Small, extra-small and private label CPG manufacturers gained market share in 2020

A new report organizes pandemic-related consumer shopping trends into three categories based on their projected longevity.

March 3, 2021

3 Min Read
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Today IRI and Boston Consulting Group (BCG) published their ninth annual CPG study, revealing that the total CPG industry grew roughly 10.4% in 2020, significantly outpacing the prior three-year compound annual growth rate (CAGR) of 1.8% due to COVID-19-related shifts in consumer shopping and consumption behavior. The report also predicts how consumer trends that emerged during the pandemic will perform in 2021 and reveals 2020's growth leaders among large, medium and small CPG companies. 

"As a result of pandemic-driven changes in consumer habits, many CPG companies now face the difficult task of predicting how those habits will continue to evolve as consumers adjust to the new normal," said Dr. Krishnakumar (KK) S. Davey, president of Strategic Analytics for IRI. "In addition to highlighting the companies that most successfully drove growth through the pandemic, our report helps companies prepare for the year ahead by predicting the future trajectory of consumer trends that emerged in 2020. By providing insight into which trends are likely to cease and which are here to stay, we are enabling companies to adjust their strategies and plan appropriately to continue growing in 2021." 

The report organizes pandemic-related consumer shopping trends into three categories of trajectories to be expected in 2021: one-time COVID-19 impacts that will cease as social distancing and stay-at-home orders are lifted; accelerating trends with growth that quickened during 2020; and new trends that emerged as a result of the pandemic. 

One-time COVID-19 impacts

  • In-home versus away-from-home consumption: On-the-go and on-premise spending will regain share from center store (e.g., frozen, shelf-stable ingredients, in-home indulgence) as consumer mobility increases and they scale back on in-home consumption. 

  • New product discovery: In-store product discovery that slowed in 2020 as shoppers focused on getting in and out of the store quickly due to COVID-19 concerns will return in 2021. 

  • E-commerce channel penetration: Acceleration in e-commerce penetration and increased investments from retailers.

  • Bifurcation of spend: Increased premiumization via large CPG innovation and hyper-targeted small CPGs and continued development of small and own brands at multiple price points.

  • Product benefits/innovation: Self-care, societal care, convenience and indulgence trends will continue well into 2021.

  • Pricing: Price levels will likely remain elevated, compared to prior years, as inflation takes hold.

  • Growth in retail media: Retailers will continue to invest in targeted offers and monetize their online properties with digital media platforms, even as they try to cover the increased costs of omnichannel fulfillment. 

  • Right-sized packs: Consumers will look for "right-sized" (smaller, single-serve, multipack) products as they revert to pre-pandemic consumption patterns.

  • Convenience rebound: Convenience channel will rebound as mobility increases. 

  • Variety: Assortment and variety will improve as retailers compete to retain shoppers and meet emerging needs in-store and online. 

Growth leader rankings

Bimbo Bakeries U.S.A. was the growth leader among large companies with more than $6 billion in 2020 sales, reflecting a strong return after not making the list in 2019. Bimbo Bakeries U.S.A. is followed by General Mills, Mondelez International, Conagra Brands and RB; these are the top five leaders. Among midsize companies with $1-$6 billion in 2020 sales, Mark Anthony's saw the most growth and Vi-Jon Labs was the growth leader of smaller companies with less than $1 billion in 2020 sales. 

The study also found that small, extra-small and private label CPG manufacturers gained significant market share over larger manufacturers in 2020. 

Shane Faucett, chief customer officer for Bimbo Bakeries USA, commented on being named the top growth leader among large companies. "As the pandemic emerged, we named 'Feeding America while Staying Safe' as the priority for our 20,000 associates," he said. "As we strived to serve customers and consumers, it was exciting to see these efforts result in industry-leading growth, and we have celebrated the IRI-BCG study with our team." 

"2020 was a year unlike any other in consumer products, and the short-term outlook for 2021 is still very unclear for most CPG companies," said Peri Edelstein, managing director and partner at BCG. "However, we do see COVID as a clear tipping point in the impact of digital in CPG, and e-commerce penetration and digital consumer engagement will continue to accelerate in importance." 

Source: IRI

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