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Panel Data Identifies Growth Drivers

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Rapid frozen and dairy growth has been driven by more trips and greater spending per trip. But both departments saw a small contraction in shoppers.

As a consumer panel geek in graduate school as well as for most of my business career, I learned how consumer panel data is a terrific tool for marketers to understand sales volume in terms of household penetration (percent household penetration, or buying households), frequency (average trips per buying household), and per trip spend. These key metrics let you tweak your product offering, advertising and merchandising support to drive growth.

NielsenIQ Homescan consumer panel data illustrates how 2020 dairy and frozen sales grew because of more trips and increased spend per trip. Both departments reached an impressive number of buying households, although frozen household penetration was slightly lower (see chart). Drilling down into individual category performance identifies how a change in the size of a buyer base for individual categories played a significant role in their growth, too.

Multiplying buying households by trips per buyer yields overall buying occasions. With a moderately larger base of buyers and a big advantage in terms of buying frequency, dairy delivered 7.9 billion buying occasions in 2020 versus 5.1 billion for frozen. However, versus 2019, frozen added considerably more buying occasions (+453 million occasions, up by 9.7%) versus a gain of 324 million buying occasions for dairy (up by 4.3%).

(While per trip spend varies across categories and plays a key role in driving sales, the range in spend and change in year-over-year spend is much smaller than the sales components of household penetration and frequency. So I focused the remainder of this review on changes in buyers, trips per buyer and the resulting buying occasions — thus avoiding more or larger charts and avoiding the wrath of Warren!)

The frozen department met increased consumer demand during the pandemic as consumers sought products for all meal occasions (especially for center-plate proteins) as well as for perishable categories which could be kept in the freezer for use as needed.

Top dairy categories had generally higher household penetration than those in frozen. Four categories penetrated more that 107 million households and all but one (butter & margarine) saw their household penetration fall slightly in 2020. All remaining top 10 categories on this list saw their shopper bases expand. Creamers and non-dairy creamers gained 3.5 million buyers and 120.9 million occasions, with more people working at home and not having their morning coffee on the way to work or at work).

Food for thought: The dairy and frozen departments benefited from increased consumer demand in 2020. For those dairy and frozen categories with expanded shopper bases and/or buying frequency, I would urge you to find ways to reach the expanded set of buyers and message them to keep 2021 sales levels elevated. The continued reopening of businesses and restaurants will require you to be proactive.

Retail insights thought leader Todd Hale (todd@toddhalellc.com) is the former senior vp of consumer and shopper insights at Nielsen. He is principal of Cincinnati-based Todd Hale LLC.

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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