Baby Boomers, E-Comm, and Sustainable Mac 'n' Cheese: CPG News, Week of Jan 18-22

by Veronica Drake

7 Minutes



Good Reads

Three Ways Visual AI Can Optimize Retail Supply Chains by Idan Pinto, Supply Chain Brain

The Demand Supply Chain: How To Win As The Bar Continues To Rise In The Retail Industry by Chris O'Brien, Global Trade

How supply chains adjusted demand forecasts during the pandemic by Matt Leonard, Supply Chain Dive

How Shopify became the new retail empire by Cale Guthrie Weissmann, Modern Retail

How AI Is Transforming Global Supply Chains by Doug Mefford, Supply Chain Brain


Marketing to Match Sales

In light of increased consumer demand for household and healthcare products during the pandemic, Procter & Gamble raised its marketing spend 7% in Q4 of 2020, a change that the brand says is well worth it for the growth it’s experienced since the pandemic began. After a particularly effective sales strategy in the past year to match a turbulent market, e-Commerce sales have jumped 50% compared to one year ago, while the company’s overall sales growth is up compared to previous estimates.

Consumers have displayed an overall heightened demand for household products and e-Commerce shopping options during the pandemic, two trends that P&G expect will continue even as life inches toward returning to normal. Amid these market changes, P&G vice chairman, COO, and CFO Jon Moeller believes that the company is at an advantage. "The importance of noticeably superior performance, potentially gross, there's potential for increased preference for established reputable brands that solve newly framed problems better than alternatives, potentially less experimentation, potential for a lasting shift to e-commerce, both e-tailers and omnichannel," he said.

While initial stock shortages did cause consumers to switch to new, smaller brands for some of their favorite products, there has been a demonstrated preference for well-known, classic brands during the past year because of their perceived reliability and high performance. 


Baby Boomer Ecommerce Boom

When social distancing was identified as a key strategy to staying safe and avoiding infection, online shopping became a surprisingly popular way to shop for consumers in their 60s, 70s, and even 80s, according to data. While it isn’t historically a method of choice for those demographics, its safety advantages combined with its ease of use have led to a 49% increase in the average amount spent online by shoppers 65 and older, making it the fastest-growing age group of e-Commerce spenders. And while it began out of necessity, especially important for older consumers because of the virus’s particular severity in older people, the switch could be permanent for many. 

Baby boomers are a desirable demographic because of their loyal nature as customers, and also because of their higher disposable income compared to younger age brackets: in 2018, consumers 50 and older accounted for 56% of U.S. spending. Despite this, the group is often overlooked in marketing strategies for e-Commerce companies because of a general sentiment that they are not target customers for their services. This is a costly mistake, and one that Mulberry & Astor, a marketing firm that works with tech startups, realized early on in the pandemic.

Instacart reported that the number of sign-ups from shoppers over 60 has tripled, while Thrive Market says that 1 in 4 customers is now older than 65. While not everyone is a fan of this new way of shopping (reports show that especially for shoppers who enjoyed their weekly grocery trips and have particular preferences for their items, it hasn’t caught on as well), this period has demonstrated that the reach of online shopping is wide, and can be stretched further with the correct marketing strategies. Several companies have plans in the works to make the experience even simpler, while the verdict for many is that pandemic or no pandemic, their shopping trips have changed forever.


Instacart Evolution

Just under a year after a group of Instacart workers at a Mariano’s grocery store in Illinois voted in a historic move to unionize, Instacart has announced that these employees will be part of 1,800 in-store shoppers whose jobs are being cut. The change comes partly from stores’ shift to using their own employees to gather online orders, while Instacart has announced that the cuts are part of a bigger change in the way the delivery service works with its retail partners. The transition is set to begin no sooner than March, although workers, especially those part of the Union, are upset that after months of effort, the change in business model has put an abrupt end to it. 

Instacart has stated that it can help in-store employees transition over to contract workers, although many workers don’t see it as a solution because of the discrepancy in benefits and protections that the two groups face. In-store workers are eligible for benefits and receive an hourly wage, while contract workers are not, and are responsible for both shopping and delivering the orders to consumers’ homes. Instacart says that its part-time workers are significantly more expensive than its contracted employees, and that it began reducing the number of part-time workers in several regional markets. Despite a huge growth in the company in 2020 because of the pandemic’s influence, the move reinforces that store/service relationships are evolving.


Investments & Acquisitions

Killer Creamery closed a $1.5 seed round late last year that they say will help them innovate in the better-for-you ice cream category, with plans to release a BFY ice cream sandwich.

Beauty company Ipsy has committed to investing a total of $7 million in a range of Black-owned beauty brands, CEO Marcelo Camberos announced this week. Additionally, they are launching their Beauty Amplified program, which will work to highlight Black-owned brands by including them in the company’s monthly Glam Bags.

Cell-based seafood company BlueNalu will receive $60 million to continue development of its California headquarters and help bring its never-fished Mahi Mahi, which is currently awaiting FDA approval, to the U.S..


New Products & Partnerships

Yolélé Foods is introducing a line of Fonio chips, inspired by ingredients and flavors used in West African cuisine. The chips are the brand’s first snack product, and will be available for purchase next month in four flavors.

Kind Healthy Snacks is putting its healthy eating message into practice by launching Kind RD Connect, a program that connects individuals with registered dietitians in their area. In a company statement Kind said that the program was inspired by the current health crisis the country is facing, and will be available through February 18th.

Kraft-Heinz is taking a sustainable step by testing out their first recyclable cup, a cardboard bowl for its microwaveable mac & cheese product. The cup would also lack a plastic label, making it recyclable and compostable, and would support the company’s goal of 100% sustainable packaging by 2025. 

About Unioncrate

Unioncrate is an AI-powered Supply Chain Planning Platform that gives CPG brands the technology they need to compete and win in a rapidly changing consumer landscape. Our automated demand and supply forecasts deliver unmatched accuracy, collaborative visibility, and actionable intelligence, simplifying a manual-heavy process and slashing hours from your week.

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