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FMCG categories remain resilient during Covid-19

Covid-19 | Kantar Worldpanel

FMCG categories remain resilient during Covid-19

Larger brands outperform category growth rates

FMCG categories remained resilient during the Covid-19 lockdown period, with brand performance linked to category performance.

Major brands are five times more likely to grow in FMCG categories that were growing compared with FMCG categories were declining. Short-term price promotions helped drive brand growth even in slow-growing or declining categories.

Although the long-term repercussions of Covid-19 on FMCG are not yet clear, consumer preferences and behaviors regarding FMCG categories and brands changed during the Covid-19 lockdown period, in at least three ways:

  1. People shopped less often, while buying more per visit.
  2. Personal care routines paused because of fewer visits to the workplace and social interactions.
  3. Digital accelerated, with e-commerce challenging physical stores and home delivery replacing out-of-home consumption.

These global findings emerged from the Kantar Brand Footprint 2020 report and are based on a measurement of brand choice called Consumer Reach Points (CRPs), the number of times shoppers choose a brand during the year.

Performance by category

How an FMCG category performed during the lockdown period roughly depended on how it fit into one of four groups:

Covid-Related: This group of categories, directly linked to hygiene, experienced an increase in demand. (Example: CRP increased 44 percent for household cleaners in the UK.)

In-Home Occasion: Experiencing increased demand, this group of categories included food and drink that, in normal circumstances, people would consume in restaurants or bars. (Example: CRP increased 27 percent for beer and lager in the UK.)

Short-Term Stockpiling: Essential categories with a long shelf life belong in this group, which enjoyed an early surge in demand. (Example: CRP increased 8 percent for fabric detergents in the UK.)

Reduced At-Home Consumption: This group contains personal care categories and other non-essentials that declined in demand. (Example: CRP decreased 6 percent for deodorants in the UK.)

Within each of these examples, bigger brands outperformed smaller brands. While CRP increased 44 percent for household cleaners overall, the CRP for the Top 5 household cleaner brands increased 61 percent. Similarly, CRP for deodorants declined 6 percent for brands overall but only 3 percent for the Top 5.

In UK, four out of the Top 5 beer and lager brands outperformed the category CRP increase of 27 percent. Fosters and San Miguel, up 55 percent and 50 percent, respectively, led the high performers, followed by Budweiser, with a 39 percent increase, and Stella Artois, which rose 33 percent. In fact, 12 of the Top 15 beer and lager brands outperformed the category, showcasing the potential for lots of winners when there is a long tail of sizeable brands.

Along with brand size, one other factor—marketing investment—determined whether a brand outperformed its category in CRP growth. After the period of short-term stockpiling, CRP declined for most UK fabric detergents.

For Persil, which continued its price promotions during the lockdown period, CRP increased 23 percent compared with 8 percent for the category overall, illustrating the importance of short-term marketing levers during a period of less demand.

Conclusions

The key conclusions from the Covid-19 analysis in the 2020 Kantar Brand Footprint report are:

  • The biggest brands were winning during the Covid-19 lockdown period, especially within growing categories that experienced a surge in demand.

  • Traditional marketing levers remain important to ignite demand in certain categories, indicating that it is still possible for a brand to win in a slow-growing or declining category.

  • Brands need to be especially alert that people are trying new things, whether it is a new retail channel, new cooking and eating routine, new personal care routine, or new brands.

  • While adjusting for immediate trends, it is important not to underestimate the impact of new consumer patterns that will emerge post-lockdown.