It is still too early to make any conclusions about the long-term impact COVID will have on preferences and behaviour. As is often the case, we tend to overestimate short-term effects while underestimating the true structural changes that will be revealed over time.
Currently, we are observing three behaviours in almost every country in the world:
People are shopping less often, whilst buying more per visit.
Consumers' personal care routines have changed – or been “paused” – driven by fewer social interactions.
Digital has accelerated, with e-commerce competing with big store formats and home delivery replacing the out-of-home consumption occasion.
These shifts are further complicated by changes in disposable income, but we know that FMCG is resilient.
When we adopt the brand lens, we learned that the potential for performance is highly dependent on the category performance. Brands are five times more likely to be growing if the category in which they play is growing. This truth is as important as ever.
Weekly category performance
FMCG categories have broadly fallen into four ways of performing while a market is in lockdown:
Source: Kantar, MX FMCG Purchase Panel Weekly data
However, within each category there is a different story to tell for the individual brands.
Household Cleaners
One of the first categories Mexicans sought when the lockdown began. In March, 3 of the top 10 brands increased their Consumer Reach Points. The leader, Pinol, was the main winner, with + 23% CRPs. This Brand is known for its sanitizing power. It is a household cleaner, but they have an app where you can find more than a thousand uses for Pinol. People share the main uses they make of Pinol, for example, in laundry to remove ink stains or to drive away insects – and keep on adding more uses. On their site, currently the main messages are tips to prevent diseases and to sanitize homes.
Biscuits
Spending more time at home, we saw categories whose consumption increased during social isolation. In Mexico, most of the categories that increased occasions are foods – which have been growing more than in the pre-COVID period. In cookies, we found that 4 of the 5 most chosen brands have increased CRPs in the first quarter of the year. But even smaller brands have also grown in this period. Where the category is growing, there is an opportunity all sizes of brands may seize. Driven mainly by cookies, but also crackers, these categories are developing in the social isolation period.
Fabric Detergents
In laundry detergents, we found that 5 of the Top 10 brands earned CRPs in the First quarter of 2020. Among the brands that grew the most are some multipurpose detergents, i.e., both for clothing and dishwashing. Roma, which ranks #6 in Home Care, increased its CRPs to double digits in this period. It highlights it is economical, high-yield and effective. Another feature that Roma and other brands that have grown during the quarantine have is that they are biodegradable. In this line are Foca and Blanca Nieves, which also increased CRPs. Not only were economy brands more chosen during the confinement, but also liquid detergents like Mas, or that have a wide range such as Ariel, which were purchased more times.
Deodorants
This is a category that lost CRPs in the lockdown, driven by fewer shoppers. Their performance in the quarantine period is less than prior to the confinement. In the top 5, 3 brands lost CRPs at double digit rates.
While 2 others also grew at this rate. Nivea is a brand that has increased Consumer Reach Points globally and, in Mexico, repeated the story in deodorants in the first quarter of the year.
It has won buyers and consumer choices. Another brand that has also gained is Lady Speed Stick, driven by more buyers.
There are two key conclusions to take from behaviour during this lockdown stage:
1. It is the biggest brands who are currently winning, particularly within the growing categories which have seen a surge in demand. 2. Traditional marketing levers are as important as ever to ignite demand in certain categories. It is still possible to win if your category is performing slower than others, or is even in decline.
It’s important to remember that the category patterns displayed here are strictly related to lockdown. New patterns will arise as long-term changes are revealed.
We have probably never seen so many people trying something new, whether it’s a new retail channel, new routines (whether in cooking, eating or personal care), or new brands. What we need to do is observe and understand how many, if any, of these behaviours will stick as restrictions are lifted.
