Unlocking pockets of growth
Although food is the sector most impacted by inflation, it remains resilient as consumers still depend on this sector for their Pantry Essentials and Snacks. Food offers opportunities for that are unique to each segment and category. In this sector, we’ll divide our insights into the two sectors: Pantry Essentials and Snacks.
Pantry Essentials categories grew by 12%, but consumers are coping with rising inflation by scaling down the volume of Cooking Aid products they purchased and Reducing the number of shopping trips.
Consumers are feeling the squeeze of inflation, and are responding by prioritising their shopping baskets. Mature categories, such as Cooking Oil, Soy Sauce, and Instant Noodle, are more susceptible to inflation as consumers are buying smaller volumes due to price increases. Additional Pantry Essentials such as Mayo, MSG, Canned Food and Frozen Food are more resilient and have been growing in terms of volume.
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Since Inflation was, is, and still going to be a common denominator across categories, Kantar is ready to explore your options with the help of AI/ML. Contact us!
All consumers are feeling the impacts of inflation and we can see the affects in their shopping baskets. Value growth is highest in the upper classes, while the lower classes are more likely to cut back by reducing how often they shop. The good news is that all buyer cohorts are buying a wider range of pantry essentials.
Increased mobility has created more eating out occasions for Lunch and Dinner in Indonesia, which is impacting Pantry essentials categories further. Based on our Global OOH study, Indonesians eat out every four days on average, which has led to a drop in the number of occasions for In Home Cooking compared to last year. Brands need a focused strategy to find more pockets of growth within the Pantry Essentials category.
Pantry Essentials categories are divided into Cooking Aid and Instant food.
In this chapter, we’ll explore the key trends and categories in food that offer brands opportunities for growth in 2023.#1 Riding the rise of experimental home cooking Despite people cooking at home less often, it remains relevant and there has been a rise in the average number of categories bought, especially in Urban Secondary Cities and Rural areas. Consumers are experimenting more and are choosing products to elevate their home-cooked dishes, which is driving the growth of the Additional Pantry Essentials categories. Brands can piggy back on this trend for experimental cooking and maximise opportunities for growth, particularly within Urban Secondary Cities and Rural areas.
It will come as no surprise that proximity channels, such as Traditional Trade and Minimarket, are key. However, there’s an interesting rise in growth within Digital Commerce and Peddlers where goods are delivered door to door in residential areas. Both offer greater convenience to shoppers and, while the contribution is still small, the growth is strong and steady.
Ensuring products’ availability in proximity channels is a must; while availability in Peddlers and Digital Commerce should be explored since these channels gave more convenience to the shoppers. Find out more
The need for quick meals is more important for lower Class consumers and they are opting for affordable options in frozen food to cater this need. For example, in the Sausage category value growth for lower SES is triple that of upper SES shoppers.
This shows that lower class consumers actually have the aspiration, but need brands to give them access via the right price and value proposition.
In this post-pandemic world, many consumers are more aware of the importance of health and wellbeing, especially in food. Products with healthier credentials do have traction within this sector although it’s more niche. They are usually targeted at either children or senior member of families within the most affluent cohorts in Urban Areas.
Although the market is niche, consumers are willing to spend more on healthier and practical alternatives, so it offers brands good opportunities for growth.
As mobility picks up, On-the-Go Snacking is starting to rebound while In-Home has stabilised in recent periods.
The In-home occasions for total snacking sector - which consists of Snack, Biscuits, Chocolate, Confectionery and other RTE categories - grew rapidly in the pandemic because mobility was restricted. So year-on-year growth for In-home is higher, but recently has slowed down. In contrast, On-the-go occasion has rebounded and continues to grow, even in the recent quarter.
Kids are the core buyers of On-the-go occasion and are willing to spend more for total snacking products. Now they are back to school it’s driving faster growth in the sector, although there is also growth among Teens and Adults. Meanwhile, Young Adult shoppers seems to be spending more on Ready to Drink beverages or eating out.
#1 The importance of price-pack strategy
Understanding the balance between the magic price and the right packsize is key for brands to grab shopper’s attention and to secure a place in their shopping basket, despite changing behaviours.
Magic price refers to a specific price point where shoppers are willing to pay for one unit of product. In General Trade, which accounts for 80% of Snacking value share, the magic price has shifted from Rp 1,000-1,500 price point to 2,000-3,000 price point.
Because of mobility returns, convenience packs in the Biscuit category are showing a rebound for both In-Home and On-the-go occasion. For in-Home occasion, shoppers might be stocking up on convenience packs, while sacrificing family pack as they might have less sharing moments.
How much the consumers are willing to spend for each product in each trip? Which consumers group contributes higher to the overall Snack's value growth? Talk to our experts
#2 Innovate to extend recruitmentFlavours in snack is one of the key ways to attract buyers. This year, chocolate continues to hold the top position in term of value, But newly launched flavours, like Peach Yogurt, Brown Sugar, and Cheesy Milky Corn, are able to attract up to 1.5 million households each. This shows that innovation is still relevant in Snack categories and it’s important for brands to extend their innovation strategies.
#3 Seasonal occasions make a comebackAfter two years of restricted holiday seasons because of the pandemic, this year’s festive season is bigger and this trend is expected continue in future. Snack categories can benefit through seasonal packs that join in with the festivities and meet consumers’ aspirations.
This chapter uses Kantar's panel FMCG data per Oct 2022.
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