IRI survey surprises CPGs
Consumer packaged goods companies are not benefiting from the boost in the U.S. economy, new data show.
According to the latest IRI Consumer Connect survey, even though 55 percent of households say their financial health is good, consumer packaged goods unit sales growth is anemic and the non-food sector is struggling even more.
“Our quarterly index indicates that consumers do not feel like they are on the economic roller coaster as they did in the past,” said Susan Viamari, Vice President of Thought Leadership for IRI. “People are opening their wallets more and spending, but they are still very selective about what they will spend their money on. Obviously, people need to eat, so they are spending more freely on food and beverages. However, they are looking to stretch their dollars a bit more in the non-food aisles.”
The Consumer Connect Index, which monitors consumers’ financial health and consumer packaged goods behaviors for various factors, came in at a 98.7 for Q2 2018. This was very close to Q2 2017 (98.6) and only slightly less than the Q1 2018 (99.5) index. With the standard index score of 100, a Consumer Connect Index score of more than 100 reflects consumers who are less price-driven and more loyal to favorite brands, and better equipped to maintain their desired lifestyles without changes.
However, according to IRI, there is reason for optimism. The economy is continuously setting its course on a positive trend and, therefore, many consumers are expecting their financial position will improve throughout the remainder of the year. Even among groups that are struggling, consumers expect their household’s ability to save money will improve: 58% (total), 64% (households with kids), 54% (households with income less than $35,000) and 43% (Hispanics). In addition, these groups are showing a willingness to invest more in premium-tiered CPG solutions during the next six months: 30% (total), 28% (households with kids), 31% (households with income less than $35,000), 22% (Hispanics).
To read full IRI report, click here.