The new normal that FMCG retailers and manufacturers expect after COVID-19

By Livio Martucci, Solutions Vice President, IRI Italy


In early April, IRI conducted research among managers based at manufacturers and retailers across 31 countries to understand how they thought FMCG might change in the “new normal” after COVID-19. The survey was completed by 600 people and in this blog post I’m going to share some of the key themes that emerged.

It was a truth almost universally acknowledged (in by all but 0.4% of those surveyed) that a recession does seem to be the most immediate outcome of the restricted lives currently being lived by most countries. There was some divergence though in how bad this is likely to be. Of those surveyed, more than half (57%) believed that we were heading to a relatively short-lived U-shaped recession running into the start of 2021. This was significantly higher at 71% amongst the Italian cohort. Over a quarter, 29% are more optimistic and believed that the recession is likely to be shorter, lasting around six months and 15% thought it could be three years or more.

When looking at the trends most likely impact their businesses in the future there were three key areas that stood out.

Shift to online as demand will remain strong

Online shopping has clearly exploded during the crisis, and this isn’t really surprising considering that people were told to stay home and those in the most at-risk groups had a strong motivation to buy their groceries online.

In Italy, online delivery is usually only 1% of the market but at its peak on 8th April this had risen by 221% year-on-year. This has been a consistent trend across most countries, for example France was up 94% compared to last year and Spain 84%.

In the UK, online was around 7% of the market pre COVID-19 but some suggest this may increase to 15%. Before the crisis delivery slots totalled 2.1 million across UK grocery but they are now to be increased to 2.9 million in order to try to meet the demand. The pressure this creates on the infrastructure of a business shouldn’t be underestimated.

When considering the future, online shopping and home delivery was the highest ranked in our survey as a trend that would affect business in the future. Of those asked, 35% felt that this was the single issue that would have the most change for their business. Although it isn’t clear how many people who have adopted online shopping for the first time during the crisis will keep it, it seems very likely that at least some will. A UCL study in 2009 found that it took on average 66 days to form a new habit, which isn’t far off the amount of time that many people will find themselves unable to leave the house during the pandemic.

Less eating out, more re-creating the experience at home

Most restaurants, cafes and bars have been closed during the lockdown period in each country, some have moved to a delivery only model and this has been made easier with the aggregators such as Just Eat and Deliveroo. Although it differs by country, a significant number of eating occasions are out of the home. The fact that this is no longer possible has forced a change in behaviour as people have had to fill these eating occasions with another option. Whether this means a growth in ready meals, home cooking kits or the ingredients to cook from scratch will differ by country. Of those surveyed nearly a third, 30% felt that less eating out would have a significant impact on their business in the future.

Focus on hygiene will remain and health concerns will imply more attention to food quality

Perhaps not surprisingly, health and hygiene have become a much higher focus for everyone during the pandemic. Just looking at sales of cleaning products for the home tells a story about how important this has become. Recently released figures from IRI show that across the biggest categories for the 52 weeks ending 12th April, sales of household cleaners are up by at least 40% compared to the year before across the UK, Italy, France and Germany.

Of those taking part in our survey, 22.8% believed that this was the most likely trend of the new normal life of people, although those who believed it would impact FMCG business was smaller at 14.6% which is surprising.

Indeed, the relationship to health will be even more important after the outbreak than it was before. Confronted for several weeks with illness, death and fear, reassuring the consumers on the quality of what they buy will be more than ever a major challenge. The obsession on quality will be back, in an amplified way, replacing the temporary fear of shortages.

Shopper behaviour has changed throughout COVID-19 and some of those changes will stick beyond lockdown. Not only have shoppers used different shopping channels but they’ve tried new brands, they have visited different stores and found alternatives to their out of home consumption. Now more than ever it will be important to understand those new consumer behaviours and shopping patterns in order to adapt to the new normal.






How can we help you supercharge growth and profitability?


95% of CPG, retail, and health and beauty companies in the Fortune 100 work with us

Answer the question below:
Is seven > than six? (true/false)