Is the recession a heyday for food storage products, as people look to streamline waste and conserve edibles?
Is the recession a heyday for food storage products, as people look to streamline waste and conserve edibles? Not fully, we think at F3, because households already have their storage regimens lined up, and haven't yet replaced older containers with new ones at rapid rates.
But as the weak economy and high unemployment persist, this could change very quickly, suggest the latest Nielsen data. Ongoing trends aren't about to end soon: Less dining out in the recession means more eating at home and more leftovers to store. It also means more 'brown bagging' of work and school meals, often in plastic bags or rigid plastic containers. People who buy meat or other commodities in bulk to achieve a lower price per pound want to preserve their food safely. And people who cook for a week at a time also need containers to store their planned meals.
Of all the food storage data provided by Nielsen covering the past three years, the most telling movement occurred during the two most recent quarters in U.S. food, drug and mass merchandiser stores (including Walmart). In the 13 weeks ended September 26, 2009, dollar sales of the food storage container segment rose 4.3% vs. the year-earlier period to $197.9 million, on a 2.7% equivalized unit volume (EUV) rise; this uplift ended a succession of four quarters of EUV decline. More dramatically, in the 13 weeks ended Dec. 26, 2009, dollar sales rose 6.0% vs. the year-earlier period to $187.2 million, on a 19.0% EUV jump to 184.4 million units, the Nielsen data showed.
The food storage container segment is the largest in the category (other segments include food storage bags, freezer bags and sandwich bags). In the latest 52 weeks ended December 26, 2009, dollar sales rose by 1.7% to $651.9 million, on a 2.8% EUV increase. The telling part of this growth is in the shifting balance between branded and private label. Dollar sales of the private label component soared by 11.6% to $82.5 million, representing a 12.7% share of food storage container sales, the highest ever and a rise of more than a full share point. By comparison, branded dollar sales nudged up a bare 0.4% to $569.4 million, representing an 87.3% share.
Food storage bags comprise the second-largest segment. Its dollar sales suffered a 0.5% dip to $476.0 million in the latest 52 weeks ended December 26, 2009, albeit on a 3.2% EUV increase to 5.72 billion units. What contributed to this apparent irony? A 5.4% drop in branded sales to $287.0 million, representing a 60.3% share, and a concurrent 7.9% dollar sales increase to $189.0 million, representing a 39.7% share, Nielsen reported.
Freezer bags, the #3 segment, moved up by 0.9% to $379.6 million in the latest 52 weeks. A 0.3% dip in branded dollar sales to $268.7 million partially offset a 3.8% climb in private label to $110.9 million. Sandwich bags, the #4 segment, slid 1.6% to $327.8 million, largely because branded dollar sales fell 4.9% to $135.6 million, while private label, the larger component, moved up 0.9% to $192.2 million, said Nielsen.