Weekly Update on Dairy Deli Bakery Retail Trends during COVID-19 - PowerPoint Presentation

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Weekly Update on Dairy Deli Bakery Retail Trends during COVID-19

IRI, IDDBA & 210 Analytics

Jonna ParkerTeam Lead, IRI Fresh Center of Excellence

Week Ending 04/19/2020

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What Consumers Are Saying

Slide3

COVID-19 mortality, unemployment rates climb; likely scenarios for

CPG demand evolution

Source: IRI Survey 4/3-4/5 among IRI Consumer Network™ Panel representing Total U.S. Primary Grocery Shoppers / https://coronavirus.jhu.edu/map.html

>1.0MM

U.S. COVID-19 Cases

54,000 deaths in the U.S.

~3.0MM+

Global COVID-19 Cases

as of April 27

Virus Effectively Contained

Significant stockpiling drawdown in Q2; potential

reversion to new normal consumption trends by Q4

CPG Consumption – Monthly YoY Growth

Another Virus Spike in the Fall

Stockpiling drawdown in the Summer before

another major stockpiling run in the Fall

CPG Consumption – Monthly YoY Growth

and it’s wiping out all jobs created since the Great Recession

Filed for Unemployment in the Last 4 Weeks

24MM

Americans

Likely Scenarios for CPG Measured Channel Growth

*

*

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More than one-third of consumers will spend CARES stimulus money

on groceries and household essentials

Housing, Food Among Top Plans for Money Received

from Coronavirus Aid, Relief & Economic Security Act

to pay rent, mortgage, taxes, or utilities

48%

to buy household items; clothing

10%

to pay healthcare bills; caregiver expenses

12%

to buy more groceries and other everyday

HH essentials

35%

to add to my savings or investment accounts40% Source: IRI Survey 2020, among IRI Consumer Network™ Panel representing Total U.S. Primary Grocery Shoppers / Total Wave 5 – April 10-12. / Base 653Q. What are the main ways you expect to use the money you receive from the government stimulus / economic relief plan? 60% expect to receive stimulus money30% aren't sure if they'll receive money10% don't anticipate receiving money

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Source: IRI Survey 2020, IRI Consumer Network™ Panel representing Total U.S. Primary Grocery Shoppers, April 10-12, 2020. / Total Wave 5 – April 10-12. / Base 1,094

Q. Please think about the package sizes you've been purchasing during the past month. Have you chosen different sizes of foods and beverages than usual?

Switched to larger pack sizes because I've been buying more of my groceries at Club stores than I did in the past (i.e. Costco, Sam's Club, BJ's)

12%

Switched from single-serve items to larger package sizes of foods / beverages because I wanted to stock up

on larger quantities

to last a while

12%

Bought fewer

single-serve foods / beverages because I'm not eating / drinking while on-the-go or away from home as often

7%

Bought fewer single-serve foods / beverages because I haven’t

been shopping at Convenience Stores or Drug stores as often

5%Switched from single-serve items to larger package sizes of foods / beverages because they are a better value8%Recessionary behaviors are just starting to take hold; One-third of shoppers have made purchase changesDuring the Great Recession, consumers bought more private label, tried lower-priced brands, bought smaller quantities of favorite treats, and generally cut back spending on non-essential groceries. Consumer responses indicate these behaviors are just starting to emerge.

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c

Working from home has become the norm for more Americans;

Will it remain that way for at least some?

25% are working from home more often rather

than going to an office due to COVID-19

After stay-at-home restrictions end, those who have been working from home more plan to:

Source:  IRI Survey 4/10-4/12 among National Consumer Panel representing Total US Primary Grocery Shoppers

19%

Work from home a little more

often

than I did before COVID-19

63%

Return to my usual schedule

for work location 18%Work from home much more often than I did before COVID-19

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Two important COVID-19 trends: “

insourcing

” and “do-it-yourself”

Be a helping hand and provide recipe inspiration

Changes in consumption patterns lead to sales surge in:

Air fryers

Bread machines

Coffee makers

Mixers

Pizza ovens

Pressure cookers

Instant pots

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Easter celebrations were very different and plans for Memorial Day signal

lighter demand for summer holiday products

Totals do not equal 100 due to rounding

Source:  IRI Survey 4/10-4/12 among National Consumer Panel representing Total US Primary Grocery Shoppers

Will Likely Spend Memorial Day in a Similar Way as Last Year

Don’t Know

19% Hosted or Attended

a Party Last Year

13% Traveled Last Year

3% Other

Different Plans This

Year Than Last Year

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What Shoppers Are Buying

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Since March, more grocery spend has shifted from weekends to weekdays

Share of spend on weekends (% Spend on Saturdays and Sundays)

2-9-2020

2-16-2020

2-23-2020

3-1-2020

3-8-2020

3-15-2020

3-22-2020

3-29-2020

4-5-2020

Source: IRI proprietary models, U.S. grocery retail

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LEGEND

Consumers have shifted from stocking up across total store to focused purchases of F&B; Fill-ins include fresh and frozen to offset pantry items

$ % Change vs. YAG - MULO

Jan 6 to Mar 1

W/E

Mar

8

W/E

Mar 15

W/E

Mar 22

W/E

Mar 29W/E Apr 5TOTAL STORE1.4%12.6%67.9%62.5%15.5%18.0%Total Nonedible1.0%19.6%61.3%43.0%2.3%0.3%Total F&B1.6%9.0%71.4%73.1%22.6%27.3%Paper Products2.9%60.1%212.7%96.5%40.2%33.5%Home Care3.5%41.5%103.6%75.5%21.7%14.6%OTC Healthcare5.1%26.2%73.6%62.9%6.1%-0.3%Personal Care2.8%19.8%50.7%35.8%-4.1%-5.8%Pet Food + Care3.1%7.5%40.1%37.5%-6.0%-6.0%Gen Merchandise -2.0%7.5%23.2%21.1%2.5%5.1%Cosmetics-0.1%4.1%9.2%-4.7%-21.3%-15.4%Beverage2.1%13.0%60.1%48.8%8.3%11.6%Packaged Food1.1%11.7%87.6%87.1%25.3%28.8%Alcohol3.6%8.7%40.9%56.8%27.8%36.7%Baby Food + Care-3.1%8.2%65.3%41.8%-18.8%-23.7%Dairy1.3%5.6%59.9%59.9%22.0%31.2%Frozen Foods1.9%5.3%82.2%96.3%32.9%36.4%Fresh Foods1.3%5.0%59.5%63.6%19.9%23.8%50%+20% to 50%10% to 20%0% to 5%-20% to 0%5% to 10%<-20%NONEDIBLEF&BSource: IRI POS data Week Ending April 5, 2020 vs year ago

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Though many who shopped online for groceries reported availability and pricing concerns, a high proportion still plan to buy groceries online after the crisis

Online Grocery Shopping Issues in the Last Few Weeks

Source:  IRI Survey 4/10-4/12 among National Consumer Panel representing Total US Primary Grocery Shoppers

Some items I wanted were not available to order online

Some items I ordered were not delivered due to availability changes

Could not get a delivery or pick-up time that was convenient for me

Prices were higher than I would normally be willing to pay

Difficult or too time-consuming

to set up the order

Other issue

No issues

Likelihood to buy groceries

online after the stay-at-home

restrictions have ended23%Ordering more groceries online due to COVID-1949%Somewhat Likely16%Not at All Likely36%Very LikelyConsumers report it takes a mean of 3+ days to receive their online orders

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Dairy, Deli and Bakery Sales Trends

Slide14

The wider view on fresh

Meat Department

Produce Department

Source: IRI, Total US, MULO, 1 week % growth versus year ago

Fresh Perimeter

Total Bakery

Dairy Department

Deli Department

Total Edibles Excl. Fresh

Total Store with Fresh

15.9%

-27.0%

-20.1%

-22.5%

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Dairy continued to be a powerhouse, even going up against Easter 2019

Dollar sales increase over comparable week in 2019

for week ending…

Sales week ending

3/1/20

3/8/20

3/15/20

3/22/20

3/29/20

4/5/20

4/12/20

4/19/20

4/19/20

Dairy+1.5%+5.6%+60.0%+60.0%+22.2%+30.6%+31.3%+16.4%$1.6BNatural cheese+3.7%+8.7%+70.6%+73.8%+30.5%+39.8%+41.7%+22.1%$326MMilk+3.1%+6.7%+52.2%+47.5%+12.2%+22.5%+22.6%+16.0%$309MEggs-6.1%-1.0%+71.2%+71.5%+36.8%+51.8%+67.5%+24.6%$169MYogurt-0.4%+3.7%+41.7%+21.5%-7.0%-2.2%-3.9%-0.6%$139MCream/creamers+3.0%+6.5%+47.6%+43.0%+15.9%+25.4%+25.3%+18.1%$93MButter+5.9%+8.5%+90.2%+111.8%+61.8%+71.0%+62.4%+15.3%$88MProcessed cheese+2.9%+7.0%+80.5%+111.2%+43.4%+46.2%+43.8%+22.0%$67MCream cheese+3.5%+7.9%+60.0%+69.0%+31.3%+42.4%+51.9%+3.6%$42MSour cream-1.5%+1.8%+49.6%+60.2%+35.0%+47.6%+53.4%+9.7%$31MWhipped toppings+2.5%+3.6%+32.5%+41.2%+26.7%+41.6%+56.1%+4.5%$28MMargarine/spreads-2.7%+2.5%+79.9%+104.8%+39.6%+31.4%+11.9%+6.4%$27MCottage cheese-4.5%-1.4%+35.6%+33.8%+3.9%+9.0%+7.3%+4.8%$22M

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Deli continued to have mixed results; up for cheese, flat for meat and down for deli-prepared

Source: IRI, Total US, MULO, 1 week % growth versus year ago. Deli meat and cheese are non-UPC/random-weight only, Deli prepared foods are non-UPC/random-weight plus limited private label UPC. No third-party UPC/fixed-weight is included in these categories.

Slide17

Deli meat did see the mid-March bump, but has leveled off;

packaged luncheon meat continues to do well

Dollar sales increase over comparable week in 2019 for week ending…

Source: IRI, Total US, MULO, 1 week % growth versus year ago

Pre-Packaged UPC Lunchmeat

Random Weight Deli Meat

Sales w/e

4/19

$113M

-0.5%

$126M

+17.1%

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c

Non-UPC deli meat that was

pre-sliced in

grab-and-go

make up

32%

of total deli meat sales

Sales

+68.5%

Non-UPC deli meat sales

sliced-to-order

make up

68% of total deli meat sales Sales -13.4%Plastic packaging is no longer the enemy; grab-and-go can be a solution to drive salesIRI, MULO, w/e 4/19/20, % change versus YAGO

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Lessons from deli meat during the pandemic: pre-sliced grab-and-go

and cut-to-order online orders can be answers

Package size variety is key for variety,

HH sizes and budgets.

Others are not in favor; can online ordering be a solution?

It would be wonderful to have the pre-sliced meats in smaller weights. I would like to buy a couple of different deli meats rather than 1 pound of one kind of meat.”

You closed your deli and now I have to sort through bags of meat and cheese that have been handled by many customers instead of one employee behind the counter.”

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Deli cheese had a better performance than deli meat, but the patterns were the same

Random weight deli cheese

Dollar sales increase over comparable week in 2019

for week ending…

Sales

w/e

3/1/20

3/8/20

3/15/20

3/22/20

3/29/20

4/5/20

4/12/20

4/19/204/19/20Dollar sales-1.2%+5.0%+40.5%+37.5%+16.0%+6.2%+14.5%+5.2%$53MVolume sales-4.2%+1.1%+35.2%+33.9%+11.8%+9.7%+8.2%+0.6%7MFixed weight cheeseDollar sales increase over comparable week in 2019for week ending…Sales week ending3/1/203/8/203/15/203/22/203/29/204/5/204/12/204/19/204/19/20Dollar sales+3.6%+8.4%+72.2%+80.0%+32.7%+40.9%+42.1%+22.1%$393MVolume sales-2.0%4.0%64.2%74.3%+25.7%+29.4%+35.1%11.4%78M

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c

Non-UPC deli cheese that was

pre-sliced in

grab-and-go

make up

32%

of total deli cheese sales

Sales

+73.3%

Non-UPC deli cheese sales

sliced-to-order

make up

68% of total deli cheese sales Sales -10.4%Just like in deli meat, grab-and-go can be a solution to drive salesIRI, MULO, w/e 4/19/20, % change versus YAGOSource: IRI, Total US, MULO, 1 week % growth versus year ago, Deli Cheese is random-weigh (no UPC, fixed weight) and Fixed Weight Cheese is all pre-packaged, UPC items.

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Deli-prepared is down across all offerings;

creating demand for rotisserie chicken, smoked meats and other items is key

Source: IRI, Total US, MULO, 1 week % growth versus year ago

Deli prepared

dept.

Prepared

cooked meat

Entrees

Appetizers

Sandwiches

Salads

Sides

Pizza

TraysCombo mealsDessertsSoups

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Bakery

UPC, packaged baked goods are performing well; in-store bakery (non-UPC) is off

Source: IRI, Total US, MULO, 1 week % growth versus year ago, ending 4/19/20In-Store Bakery includes only non-UPC/random-weight items

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Packaged, UPC Baked Goods

Gains for functional items, especially

Source: IRI, Total US, MULO, 1 week % growth versus year ago, week ending 4/19/20

Dollar sales increase over comparable week in 2019

for week ending…

Weekly sales w/e

3/1/20

3/8/20

3/15/20

3/22/20

3/29/20

4/5/20

4/12/20

4/19/204/19/20Packaged baked goods-1.3%+3.0%+44.3%+49.2%+15.3%+18.9%+18.3%+5.2%$492M Fresh bread and rolls-0.4%+4.9%+58.6%+64.5%+25.4%+29.3%+28.1%+11.4%$298M Bakery snacks-2.8%+2.2%+23.1%+29.2%-2.8%-0.1%-2.7%-8.8%$50M Doughnuts-0.7%+23.5%+36.2%+13.0%+14.2%+14.2%+9.9%+8.5%$27M Pastries, Danish and coffee cakes-2.3%+25.0%+26.3%-0.7%+2.4%+2.4%+1.1%-4.7%$25M Bagels+1.7%+4.7%+49.7%+17.6%+25.9%+28.9%+35.7%+33.9%$24M Muffins-5.6%+0.4%+51.4%+51.7%+23.1%+35.5%-10.1%-0.6%$20M

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Cookies and Crackers (UPC)

Gains starting the second week of March onwards

Source: IRI, Total US, MULO, 1 week % growth versus year ago, week ending 4/19/20

Dollar sales increase over comparable week in 2019

for week ending…

Weekly sales w/e

3/1/20

3/8/20

3/15/20

3/22/20

3/29/20

4/5/20

4/12/20

4/19/204/19/20Cookies and crackers+0.1%+6.3%+62.3%+60.8%+12.7%+14.0%+10.0%+4.7%$313M Cookies-1.7%+3.9%+50.5%+53.5%+13.5%+15.1%+10.5%+5.6%$170M Crackers+2.1%+9.1%+75.6%+69.0%+11.7%+12.8%+9.6%+3.5%$143M

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In-store (fresh) bakery (random-weight only)

Struggles for indulgent items continued

Source: IRI, Total US, MULO, 1 week % growth versus year ago, week ending 4/19/20

In-Store Bakery includes only non-UPC , random-weight items and no fixed weight items

Top six items in sales

Sales increase for the week ending 4/19/2020

In-store/fresh bakery total

-32.1%

Cakes

-42.6%

Rolls

-25.8%

Bread+1.3% Breakfast items-15.6% Cookies-18.6% Donuts-52.9% Croissants-10.8%

Slide27

IRI COVID-19 Thought Leadership

Helping You Stay Informed

IRI’s Online Insights Offers Real-Time

Updates and Weekly Reports of the Impact

of the Virus on CPG and Retail, as Well as

Consumer Survey Data from this Report

The IRI COVID-19 Info Portal

Includes COVID-19 impact analyses, dashboards and the latest thought leadership on supply chain, consumer behavior, channel shifts for the U.S. AND international markets

The COVID-19 Dashboard

Accessible through the insights portal and tracks the daily impact of COVID-19. This includes the top categories across countries, out-of-stocks and consumer

sentiment on social media.

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An in-depth deep dive into consumer behavior and the implications of this unprecedented era will be shared in an hour-long webcast

MAY 13 at 12pmCSThttps://iddba.webex.com/iddba/onstage/g.php?MTID=eb907300e74fccc8bff0453ed37bbe65c

QUESTIONS