SPINS announced sizeable and important changes with the P8 August 22nd, 2022, data release. Once a year, SPINS has the opportunity to evaluate and implement product enhancements, through data restatement, including revised category/subcategory definitions, updated geographies and adjusted annual representation of channel definitions and market size. This allows SPINS to provide structure to meet the ever-changing needs of customers and consumers, while giving retailers the chance to refine how they view their business within the SPINS data ecosystem and reflect changes within the market (store opening/closings). For more details on the SPINS Restatement, click here.
With the release of P8 data, it’s a great time to get a pulse on the latest insights…
Growth of the Industry
Cross-channel market performance continues to post healthy growth. Based on the past 52 weeks, total market is up 7% (+$54B) versus last year, with a 5% year-over-year average growth for the past three years. All departments contributed to the overall market expansion, apart from alcohol; however, the sales growth was driven primarily by an increase in average retail price. Unfortunately, the rise in pricing is not shocking, as ‘at home food’ inflation continues to rise, hitting 13.1% for July 20221.
Source: SPINS Total US Natural Channel+MultiOutlet, 52 Weeks ending 8/7/2022, Departments Sorted by Volume (high-low)
Product Positioning
While all product types posted growth for the most recent 52-weeks, their overall contribution to total growth has shifted since the beginning of 2022. At the start of the year, health and wellness products contributed most of the growth (63%), however, with inflationary pressures and lingering effects from the pandemic (supply chain issues, outs of stocks, consumers trading down, etc.) the narrative has changed as the year has progressed. Although conventional products are now benefitting from this shift, health and wellness (HWI) positioned products continue to capture consumer attention and spend. It’s also worth noting natural product growth outpaced (+8.7%) all other positioning groups.
While looking at the rolling 52-week performance, by positioning group, we can see sales growth has slowed across all product types since the peak in early 2021. The slowdown was comparable across all product types, until the beginning of 2022, where we see a downward shift in specialty and wellness products and an increase in conventional product growth. The growth of conventional has now closed the gap to natural products, aiding in the overall shift in growth contribution. Conventional sales growth was also heavily supported by the average price increases seen in the past 13 quads. While health and wellness ARP increased an average of +6.6% over the last 52 weeks, conventional products saw double-digit (+10.9%) average price increases for the same timeframe.
Source: SPINSScan Natural Enhanced (proprietary), Conventional Multi Outlet (powered by IRI), rolling 52 weeks dollar % chg, coded items only
Health and Wellness Impact
Even with the recent traction of conventional products, there are plenty of health and wellness product bright spots. Looking across departments, HWI products continue to contribute more than their fair share for departments including, pet, grocery, refrigerated and body care, indicating these products remain desirable to shoppers. Additionally, when looking at the roughly 3,600 recently introduced items, across total store, we see most (61%) new items fall under the HWI umbrella, which is encouraging.
Consumers Remain
Health and wellness products continue to excel, as they meet the needs of today’s consumer. Shoppers expectations around cleaner ingredient profiles, items that tout humane treatment of animals (pasture raised +17%) and plant based (+6%) positioned products, are winning. Buyers also remain focused on products that are geared towards helping the environment, specifically packaging that emphasized reusability, upcycling (HWI +239%), and low-waste solutions. We see HWI sales up across all items that check off these consumer expectations. Diet centric attributes, such as Paleo (+19%), Grain Free (+17%), or Vegan (+12%), are also being met by HWI offerings.
Sources: https://www.bls.gov/cpi/ 1
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Looking for more information? Please contact the SPINS Account Manager for PRESENCE, Mike Murphy at mmurphy@spins.com.