffee, frozen meals and infant nutrition.”
Along with a brand portfolio that includes such brands as Butterfinger, Wonka, Raisinets, 100Grand, BabyRuth, Crunch, SweeTarts and more, Ferrero will acquire three Illinois manufacturing facilities from Nestlé. The transaction excludes Nestlé’s Toll House baking products, which Nestlé said it would continue to develop. It also excludes the KitKat brand, which the company said it would continue to grow globally.
“We are very excited about the acquisition of Nestlé’s U.S. confectionery business, which has an outstanding portfolio of iconic brands with rich histories and tremendous awareness,” Ferrero executive chairman Giovanni Ferrero said. “In combination with Ferrero’s existing U.S. presence, including the recently acquired Fannie May Confections Brands and the Ferrara Candy Company, we will have substantially greater scale, a broader offering of high-quality products to customers across the chocolate snack, sugar confectionery and seasonal categories, and exciting new growth opportunities in the world’s largest confectionery market. We look forward to welcoming the talented team from Nestlé to Ferrero and to continuing to invest in and grow all of our products and brands in this key strategic and attractive market.”
Ferrero said it would continue to operate through its offices in Glendale, Calif., as well as other locations in Illinois and New Jersey. The two companies said they expect the transaction to close in the first quarter of 2018.
Post Consumer Brands unveils 2018’s new cereals
Post Consumer Brands is sharing the six new kinds of cereal it will launch by the end of the month, as well as additions to some of its existing brands and expanded distribution of certain varieties.
The company will be introducing Great Grains Coconut Almond Crunch, which contains coconut, almonds and wheat flakes, and which the company said is free of high fructose corn syrup, artificial flavors and artificial colors. Also hitting shelves is Post Grape-Nuts Trail Mix Crunch, which contains vanilla-flavored granola, cranberries, puffed barley and Grape-Nuts. Also hitting shelves will be Mom’s Best Crispy Cinnamon Rice, which the company said is gluten-free, as well as free of artificial flavors and colors.
The company also is adding three Malt-O-Meal cereal varieties, including Double Chocolate Brownie Crunch, Cinnamon Dyno-Bites and Golden Honey O’s
Cereals getting expanded distribution are Post Oreo O’s and Post Honey Maid S’mores, as well as the Mixed Berry, Cinnamon Roll and S’mores Bites varieties of Post Shredded Wheat, which launched in select stores last June.
“As tastes continue to evolve, we are happy to meet the needs of our consumers by offering so many great cereal options,” Post Consumer Brands chief marketing officer Roxanne Bernstein said. “Responding with desired flavors to meet family needs, while making them available at more stores across the country, is what we pride ourselves on.”