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From pandemic panic buying to quality purchasing

Andrew Mitchell, Executive Vice President International, IRI, takes a look at Europe’s fastest growing categories during the global crisis over the last year

Andrew Mitchell, Executive Vice President International, IRI

In a year dominated by COVID-19, IRI looked at the impact of the pandemic on FMCG sales in Europe as consumers were forced to navigate various periods of lockdown and constantly adapt to changing circumstances, while also adopting new shopping behaviours and channels.

When it comes to the Fastest Growing Categories of last year, we can reveal the winners and losers across seven European countries – France, Germany, Greece, Italy, the Netherlands, Spain and the UK. While initial panic buying was evident in our data, this then led to a more measured approach as shoppers purchased products that offered better quality, value for money and long-life.

If we take a look at the key trends, we can see that with the transition from out of home eating to at-home food preparation and consumption, the frozen food category benefitted most, with double-digit growth across the board in terms of value and volume sales. Greece led the way with +17.6% growth, followed by the UK (+15.7%) and the Netherlands (+14.0%).

But as more people were forced to stay at home, due to restricted travel, and socialise less, demand for products like make-up and cosmetics fell, impacting sales in the personal care category. In Spain, personal care fell by 5.3% in value sales, while in the UK, it dropped even further, by 6.4%.

The predicted baby boom during the pandemic failed to emerge, it seems, impacting the baby category. Across most markets sales of products fell, including in the UK (-8.3%), Italy (-7.2%), the Netherlands (-6.8%), Spain (-6.7%) and Germany (-2.8%).

While some categories struggled, people occupied themselves in other ways, with many of us turning to home baking, perhaps for the first time. The trend for making banana bread and sourdough during lockdown resulted in a rise in key ingredients, including milk, eggs and flour.

But if we look at the real winners of last year, home hygiene and sanitising products were out in front by a long way. Take Greece where antibacterial gel rose by a staggering 2,228%, and Spain where hand sanitiser sales rose by 2,299%.

Retailers coped well in very challenging times, particularly in the early days of the pandemic when the focus was on ensuring products were in stock and in the right place at the right time. Manufacturers also benefitted. With more people working, cooking and eating at home, and with restaurants, cafes and bars closed for much of last year, there was a growing demand for premium cooking products and ingredients leading to increasing popularity of recipe-led subscription boxes. This provided opportunities for FMCG brands to adapt according to changing circumstances.

Looking ahead, with the re-opening of many places, including hotels and hospitality venues, particularly over the summer months, we are likely to see a drop in sales of baking and cooking items, as well as beer, wines and spirits as more people dine and drink out.

Over the next 12 months and with a predicted economic downturn, we could also see a widening gap between the ‘haves’ and have nots’ as shoppers are forced to adapt their spending in line with their economic circumstances.

Shoppers will expect value for money from their shopping baskets. As a result, we are already seeing a rise in promotions in some European markets as retailers look to keep existing customers happy, while luring back those who may have switched to other channels or other retailers over the last year. They will need to juggle the needs of cash-strapped shoppers with those who have more in the way of discretionary spending.

This blog follows the publication of European Supermarket Magazine’s (ESM) annual Europe’s Fastest Growing Product Categories report, using IRI data, analysis and insights in Issue 2 of the digital edition (subscription required): https://www.esmmagazine.com/features/esm-issue-2-2021-read-latest-issue-online-126238

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