Folgers ad spoofs
working at home without pants.
If there’s one thing food and condiment marketers can agree on, it’s that at-home cooking and dining show no signs of reverting to pre-COVID-19 routines anytime soon.
Credit the resurgence of coronavirus cases, the curtailment of restaurant dining, the continuation of remote working, and high unemployment.
On a recent conference call with financial analysts, Conagra Brands—whose portfolio includes Birds Eye, Duncan Hines and Healthy Choice—shared historical data on how a weakened economy changes eating behavior.
“We see consumers experiencing and making lifestyle changes driven by COVID-19 that suggests the arrival of a sustained shift in eating habits,” said Conagra president and CEO Sean Connolly. “We also know from prior recessions that an economic downturn typically leads to a permanent increase in at-home eating even when economic growth returns.”
He went on to cite data from various research firms detailing the impact of the recession that began in 2008. That downturn fueled a 200-basis-point increase in eating occasions “sourced at home”—to 82% from 80% over a four-year period.
“With the the COVID-19 disruption, we’ve already seen another 200-basis-point increase to 84% in four months from March to June 2020,” said Connolly.
In its recent third fiscal quarter, McCormick & Company gained share in seven of 11 categories in which it competes—in part because of people adding flavor to meals ordered from restaurants. Winners included the company’s hot sauces, stocks and broth, barbecue sauce, wet marinade and Asian products.
“We believe these trends will last beyond the COVID-19 pandemic and drive continued growth,” McCormick chairman, president and CEO Lawrence Kurzius told financial analysts.
Meanwhile, brands are dealing with the balancing act of providing SKUs that are most in demand while spending enough on promotions to move their brands off shelves and online platforms.
Add in the upcoming holidays and the question becomes: Can brands and retailers fulfill consumer demand?
Recent reporting by The Wall Street Journal highlighted the retailer side of the equation. Having experienced the pervasive out of stocks that occurred early in the pandemic, grocery chains en masse have shifted from just-in-time inventory management to pallet loading.
“We will never again operate our business as unprepared for something like this,” the Journal quotes Associated Food Stores vice president of retail operations Darin Peirce as saying.
According to Nielsen, during early pandemic days, pantry-loading consumers largely disregarded prices in their fear of empty cupboards— and, as a result, many brands curtailed their advertising and promotion spending. That led to “higher prices on 64% of more than 500 grocery store categories,” Nielsen said on Sept. 25.
Going forward, financial concerns will play a big part in shopper behavior, as reflected in the findings of Nielsen’s COVID-19 Shopper Survey.
Asked what they will do more of if economic conditions worsen, 52% of respondents said “cook at home,” followed by “find more deals” (48%), “shop at stores that offer lower prices” (46%), and “use more coupons” (43%).
McCormick executives suggested they plan to increase “brand marketing spending” by 12% to 18% in the fourth quarter.
The JM Smucker Company—marketer of Jif, Crisco and other CPG brands—is optimizing its marketing outlays by reallocating resources “to brands with capacity for faster growth,” including Folger’s coffee.
“But I think we’re still working through what pricing and promotion mean, both coming into the environment of COVID-19 and coming out of it as well,” Smucker CFO Tucker Marshall said on the company’s most recent earnings call.
In a riff on COVID-era themes, the latest campaign commercial for Folger’s spoofs at-home work by opening with a shot of a man on a video call wearing a suit and tie but sans pants—unaware that “your whole team can see your upper thighs.”
Tying in with the theme of more home cooking, the King Arthur Baking Co.(which recently rebranded from King Arthur Flour), today launches a campaign designed to show how baking can bring people together.
A 60-second campaign spot titled “The Power Of Baking” features professional bakers making their own recipes in their bakeries as well as their home kitchens. It ends with the words “let good things rise” superimposed over the image of a freshly baked loaf of bread.