Pandemic shopping: Nestlé, Unilever and Procter & Gamble are all competing to adapt

Pandemic shopping: Nestlé, Unilever and Procter & Gamble are all competing to adapt

Jon Moeller, the company ’s chief financial officer, said on the earnings conference call last month: “We need to pay more attention to consumers and their habits, needs and desires than we do now.”

Early evidence suggests that the shift to online purchases is accelerating, consumers are buying more products for health and households, and they are becoming more and more cost-conscious while choosing to save more.

In a call with analysts last month, Nestle (Kyrgyzstan) CEO Mark Schneider said the company is “working overtime” to understand the impact of the economic crisis on each product category. Nestlé is the world ’s largest food and beverage company, and its production ranges from breakfast cereals (such as cereal) to Maggi instant noodles, Häagen-Dazs ice cream, Nescafé coffee and San Pellegrino water.

Schneider said: “For me, this is very interesting work, because obviously this will not recover soon.” “This will be a quarter or even a few years of the process, you can safely expect some category changes. “

In an environment where almost everything changes overnight, consumer goods companies need to figure out which new purchase models are temporary, may end with lock-in or vaccines, and will continue to exist, thus changing consumers Ways to spend money over the years.

“We are assessing whether we need to change our core products, prices and packaging sizes based on the market,” said Hanneke Faber, President of Food and Snack Foods. Unilever (UL certification), Which makes Lipton tea, pigeon soap, Hellmann’s mayonnaise and Ben & Jerry’s ice cream.

She told CNN Business that there is no “script” for this decline. “This will require us to become extremely agile and flexible for the foreseeable future.”

Everything

Although there are still many unknowns, it is clear that some lifestyle changes and changes in spending patterns will extend the lifespan of social alienation measures. For example, some consumers choose Online Shopping Since the physical store has been closed or to avoid the crowd, and now they have made a leap, they are unlikely to fully return to the original way.
Consulting firm McKinsey ’s partners said in a report: “Early lessons from China show that online market share will be“ sticky ”by the older generation and new consumer groups that have recently adapted to digital channels To six percentage points. ” research paper.

Their research found that the top three grocers in the UK have added more than 500,000 new delivery positions in just a few weeks, an increase of more than 30%.

With so many consumers, Nestlé's demand for Nescafé coffee increased during the pandemic.

Nestlé’s global e-commerce sales soared by 30% in the first three months of this year, while Procter & Gamble reported that online sales increased by 35% during the same period.

Coronavirus crisis is likely to be a “breakthrough event” online sale Nestlé CEO Schneider said that for the food and beverage industry, people who previously did not want to buy groceries online found it convenient.

Jack Neele, portfolio manager of Dutch financial services company Robeco, said that e-commerce is unlikely to remain at the current high level, but “we have reached a higher growth platform.”

Health and hygiene

As with online shopping, before the coronavirus epidemic, health and wellness was a growing lifestyle and only developed during the pandemic. Consumers wipe the surface and wash their hands more than ever, but orange juice, which is considered to be beneficial to health because of its rich vitamin C, has Soar.

Alan Jope, CEO of Unilever, told analysts last month: “We are very confident that anything in the health and well-being area will continue to grow.”

Faber said Unilever ’s products are sold more, such as Lipton immune support and drinks containing zinc and vitamin C. She added that the company is rapidly taking steps to promote these products around the world, and health remains a top priority for product innovation.

Procter & Gamble’s Mueller said: “We will provide services that may change the focus of health, hygiene and cleaning forever.” He pointed out that American consumers are washing clothes more and more frequently, adding more laundry capacity each month.

Procter & Gamble pointed out that the weekly laundry volume in the United States is increasing.

Nest at home

Even if the blockade is lifted, restaurants, bars and cinemas are reopened, people will still not rush out again.

Mueller said: “People may be more and more concerned about the family: more time at home, more meals at home, more cleaning at home.”

With unemployment Sky high level, Many consumers’ leisure budget will be reduced. They may also decide to continue to save more money to survive the recession. The latest data from the Bank of England and the European Central Bank show that the household savings rate in some of Europe ’s largest economies soared in March. In the US, the savings rate jumped to Highest level Since 1981.

For those who spend time and money to transform houses and gardens, or start a new hobby, the prospects that remain are more attractive than before.

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The McKinsey report said: “Check-in is a new way out.” “Once the restrictions are lifted, we expect consumers to continue to spend more time at home, driven by savings, continued security issues, and the discovery of nested new pleasures. “

Growth of bread machine online sales United States Data collected by retail technology company Stackline shows that it was second only to disposable gloves in March, a year-on-year increase of 652%. Online sales of weight training equipment (+ 307%), craft kits and items (+ 117%) and table tennis tables (+ 89%) reflect that many consumers are looking for new ways to entertain themselves at home.

To cater to this trend, Nestlé launched a series of health-conscious ready-to-eat foods last week. Faber, a Unilever executive, described this trend as “cannibalization.”

Unilever estimates that 15% of restaurants that went bankrupt in China during the crisis will never reopen. If social alienation rules still exist, restaurant and bar owners will say that their business model is likely to be repeated elsewhere Does not work at all There is no flow and flow.

Value and trust

of Coronavirus decline It is predicted that this will be the worst situation in decades, which means that in the foreseeable future, businesses and consumers will face cash shortages.

Unilever’s Qiaopu said that even in rich countries, value and affordability will become increasingly important. He pointed out that the company’s ability to provide “incredibly low-priced” products in countries such as India with “great power.”

He said: “In Europe, as the economy … falls into a downturn, we can count on increased negative pricing pressure.”

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Similarly, Procter & Gamble said that because its product portfolio is mainly focused on daily necessities, it is more resistant to the impact of the economic downturn. “We have never encountered the level of unemployment we want to see in this country [the United States] There may even be other situations, and we don’t know how long it will last. “

There are already signs that consumers are Trading down, Favor cheap private label products, so that such as Costco (cost), Walgreens (World Basketball Association) with CVS (CVS). Sales Office Discount store, Such as US dollars in general (Dangerous goods) And Aldi also likes to take the elevator.

But, at least so far, Nestlé, Unilever and Procter & Gamble are confident that consumers will strike a balance between price and value, choose well-known brands they are familiar with, and reduce their attempts.

Faber of Unilever said: “People will return to the big trusted brands.” “They simply can’t afford to buy uncertain products.”

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