New reports from two respected consulting firms offer insights on how both consumers and consumer packaged goods companies (CPGs) are adjusting to the bad economy. More...

New reports from two respected consulting firms offer insights on how both consumers and consumer packaged goods companies (CPGs) are adjusting to the bad economy.

Deloitte and Harrison Group recently released The 2010 American Pantry Study: The New Rules of the Shopping Game. The study posits that shoppers have been forced by economic pressures to become more “strategic, informed-and even calculating,” and less likely to be “driven by impulse.”

Highlights of the survey behind the study include:

• 89% of shoppers say they have become “more resourceful” when they shop.
• 84% say they are “more precise.”
• 65% said that although they are spending less, they don’t feel they are sacrificing much.
• 93% said they will remain cautious and keep spending at their current level, even if the economy improves.
• 75% are more open to trying private label products than two years ago.

The report establishes four categories of shopping habits. “Super Savers” hunt for the best bargains at the cash register, often though sophisticated coupon management. “Sacrificers” do more comparison shopping, use more store brands and are more likely to forego convenience. “Planners” draw up grocery lists and menus, and set spending limits. “Spectators” are the most loyal to store brands, but “still strive to be resourceful” through means like in-store discounts.

The second report, from Pricewaterhouse Coopers (PwC), details the recession-related behavior of CPGs. Forging Ahead in the New Economy states that the food and beverage sectors are maintaining their status as “counter-cyclical” industries, meaning that they resist the downward pull of recessions better than other sectors (while not growing as much as others during expansions).

Specifics of their performance include:

• The food sector as a whole cut spending, with a nearly 2 percentage point drop in median selling, general, and administrative costs as a percentage of sales.
• Beverages experienced a 1.6% drop in sales, the first decline in five years.
• Nevertheless, food companies had a median five-year shareholder return metric of 6% last year, while beverage companies had a 5.3% increase.

Despite their resistance to recessionary pressures, food and beverage companies still have to make adjustments, says Lisa Feigen Dugal, PwC’s North American consumer packaged goods and retail advisory leader: “CPG companies are operating in a new environment, characterized by more cautious, value-driven consumers and volatile commodities. It will be tough to succeed using the same tactics employed during the recession.” Possible adjustments include new trade promotions programs for retailers, social networking campaigns, and products targeted toward emerging markets.