Some 45% of U.S. households are experiencing worsening household income/financial situations and are consciously watching spending, according to a just-released Nielsen study. That’s by far the largest consumer group identified in the study.
That’s important for bev/al marketers because it suggests as strong as bev/al has been throughout the pandemic, it could be stronger when the economy recovers.
About 30% describe themselves as “cautious insulated” — Covid has had a limited impact on either their income or financial situation but they are being lot more careful in how they spend their money.
About 16% of consumers said nothing much has changed economically with Covid — they were already watching what they spent before Covid-19 and this hasn’t changed.
That leaves just 9% of the U.S. population that feels it has been insulated from the economic impact of Covid and therefore it doesn’t have to watch what it spends.
So what does all this mean for bev/al marketers? To begin with, you might want to run more promotions– 50% of consumers say they are buying whatever is on promotion regardless of brand. In the same vein, 50% say they’ll pick a store brand over broadly advertised national brands and 53% are habitually selecting the lowest-priced product regardless of brand.
Some 74% of consumers say they are willing to buy directly from manufacturers to get better choice, value and rewards. That’s not good news for wholesalers or retailers although the industry is currently protected by the three-tier system. This finding suggests bev/al marketers, especially at the wholesale tier, will need to constantly reinforce the benefits of the three-tier system.