More Americans put frozen pizza and Oreos on their shopping lists

Discussion
Photo: @doondevil via Twenty20
Apr 30, 2020
George Anderson

A “rising tide lifts all boats” situation is playing out in grocery stores across the nation as consumers stay at home to eat in numbers not seen in decades.

At the beginning of 2020, the percentage of food eaten at home and outside the home was equally split, according to a Quartz report based on U.S. Census Bureau data. In March, as restaurants closed and consumers began staying at home to try and curtail the spread of the COVID-19, almost 63 percent of all food and beverages bought in the U.S. was for at-home consumption.

Frozen food brands have been among the beneficiaries of Americans eating at home. The American Frozen Food Institute (AFFI) reports that the category’s sales jumped 94 percent in mid-March and continued strong into April, with year-over-year gains between 30 and 35 percent.

Eighty-six percent of all consumers purchased a frozen food product in March, according to research conducted by 210 Analytics for the AFFI. Seven percent of consumers who rarely or never purchased frozen foods before the coronavirus outbreak are now doing so.

“This is a tremendous expansion of the category that could have long-term implications,” Anne-Marie Roerink, principal and founder of 210 Analytics, said in a statement. “This includes Gen Z buyers, as well as Baby Boomers who left the category during the TV dinner era — returning now to find newer, tastier products.”

Consumers are drawn to the convenience and quality of frozen foods. On a five-point scale, consumers listed convenience (4.3) and quality (4.1) as the primary factors in their purchase decision-making.

Sales of snacks are also doing quite well as Americans stay at home to eat. Mondolez International, the parent company of Oreos and other brands, reported a 6.4 percent organic sales growth rate for the first quarter.

The company’s CEO Dirk Van de Put told CNBC that sales spiked 30 percent as stay-at-home orders were put in place across the country. Even after the initial bump, sales growth remains in the high single-digit area.

“Originally, you would have said this was pantry loading, but this has now been going on for more than six weeks. And unless consumers are building a warehouse for Oreos at home, I think they are eating it,” he said.

DISCUSSION QUESTIONS: Do you expect Americans to continue eating at home in larger numbers post-pandemic than before the outbreak? What will grocers and consumer food brands need to do to build on their recent gains once life returns to a semblance of normal?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Post-pandemic, a subset of consumers will continue to choose home cooking. Reasons could range from a lingering distrust of food providers to a renewed passion for cooking."
"I think it has been a wake-up call to many to see how cheap it is to actually cook meals at home."
"One of the big post-pandemic factors impacting fewer meals being eaten in restaurants will be more people working from home."

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26 Comments on "More Americans put frozen pizza and Oreos on their shopping lists"


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Ben Ball
BrainTrust

People seek comfort and reward in times of stress — snacks and treats like chips, candy, cookies and ice cream have always topped that list. Away from home food trends will increase at an accelerating rate as virus fears ease. Whether we will get back to 55/45 away vs. home on food spending is a reasonable question, but I think we will.

Richard Hernandez
BrainTrust

Ben, I agree with you — comfort eating is what drives the increase of snack consumption in lockdown. But one thing that has come out of this is that I see an overabundance of people making videos of themselves cooking — some for the first time. I think some people will stick with it and some will just give it up once people are allowed to go to restaurants again.

Ben Ball
BrainTrust

The editor of our HOA newsletter requested commentary on life with social distancing. One woman commented: “We’ve been spending a lot of time in this new restaurant called ‘kitchen’. You have to assemble your own ingredients, prepare your own food, serve yourself and then bus your own table. How did this place ever stay in business for so long?!?!?”

Not much I can add to that.

Jeff Weidauer
BrainTrust

Most consumers will return to their habits of eating out post-lockdown because cooking skills have declined over the past half-century to the point that nuking a frozen packaged meal is considered “making dinner.” Supermarkets have a unique opportunity to take on a food leadership role now and actively teach their customers how to cook – not just throw ingredients together or boil water. The demand will grow – who will respond?

Lee Peterson
BrainTrust

You gotta believe there’s going to be a restaurant bounce after this — that is, if they’re still around. And the Oreos thing, ugh. The worst though is that you don’t realize how much you actually move around going to work, traveling, running to stores, etc., until you don’t do it. It occurs to you after six to eight weeks of sitting around at home then getting on a scale, that’s for sure! It’s a testament to the importance of getting out and being active, more than just exercising. There has been lots of learning these past few weeks, for sure.

Stephen Rector
BrainTrust

I think people will be more demanding about the quality of what restaurants are serving in the future. I think it has been a wake-up call to many to see how cheap it is to actually cook meals at home. I don’t think people will want to spend $20 bucks on a plate of mediocre pasta that they now know they could make for a fraction of the price.

Gene Detroyer
BrainTrust

Stephen, I think you make two great points. In our household my wife cooks (I do the dishes). Personally, the meals I get at home are better than almost any meal I find in a restaurant, even a notable one. Obviously going out to eat is a respite for her (and I don’t have to do the dishes), but every so often even she will say, “my meals are better than this.”

Stephen Rector
BrainTrust

Gene, I am the cook in our household and I say the same thing every so often as well when dining out!

Ricardo Belmar
BrainTrust

I’m with both of you! I do the cooking in our household and our family has been quite shocked over the past few weeks about how well we are eating at home and how much lower our credit card bills are for it! Yes, there are some restaurants we cannot wait to go back to because we miss their food, but there are also many we are finding we can live without. The restaurant industry is not going to be the same when this is over. Ultimately, we’ll all be better for it I think because the quality and price/value will improve, but it may take some time and we may see many losses as we get there.

Neil Saunders
BrainTrust

In the short term, we will all eat more at home because restaurant capacity will be restricted, some will be fearful of going out, and a lot of households may not be able to afford to dine out. However longer-term I expect the situation will normalize. Americans like meals away from home for many reasons, including social interaction and I cannot see that changing.

That said, supermarkets can build on their recent advance and look to cater more heavily to those wanting to have great meals at home. Ready-made meals, cooking kits, better frozen meal selections, and so forth are all sensible ways to stimulate demand. Also having tiered ranges for good/better/best across these assortments is important as household finances are polarizing and value, as well as quality, needs to be catered to.

Dick Seesel
BrainTrust

Somebody shopping in a grocery store might be inclined to buy cookies from the bakery department under normal circumstances, but the “Oreo” phenomenon suggests people are seeking familiarity and safety. (This assumes packaged cookies produced in a remote factory are seen as “safer” than those fresh-baked in the back of the store.) But is the resurgence of nationally-branded “comfort foods” during the crisis sustainable? It’s harder to forecast consumer behavior after a disruption like this one.

Jeff Sward
BrainTrust

I actually enjoy my own cooking. And no, I am not yet comfortable that restaurants and other diners will all live by the new rules. But hey, nobody makes a burger and fries like Five Guys. So at some point, I’m only human. Please pass the ketchup.

Lisa Goller
BrainTrust

Fear motivates us to try to control more variables in chaotic circumstances. Now the fear of germs is motivating more consumers to decline to order any takeout food so they can take control of their own food preparation.

Post-pandemic, a subset of consumers will continue to choose home cooking. Their reasons could range from a lingering distrust of food providers to a renewed passion for cooking.

Communication can help grocers and food brands restore consumer confidence. To earn trust, companies can be transparent, skip the hard sell and directly address consumer concerns. Honesty, integrity and sincerity can increase brand trust by giving consumers the assurance and comfort they desire.

Jeff Weidauer
BrainTrust

Agreed Lisa — I think grocers have an opportunity (maybe a responsibility?) to help that subset learn how to cook. I’ve always been passionate about grocers acting as if they are in the food business, and this seems like a good time to double down on that.

Steve Montgomery
BrainTrust

The short answer is yes. Even when restaurants open, I do not expect people will rush to eat out. First there will be the restriction on the number of people who can be in the restaurant. People are not going to want to drive to a restaurant only to find they cannot get in or call and find there are no reservations available at the time they want to eat.

There will also be those who realize that eating at home costs them far less than dining out and still many who will just remain concerned about being in a closed environment with other people.

Gene Detroyer
BrainTrust

One of the big post-pandemic factors impacting fewer meals being eaten in restaurants will be more people working from home. I believe it is clear that people and companies will realize the benefits of workers telecommuting, at least part time.

If you don’t go to the office, do you then make yourself breakfast and coffee instead of grabbing it on the way to work? How about that lunch you went out for every day, whether at a sit-down restaurant or a fast food establishment? Or how many times, leaving the office did you say “I just don’t feel like cooking tonight, let’s go out”? Every one of those situations is one less restaurant register ring — and one more register ring for the grocery store.

Ricardo Belmar
BrainTrust

I 100 percent agree on all of your points, Gene. We will see the restaurant go through a completely different kind of transformation.

Gene Detroyer
BrainTrust

As an aside, my wife is a dietitian in private practice. Many of her ongoing patients have eaten EVERY meal out. She says now they are saying: cooking isn’t so hard. I can have what I want, when I want it and not be constrained by the menu. Now I don’t trust the food they serve me.

Breaking habits is tough, but how that opens our worlds!

Patricia Vekich Waldron
Staff

While I’m in the minority (no frozen or snack foods in my basket) I believe even those who do eat those types of things can be convinced by meal kits, marketing and product placement to continue to make tasty meals at home one restrictions are limited. Smart grocers are already making these changes.

Ricardo Belmar
BrainTrust
The makeup of the restaurant industry will change dramatically. It’s hard to predict which segments will be most affected, but I suspect the majority of the sit-down casual dining segment will suffer the most. Why? The combination of people realizing how well they can eat at home, for less cost, and more remote workers, will cause the need for these restaurants to diminish. People won’t want to take the time to eat there in what they will perceive most of these brands to deliver less than ideal food quality. The standards consumers will have are going to go up, as will the appreciation for neighborhood restaurants, chef-owned establishments, and a desire to support those small business owners over large national chains. There is also a great opportunity for grocery stores to help encourage better eating at home and make it easier for customers to know what to cook and what to buy. True, they’ve always had this opportunity and few have made the most out of it, but consumers will be more receptive to it… Read more »
Craig Sundstrom
Guest

The “snacks” surge is less obvious — and more ominous, given how out-of-shape many are — although the number is relatively small (indeed “surge” may be overstating things).

Short-term, I think we’ll see a continuance, longer-term no. There are reasons people eat out and I don’t see them changing fundamentally. But the longer “after” takes, and the less it’s really after and just some other phase, who knows?

Mel Kleiman
BrainTrust

Three things are going to affect the grocery store and restaurant industry and where consumers eat.

  1. The amount of disposable income is going to be decreased f large percentage of the population;
  2. Even in a short time that the virus has been around, it has already affected people’s eating habits.
  3. The number of people working from home is dramatically going to increase, which will affect the number of meals eaten in restaurants.
Kenneth Leung
BrainTrust

I think frozen pizza and Oreos are the go-to for working families who now have children at home. You can’t sit down and prepare proper lunches and dinners when both are on conference calls and doing home schooling, and children will live (not well) on pizza and Oreos if you let them.

Kathy Kimple
BrainTrust

Some of the current shifts in behavior — to frozen food consumption, cooking at home — are likely to stick when the virus recedes. Smart merchants are figuring out now how to take advantage of these and other trends, including changing their product assortments and delivery methods.

Shikha Jain
BrainTrust

Most likely this is a temporary trend like most things we’re seeing in food retail right now. However, it will still be a while before things go back to “normal,” so manufacturers and retailers should plan accordingly for now, based on current consumer trends. Stock more frozen goods, pre-packaged produce, and plant-based alternatives to hot-ticket meat and dairy items. Make sure your assortment matches demand trends — use your shelf space wisely and offer appropriate pack sizes. And of course, merchandise these items with clear messaging around value drivers, how-tos, and useful bundles like meal kits that minimize guesswork and decision-making for buyers.

Joel Goldstein
BrainTrust

As we service the convenience sector and front end merchandise, we have learned from experience that when the market is in flux or unemployment is rising people tend to flock to the salty and sweet snacks over healthier options. Sales in our channel are approaching 25% above projections and they are driven by the fear of the public seeking comfort in their snacks.

wpDiscuz
Braintrust
"Post-pandemic, a subset of consumers will continue to choose home cooking. Reasons could range from a lingering distrust of food providers to a renewed passion for cooking."
"I think it has been a wake-up call to many to see how cheap it is to actually cook meals at home."
"One of the big post-pandemic factors impacting fewer meals being eaten in restaurants will be more people working from home."

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