A $4 billion category skids the past two years, as consumers tighten their spend on food-wrap materials and bags.
To be sustainable and economize, it appears that households prepare meals, dispose waste and store leftovers using less food-wrap materials and bags than before. If so, consumers might repurpose bags in which they transport groceries, and reuse bags made to pack meals on the go. Some also opt for rigid plastic and glass food storage containers over disposable wraps and papers.
If these are the reasons for the two-year category decline, retailers will continue to be hit in both sales dollars and margins. Dollar sales of food-wrap materials and bags rang up a bit under $4 billion in 2009, but dropped about 10% since then to stand at $3.61 billion in U.S. food, drug and mass merchandiser stores (including Walmart), according to Nielsen data.
Specifically, the category’s 3.4% dollar sales dip in the 52 weeks ended April 16, 2011 followed a 6.1% drop a year earlier. These drops occurred on successive declines of 2.2% and 3.6% in equivalized unit volume.
Since store brands represent significant share in 11 of the category’s 12 segments, retailers feel this decline in margins too. Only the oven bags segment is practically all branded (99.7% share of dollar sales). The rest range from plastic wrap (23.2% store-brand share) to paper bags (92.3% store-brand share), with most in the 20s to 30s percent range.
In cooking segments:
In meal packing segments:
In food storage segments:
In waste and lawn disposal:
Equivalized unit volume was down for every segment except sandwich bags in the most recent 52 weeks.