How did COVID-19 impact global FMCG spend by region, by sector and by category.
In 2020, global take-home FMCG value growth quadrupled to 10%, from 2.5% in 2019 – an increase of $220 billion.
Except for Eastern Europe, all regions saw faster growth. The impact of COVID-19 was most pronounced in Latin America, the USA, and Western Europe, all moving from flat or slow growth to double-digits. Denmark was the market with the fastest growth, at 23.5. USA growth at 14% was the biggest overall contributor.
In Asia, which did see an acceleration but a small one, the growth rate remains fragmented. India saw the strongest growth at 10.4% (doubling from 2019), and Japan moved from being in decline to growth. Whilst the Philippines declined -6.4% in 2020, the biggest seen last year, and at the same time, Chinese Mainland—the largest market in the region—saw FMCG slow to just 0.5% growth.
Eastern Europe's slowdown was due to Russia, where FMCG fell from 8.4% growth to 5%. All other markets in the region saw a similar pattern to markets in Western Europe or Latin America, with growth rates doubling or tripling.
In the 2020 Omnichannel paper, we reported some of the initial changes we were witnessing as a result of early COVID-19 impacts. The stockpiling effect was evident with growth in Q1 at 8.7%, already significantly higher than anything we had witnessed in recent years. One outlier to this was Mainland China, where lockdown protocols prevented the normal uplift in FMCG spending expected for the Lunar New Year.
In Q2, FMCG growth reached its 2020 peak at 13.6%. More and more markets entered lockdown, and we saw the true impact of out-of-home eating and drinking occasions shifting to in-home -- which we explore in full later in this report.
And whilst growth slowed very slightly through the second half of the year, it remained close to 10% as markets struggled with the pandemic and most never fully re-opening the hospitality trade. These out-of-home occasions continued to take place in-home, including during the important Christmas period.
With COVID-19 always in the news and social occasions limited, the different impact on the five sectors of FMCG was clear.
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These three sectors – which accounted for 74% of FMCG value in 2019 – grew at 8.6%, 10.3% and 11.4%, respectively, with out-of-home consumption moving in-home throughout most of 2020. Fifteen of the top 20 categories most positively impacted by COVID-19 came from these sectors.
And there are examples of winning categories from these sectors that show the different types of behaviour we witnessed last year.
Sugar & Sweeteners, Herbs & Seasonings, and Olive Oil might be the opposite of quick-cooking solutions, but their growth showcases the increase in scratch cooking and home baking seen in 2020.
Wine and Beer were the two drinks categories that did best in 2020, as consumers looked to replicate the bar experience at home. However, this is far from consistent across the globe. Both categories saw an increase in demand from Europe and Latin America but saw a decline in the North Asia and APAC regions.
The Homecare sector grew at a similar rate as total FMCG, at 9.8. Increased demand was generated by an increased focus on hygiene and cleanliness combined with spending more time in the home.
This increase led to Bleaches and Household Cleaners seeing a growth of 25% and 21%, respectively – two of only six categories which saw growth over 20%. And linked to the increased in-home food consumption, the Dish Wash category benefitted with a growth of 12%.
However, it wasn't all positive. Laundry Detergents saw no positive impact from being in lockdown, with global sales remaining flat, having seen a modest 5% growth in 2019.
With the lack of social interaction, the Health & Beauty sector went from being the strongest growing in 2019 to the only sector in decline in 2020. The decline is evident in the categories. Make-up saw the biggest fall of any FMCG category, declining 17% – a swing of 24% having been in 7% growth in 2019.
Skin Moisturising, similarly, saw a significant swing in fortunes. From double-digit growth in 2019 to 1% last year, the biggest category within Beauty is a good indicator of the overall health of the sector.
Despite this drop in demand for the sector, there were still a couple of shining lights. Hand & Body Wash accelerated from 6% to 16% growth, with the importance of hand washing bought to people’s attention.
Beauty Wipes grew from 8% to 19%, driven by the “Untact” beauty trend, with users wanting minimal contact between their hands and faces.
Sanitisers growing ten-fold The growth of Hand & Body Wash was seen across almost every market and it was particularly strong in Vietnam. When we break down the category further here, Shower Gel grew +23.6% (with Hygiene the only segment in the sub-category to be growing), Hand Wash almost doubled (+96% growth) with penetration moving from 32% to 45.3%, and Sanitizers grew by 1065%, with penetration increasing from 1.7% to 19.2%. This strong growth has seen many new entrants to the category, with an additional 131 active new variants in Sanitizers. And the increased focus on Hygiene looks set to stay, with 59% of Vietnamese households saying they will maintain the habit once the lockdown is over.
Access further information on FMCG in Vietnam
Key takeaways
Global take-home FMCG grew by 10%, $220 billion, in 2020. But this is an effect of COVID-19 definitely not a trend. And whilst the positive impact was seen in most regions in the world, Mainland China (the second largest market globally) saw the opposite and slowed.
Beverages, Dairy and Food all benefitted from out-of-home consumption moving in-home, whilst the Homecare sector and Hand & Body Wash category grew rapidly with an increased focus on hygiene – a trend set to stay.
