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20-20 Hindsights

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Or should we say, 2020 hindsight? It was a tough year, but dairy and frozen departments delivered significant sales and growth vs. their counterparts. And the winners are…

In my year-end assessment of edible department and category performance, I drilled down across a few NielsenIQ reported sales and growth metrics to create an overall performance scorecard.

For the 52 weeks ended 12/26/2020, the grocery department was the clear dollar sales leader with $320.5 billion in sales, followed by meat ($83.4B) which was just ahead of dairy ($82.2B). The frozen department ($67.6B) was the sixth biggest seller. In terms of absolute dollar sales growth versus the prior year, the grocery department (+$32.2B) was again the leader, with meat (+$13B) No. 2, frozen (+$11.4B) No. 3, and dairy (+$9.6B) No. 5. In terms of dollar % change versus year ago, the seafood department (+23.9%) jumped to No. 1, followed by frozen (+20.2%), meat (+18.5%), and dairy (+13.3%) at No. 5.

Subtracting 2019 dollar percentage change year-ago from 2020 figures yields a growth differential metric showing change in growth from 2019. The top three rankings were seafood (+19.9%), frozen (+18.1%), and meat (+17.3%) with the dairy department (+12.8%) achieving a slightly better differential than alcohol (+12.7%) and finishing with a No. 4 rank. Finally, adding up the numerical (1 to 9) rankings from all four metrics creates a total performance score. The meat department achieved the best overall score (10), followed by frozen (13), grocery (15), and dairy finished in a tie for fourth with alcohol with a score of 17.

A drill-down into the top-performing frozen department super-categories yields impressive results compared to competitive super-categories in other departments. Among the frozen super-categories which delivered the largest absolute dollar growth, four of the top five (prepared foods, desserts, pizza, and fully cooked meat) delivered incredibly positive results versus declines in competitive super-categories.

For example, frozen prepared foods grew by $2.99 billion in sales, while deli prepared foods declined by $1.35 billion. The other top absolute dollar growth driver (frozen seafood) delivered better growth than fresh seafood (+$1.78 billion versus +1.38 billion) and frozen seafood grew a whopping 34.9% from year ago versus a solid +23.9% for fresh seafood.

The remaining frozen department super-categories delivered much smaller absolute dollar growth than their competitive counterparts. Excluding ice, which has no competition outside of the frozen department, all but one of these frozen super-categories had considerably better percentage dollar growth than competitive categories. (Frozen processed meat was edged out slightly by the processed meat sold in the meat department (+19.8% versus +19.6%.)

Within the dairy department, comparisons to other department competitive super-categories were possible in only six of the top 10 super-categories delivering the best absolute dollar growth. However, in five of those six super-categories (cheese, cream and non-dairy creamers, dough & batter products, prepared foods, and milk/dairy alternatives) absolute dollar growth was much larger. The one exception was dairy beverages, which delivered exceptional growth of $1.13 billion, which was $600 million below grocery beverages.

Four of these six dairy super-categories (beverages, cream & non-dairy creamers, dough & batter products, and prepared foods) delivered considerably better percentage dollar growth than their competitive super-category. Dairy department cheese growth (+17.3%) tied the level achieved in the deli department, while milk/dairy alternatives in the grocery department (+24%) was greater than the stellar 19.7% growth rate from the much larger super-category found in the dairy department.

Hats off to the frozen and dairy departments for their stellar performance during a difficult year. With inherent qualities to help consumers keep products fresh and reduce food waste, frozen and refrigerated foods mattered during the pandemic, meeting consumer demand across center-plate proteins, main meals, side dishes, and snacks/desserts for increased at-home meals. Results also highlight the need for retailers to consider giving these two departments a fairer shake and elevating space allocation and merchandising support.


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Todd Hale

Todd Hale

Retail insights thought leader Todd Hale is the former senior vp of consumer and shopper insights at Nielsen and now serves as principal at Cincinnati-based Todd Hale, LLC. A popular conference presenter, he also speaks at large and small company events — everything from board meetings to sales meetings to planning sessions. Todd’s discussions include the latest consumer and retail trends with insights on how manufacturers and retailers can enhance both near- and long-term market performance. He can be reached at todd@toddhalellc.com.

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