Industry Observations During a Global Pandemic
Written by Rommel Medrano, VP Integrated Marketing, UPBrand.
Experts are forecasting that there are still substantial hurdles ahead as the US now leads the world in confirmed Coronavirus cases. However, there are lots of reasons for hope. Our government is stepping up with an openly welcome relief package, while families and communities far and wide continue to do what they can to power through this temporary downturn.
Working under the presumption that we’ll all come out of this tight spot with an even stronger resolve, as potential thought partners, the team at UPBrand is putting that mindset into practice by continuing to think about the businesses and the brands represented by current and prospective clients alike. While some of the points made below may already be known, we’re sharing our observations as initial context for some ideas we welcome discussing further with you, as appropriate.
Our Curated Observations
At UPBrand, everything we do begins with data. Here, we start by putting together a collection of observations likely relevant to your business. If you’re interested in reading about each more in depth, you can find additional resources at the end of this post.
- According to the latest Nielsen Reports, staple CPG’s like bread, milk, eggs, produce and proteins, along with personal care and cleaning supplies, are up 40%; alcoholic beverages are up 30%.
- In descending order of retail activity, grocery leads the pack followed by club, mass, convenience, and drug.
- US consumers continue to look at brands that are represented well in the marketplace.
- Beverage brands pivot to increase activity during health crises.
- Craft and high-end segments are down, while value brands continue to perform well.
- Constellation Brands stock price has seen an increase of 7 points, or +5.76%. Drizly has seen a 300% spike in sales with consumer tabs up 50% more (with alcohol delivery sales on the rise).
- Consumers are stocking up on booze – just in case stores close. Ethanol category spending is up.
- Off-Premise retail sales for alcoholic beverages are up 40%, while On-Premise has been nearly decimated due to restrictions caused by the current health crisis.
- On-Premise sales personnel are being re-purposed as merchandisers for brands at the grocery and other retail channels.
- E-commerce ad spending has doubled between February and March, jumping to $9.6M from $4.8M.
- Online shopping for necessities has been especially popular among Generation Z and Millennials. 58% percent of people ages 18 to 39 said they had ordered grocery items online for store pickup, as compared to 34% of the general population.
Food for Thought
Given what’s taking shape at retail and online, it might make the most sense to pursue a two-pronged approach to promoting particular brand segments according to consumer demand:
- The Current State of consumer uncertainty in which value-priced brands are performing well; and
- The Future State as the health crisis wanes and consumers begin to feel more confident about spending more on premium and/or luxury brands once again.
The Current State: Off-Premise Focus
In uncertain times like now our observations show us that consumers often tighten budgets and opt for value brands. Premium and upscale brands tend to sit by the wayside, requiring promotion in order to remain a consideration among those willing to spend more on quality instead of quantity.
With this in mind, a 4-6-month-long program focused on keeping your brand front of mind and moving off the shelves might involve the following elements:
- Anchored by the potential theme of “Sip While We SIP (Shelter In Place),” we could perform an interactive home tasting event, virtually, with subject matter experts like Master Distillers.
- Another route would be to sponsor regional key accounts to host their own tasting events (virtually, of course). This demonstrates to your accounts and to the community that you’re in it with them.
- Other add-ons might include virtual, interactive games or live music from local or national recording artists.
- For non-alcoholic beverage brands, we could explore tie-in partnership opportunities with popular board game makers like Parker Brothers or Hasbro for high cross-merchandising potential
The Future State: On-Premise Focus
When discussing the future, you should consider how well prepared your brand will be for when the proverbial switch is flipped. In other words, we invite you to explore the necessary preparation of targeted programming that concentrates on boosting on-premise awareness and sales during the summer months (or, whenever appropriate).
Consider how your messaging is account-first, then think about how you might work with wholesalers, bar and restaurant owners, management, waitstaff, and bartenders to identify priorities and turn-key solutions to implement once on-premise is back in business.
- An example approach may be to extend the “Sip While We SIP” concept beyond virtual tastings with key accounts to perform tastings live on-premise.
Clearly, these are idea kernels that require deeper research, much discussion, debate, and refinement before ever seeing the onset of execution. The notion of compartmentalizing the focus and investment is purposeful and would be reinforced with a thoughtful digital strategy to complete collaborative efforts toward building your brand(s) during this unprecedented time and beyond.
If you’d care to learn more about UPBrand‘s experience and services and how we could become useful to your business, please contact Rommel Medrano, VP Integrated Marketing, at rommelm@upbrand or call 314.749.7068.
Resources Worth Exploring for Further Observations
- Brands like Clorox, Netflix, and Campbell are benefiting from the coronavirus. Most companies aren’t.
- Here’s What’s Been Flying Off Store Shelves
- Nielsen say beverage alcohol retail sales are soaring during the crises
- Just 8% of consumers think brands should stop advertising due to the coronavirus outbreak
- How are beverage brands coping in the face of COVID-19?
- Coronavirus quarantine sends online alcohol delivery sales surging
- Liquor outlets open and thriving
- E-commerce sites boost ad spend as COVID-19 drives orders
- Alcohol delivery sales continue to rise during health crisis