YEAR-END 2020 TRENDS, 2021 EMERGING GROWTH POCKETS - IRI

IRI Leader Board

YEAR-END 2020 TRENDS, 2021 EMERGING GROWTH POCKETS

Part January

22

2021

This report offers year-end updates to the 2020 Trends and Emerging Growth Pockets report. IRI will be updating this data on a quarterly basis.

2020 Year-End Update: COVID-19 and Associated Economic Fallout Had Substantial Impact on the CPG Demand Curve

Consumption Shifts

? Reduced mobility resulted in shifts to remote working, online school and streaming/virtual entertainment, all driving increased demand for at-home food and nonedible consumables in the US and globally.

? Reversing years of on-the-go convenience trends and foodservice capturing most of the food dollar, in-home consumption occasions sent consumers seeking inspiration and variety in food and drink; consumers also gravitated to larger pack sizes, long-shelf-life foods, comfort and indulgent items, as well as cleaning and home storage products.

? The pandemic spurred meal-making, giving fresh foods an 11% sales boost; meat sales, a top-dollar generator, are up 35%.

? Many brands, especially iconic brands, attracted a huge influx of buyers as many took to cooking at home (e.g., Generation X, Millennials)

? Despite an economic bifurcation, consumers of all income levels are driving more growth of premium and super-premium products. Health and wellness and self-care products are also experiencing higher demand.

? Persistent out-of-stocks numbed consumers to price or promotions; they purchased what was available.

? Consumers celebrated holidays and special occasions differently: smaller, virtual gatherings, stretched over a longer period.

Shopping Behavioral Shifts

? E-commerce, grocery, club and dollar channels emerged as key winners due to preference for convenience, basketconsolidation, minimal contact and reduced time spent in store.

? Merchandising and promotions were trimmed as retailers focused on social distancing, store cleanliness and safety.

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Since March, Reduced Mobility Increased Demand for Food-at-Home and Nonedible Consumables

CPG Edible and Nonedible % chg. vs. Year Ago

Dollar Sales

Total Omnichannel (MULO + C + Costco + E-commerce + Other Channels1)

Volume Sales1

8 w/e 2/23/20

21

4 w/e 4 w/e 4 w/e 4 w/e 4 w/e 3/22/20 4/19/20 5/17/20 6/14/20 7/12/20

32 30

17 13

23 16

16 8

15 7

4 w/e 8/9/20

14 8

4 w/e 4 w/e 4 w/e 4 w/e 4 w/e 9/6/20 10/4/20 11/1/20 11/29/20 12/27/20

12 6

12 7

12 7

12 8

11 6

EDIBLE

51

28 24

95

17 10

13 7

NONEDIBLE

13 7

12 6

9 3

11 6

13 9

13 9

10 5

1. Other channels from Panel include: Specialty Stores, Beauty, Pet, Health/Vitamin and Liquor. Estimated average omnichannel volume change across categories based on price/mix trends in MULO+C.

Source: IRI data ending 12/27/20. Omnichannel based on IRI MULO+C POS, IRI eMarket Insights and IRI Consumer Panel for Costco.

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Leading Categories of 2020 Reflect Highest Demand for Long-Shelf-Life Food, Health and Cleaning Products and Comfort Items (e.g., Baking, Candles)

2020 Top Growing Categories in Total U.S. Ranked on Dollar Sales % Chg. vs. YA

EDIBLE Category

$ % Change vs. YA

Premixed Cocktails/Coolers

59%

Powdered Milk

51%

Pizza Products

43%

Frozen Seafood

37%

Cocktail Mixes

36%

Asian Food

35%

Frozen Fruit

33%

Breadcrumbs/Batters

32%

Spices/Seasonings

32%

Dry Beans/Vegetables

31%

Categories in alcohol, frozen and shelf-stable meals, as well as baking, have sustained high growth since March.

NONEDIBLE Category

$ % Change vs. YA

Home Health Care/Kits

172%

Personal Thermometers

127%

Household Cleaner Cloths

73%

Soap

46%

Household Cleaner

39%

Bleach

38%

Gloves

35%

Candles

33%

Charcoal

31%

Sleeping Remedies

28%

Home health care, home cleaning and less traditional grocery categories like candles grew at the highest rates in 2020.

Source: IRI POS scanner data 2020 to-date ending 12/1/20. Among categories min $250M sales total US MULO+C.

Note MULO+C includes brick & mortar sales and e-commerce orders fulfilled by brick & mortar stores (e.g., Store Pickup, Instacart)

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Younger Generations Drove More Growth in Baking and Comfort Items While Older Cohorts Bought More Cooking Ingredients and Cleaning Products

2020 Top Growing Categories by Generation Cohorts / Ranked on $ per 1000 HH % Chg. vs. YA, Grocery Channel / Among categories where generation consumes average or more

Edible

Gen Z

1 Premixed Cocktails

2 Seafood - Fz

Spices/

3 Seasonings 4 Flour/Meal

5 Meat - Rfg

1

Home Health Care/Kits

2 Soap

3 Moist Towelettes

4 Candles

5

Household Cleaner Cloths

81% 42% 37% 37% 35% 586% 46% 43% 38% 36%

Millennials

Gen X

Premixed Cocktails 80% Premixed Cocktails 75%

Seafood - Fz

41% Flour/Meal

42%

Flour/Meal

40% Seafood - Fz

39%

Meat - Rfg Dough/Biscuit Dough - Rfg Home Health Care/Kits Soap

Moist Towelettes

Charcoal

37% Spices/Seasonings 35%

37% 552% 47% 40% 37%

Meat - Rfg

Home Health Care/Kits

Soap

Household Cleaner Cloths

Moist Towelettes

35% 600% 49% 38% 38%

Household Cleaner 35% Household Cleaner 35%

Boomers

Seniors

Flour/Meal

39% Seafood - Fz

33%

Meat - Rfg

38% Flour/Meal

30%

Seafood - Fz

Dough/Biscuit Dough - Rfg

Instant Potatoes

Home Health Care/Kits Household Cleaner Cloths

Soap

33% Instant Potatoes

33% Vegetables - Ss

30% Side Dishes - Rfg

491%

Home Health Care/Kits

61% Moist Towelettes

56% Gloves

29% 24% 24% 369% 36% 26%

Moist Towelettes

45% Household Cleaner 21%

Household Cleaner 31% Sleeping Remedies 20%

Nonedible

Source: IRI Shopper Loyalty database, based on sample of 65M households and 6M static Grocery households

Note: Categories filtered above 80 index to All HH.

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