A study of more than 354 brands across 34 product categories has some disturbing news for the nation’s big food, beverage and household brands: Roughly 73% of consumer packaged goods (CPG) categories show an overall decline in their brands’ “must-have” status — meaning that shoppers would purchase whether on sale or not.
That doesn’t necessarily mean smooth sailing for the other guys. The Deloitte annual “American Pantry” study also showed a drop in store brands’ appeal, improved consumer perceptions of the economy, and shoppers’ willingness to pay a premium for attributes such as health and convenience. This could signal a turning point that is set to further disrupt the CPG industry after years of consumer caution.
“This is a critical moment for consumer product companies,” said Barb Renner, vice chairman, Deloitte LLP and US Consumer Products leader. “While the majority of consumers say they are committed to sustained frugality year after year, our findings point to early signs that they may finally be responding to a belated but increasingly strong economic recovery.
“It creates tremendous opportunities and risks for companies in this sector, given households’ lack of commitment to national brands brought on by years of stretching dollars to the limit,” she noted, adding, “Brands that get things right can use the economy’s momentum to regain their place on consumers’ shelves, but those that move too slowly could very well be left behind.”
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