Times & Trends

2009 CPG YEAR IN REVIEW: A MARKET REDEFINED BY PERSONALIZED SHOPPING STRATEGIES
February/March 2010
EXECUTIVE OVERVIEW

IRI's Times & Trends highlights new developments and critical events across all major CPG categories and channels, providing powerful benchmarking data to help guide your strategic decisions. This issue of Times & Trends explores economic, channel, department and category performance over the past year. The report is intended to help CPG marketers understand market opportunities and risks by benchmarking performance versus the industry, and act on this knowledge with confidence and agility. A free summary is also accessible via the GMA website at www.gmaonline.org.

INTRODUCTION

The year 2008 will go down in history as the year the United States entered the most significant recession since World War II. It is a recession that has now, in early 2010, officially entered its second year. It is not surprising that consumers have made substantial changes to their daily lives to withstand this tumultuous economy.

The home has once again become the nucleus for daily living. Shopping habits have undergone a stark metamorphosis. CPG marketers are nimbly adapting to these changes with beefed up promotional programs, aggressive pricing tactics and refined assortment/distribution strategies.

The year 2010 is one of opportunity. With ongoing economic uncertainty, consumers are turning to the packaged goods industry to satisfy a growing number of daily needs. CPG marketers with the ability to understand, or even anticipate, these evolving needs will forge relationships that will outlast the recessionary environment.

KEY FINDINGS

»Consumers continue to exercise deliberate and conservative spending behavior, driven by prolonged economic discord and reinforced by projections of a return to inflationary CPG prices.

Gas prices’ return to historic norms has opened the door for escalating channel migration activity; grocers are aggressively working to improve their price-value reputation to retain and attract budget-conscious shopper.

»CPG Industry Dollar Sales % Change versus Year Ago: 2009 vs. 2008
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63 of the top 100 CPG categories experienced higher than average price increases in 2009, driven by market forces and the mover to sustainable CPG; these factors are forecast to lead to CPG prices increases in 2010.

Consumers remain focused on saving money through at-home, from-scratch meal preparation and self-administered health and beauty care; categories that cater to these behaviors have performed well, and are expected to remain strong throughout 2010.

»Top 10 Growth Categories Unit
Sales % Change Versus a Year
Ago: 2009 vs. 2008
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Private label share gains cut across nearly all CPG departments and are illustrative of consumers’ recession driven ritual changes, including at-home cooking and self-care.