The COVID-19 pandemic fundamentally shifted consumer behaviors in the U.S. and its likely it will take months for buying habits to return to where they were before the pandemic.
Meagan Nelson, the associate director of the fresh growth and strategy team at Nielsen, shared her insights into consumer behavior before and after the global pandemic arrived in the U.S. in March 2020. She spoke on June 10, 2020, as part of WATT Global Media’s 2020 Chicken Marketing Summit webinar series. It was the fourth in a series of seven webinars proudly sponsored by Zoetis. The webinar will be available to view on demand for free and free registration for future webinars is open now.
COVID-19 changes the landscape
In March 2020, the COVID-19 pandemic arrived in the United States and in the following weeks and months, the country was thrown into an unprecedented lockdown situation. Four months later, the disease is still present and many social distancing restrictions are lifting, but Nelson said the changes consumers made during the lockdown may be permanent.
Between February and March 2020, consumer trends from 2019 were turned on their head. Americans who’d steadily been trending toward eating out more than eating at home were forced to adjust as schools closed and many restaurants reduced services. In March 2020, shoppers hurried to brick and mortar retailers to stock up on non-perishable and frozen food in anticipation of extended stay-at-home orders. Restaurants saw business drop by as much as 66% while grocers saw business increase by as much as 75%. In the store, nearly every sector saw strong sales increases and shoppers uniformly decided fresh meat was essential.
During that period, many shoppers tried new services – such as Instacart – which allow users to place orders for groceries and have them delivered to their home or picked up on the curb near the store. In April 2020, Instacart was the biggest winner and even overtook Amazon for the largest portion of e-commerce consumer packaged goods market share, but other retailers saw their e-commerce business increase, too.
COVID-19 and chicken buying habits
Specifically, for chicken, in the twelve weeks proceeding the week of May 23, 2020, demand for chicken meat was up by 26%. About 60% of that growth was centered on fresh meat. There was also, Nelson noted, a shift back to basics with consumers going back to old standbys – breast meat, legs and drumsticks – which reversed the pattern seen in recent years of shoppers picking more dark meat cuts.
Consumers also spent significantly on frozen chicken parts and processed chicken tenders and or nuggets, strips and popcorn chicken all performed well. Nelson said that could be both the desire for comfort and convenience coming into play as the nation’s children stayed home and parents chose a product like what is served at school.
Shoppers didn’t change their behavior toward chicken making claims, however. Nelson’s research showed that 66% of chicken sold is still conventional and 34% carries a sort of production claim. The claims “antibiotic-free,” “natural” and “hormone-free” were the most popular. She did say that claim chicken did lose 1 percentage point of market share since the pandemic began, however.
Now that society is opening and people are adopting a somewhat more relaxed attitude about COVID-19, it remains likely that the consumer trends of 2019 will not return instantly. But rather, Nelson said she expects it will take anywhere from eight months to a year for that to happen.
People will keep eating and chicken, because of its competitive price point, will continue to be in demand. However, retailers must consider how the economic situation has changed for many Americans and how the popular perception of what is a safe or healthy choice may have changed because of the outbreak.
In the past, consumer sentiment fell during moments of crisis and took a long time to recover. According to a Nielsen survey conducted in April 2020, 54% of consumers said their amount of home cooking was impacted by the pandemic and 65% said their amount of dining out was impacted. The same survey said 53% of consumers expect their home cooking to be impacted for at least four more months and 48% said the same thing about dining out.
Some behaviors, she said, may have changed and will never go back and its now up to the retailers to figure out how to leverage those new behaviors to their advantage. Its up to marketers to consider their specific audience, how their behaviors were changed during the lockdown period of the pandemic and what that means to their business. For some people, things are already back to normal and for others, things may never be the same.
Four strategies for the future
Nelson advised retailers and marketers to consider the following four factors going forward in the post COVID-19 world:
- Consumer segments: Consumer needs are changing due to health or economic circumstances, which could contribute to growing disparity among groups. Retailers and marketers need to understand their business sector and where their consumers are.
- Price sensitivity: Shoppers will look for savings and prioritize price more in the future. Optimize a pricing and promotion strategy to take advantage of this.
- Supply chain barriers: There will be more interruptions. Create and implement demand planning strategies to ensure a stable supply chain to satisfy customer needs.
- Adapting to online: E-commerce is the new normal and is now a fundamental part of commerce. Retailers must adjust their technology strategy to ensure they are able to provide the services consumers demand like scheduled and same day delivery.
View our continuing coverage of the coronavirus/COVID-19 pandemic.
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