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Bad News For Biggest Brands: In-Store CPG Sales Volume Slipped During 1st Half Of ‘15

Total sales numbers at grocers and markets were flat for the top 100 Brands, as the biggest 62 brands saw declines, Catalina says in its mid-year report.

A shift in shopping patterns seemed to emerge in the aisles of grocery, drug, and mass market stores during a 52 week period ending June 30th of this year, as consumer packaged goods-focused data and advertising network Catalina found a slight decline in sales volume during that time frame for the largest names on store shelves.

While Catalina isn’t naming names, the flat sales volume for the top 100 consumer packaged goods brands — and the 4.4 percent collective decline among 62 of the top 100 brands that lost revenue — appears odd at first glance, since Catalina also notes that every major category in which these brands compete in actually experienced gains of roughly 5 percent. (A PDF of the report can be downloaded here.)

A Matter Of Choice

“It comes down to the fact that the product choices for consumers have increased significantly over the past few years,” said Beth Johnson, executive director, Special Projects at Catalina. “Marketers are listening when it comes to consumer demands for differentiation in the products, whether it’s for ‘organic’ or ‘gluten-free’ items. There are 22 new brands in this mid-year study versus last year’s. So there’s a lot of switching within categories and brands.”

catalina chartThis is Catalina’s third mid-year study. And the trend of two-thirds of the top brands showing flat or declining sales has been part of the pattern shown in the previous two reports. The bottom line, Johnson said, is simply that consumers are leaving some of the most established brands and trying new ones that make specific appeals, most often based on health.

A Loss Of Loyalty

“We call that a ‘loss of loyalty,’” Johnson added. “That 4.4 percent decline that brands are experiencing is clearly preventable, to some degree. While there’s always churn present in any product category, stronger, more personalized messaging and providing stronger reasons for consumers to remain brand loyal are what’s in order. So there is still a great opportunity for brands to reverse the trend.”

Whether or not that happens, some of the specific findings of Catalina’s report include:

  • Across all 14 mega-category segments in which the Top 100 compete, category growth significantly outpaced the performance of Top 100 brands.
  • Ninety of the Top 100 brands lost category share during the 52-week period.
  • Sales volume for the Top 100 brands in Catalina’s network was $56.8 billion during the 52-week period ending June 30, 2015, compared with $57.3 billion in the previous 52-week period

As part of its solution for CPG brands it works with, Catalina has developed two metrics pertaining to gaining and losing buyers.

The first is the “Brand Shifting Interaction Index,” which looks at sales volume switching between brands. When a brand shifting index score exceeds 120, a brand is considered highly substitutable.

In 12 of 14 mega-categories Catalina reviewed, the brand shifting index between Top 100 brands and Private Label brands averaged 158, meaning that Top 100 brands exchanged volume with Private Label 58 percent more than would be expected based on a normalized share.

The New Buyer Attraction Index looks at how well brands perform in attracting new buyers to a category. In the New Buyer Attraction Index, Top 100 brands scored higher than their share of the category in six of 14 mega-categories, while Private Label brands also scored higher than their fair share in 7 categories.

“The Top 100 review shows just how competitive today’s CPG marketplace is for major brands,” said Todd Morris, president of Catalina U.S. “Maintaining and increasing category share versus a growing range of national and private label competitors is as challenging as it has ever been, particularly at a time with increased fragmentation of consumer preferences and growing diversification of product choices in many categories.”

In terms of the report’s methodology, Catalina looks at the sales and loyalty performance of the Top 100 Brands from a sample of the Catalina network that spans across 26,000 food, drug, and mass retailers. Although this does not include all retailers within the Catalina network, the conclusions in this report are generally in line with national network results. The study examines sales volume and loyalty changes between the 52-week periods ending June 30th.

About The Author
David Kaplan David Kaplan @davidakaplan

A New York City-based journalist for over 20 years, David Kaplan is managing editor of GeoMarketing.com. A former editor and reporter at AdExchanger, paidContent, Adweek and MediaPost.