Wednesday, 6 January 2021
COVID-19 has inevitably resulted in consumers eating more in-home resulting in significant increases in retail grocery spending, +8% in the 52 weeks ending the 9th August (Kantar).
Shifts have been seen in how consumers shop, what they are shopping for and therefore what they are cooking (more information here). This is benefitting some food sectors more than others. In this article we look at how this change in consumer behaviour has impacted the performance of potatoes versus other carbohydrates.
Carbohydrates in retail
76% of consumers agree that carbohydrates are an important part of a healthy diet (AHDB/YouGov tracker, Aug 20). This importance has translated in to total carbohydrates identically mirroring total grocery performance at +8% spend (and volume) over the COVID pandemic (Kantar, 52 w/e 9th Aug 20). Pasta, rice, noodles and potatoes have all seen a strong volume growth. However, total carbohydrate volumes have been held back by bread.
Although still seeing a substantial increase of nearly 6% in volumes, bread has not performed as strongly as the market, or other carbohydrates, due to a significant decline in the number of carried out meal occasions. With schools closing ahead of the Summer break, and guidance to work from home, carried out occasions in the peak of lockdown were 79% smaller than pre COVID (Kantar Usage, 4 w/e 19th April 20) and even in the 4 weeks to November with some easing the market remains 34% smaller, nowhere near recovered. Sandwiches, a typical lunchbox staple, have suffered the most and despite them being an easy, convenient in-home lunch too, more time at home has resulted in a rise in hot lunch occasions at the expense of cold.
This trend however has positively impacted the other carbohydrates that need cooking. With more time, convenience has been replaced by more scratch cooked occasions and with treating trumping health needs during lockdown other carbohydrates benefitted.
Pasta and Rice
Pasta was the fastest growing carbohydrate seeing an increase of nearly 15% in volumes. Unsurprising as top growing dishes include pasta bake, lasagne and spaghetti bolognese, comforting foods which are forefront during uncertain times. Similarly rice was boosted by more chilli con carne occasions. Another benefit for these categories is the requirement for long usage dates which have become a top need for shoppers since the start of the pandemic, with 29% of potato shoppers claiming this has become more important to them (AHDB/YouGov tracker, Aug 20). This is reflected in dry pasta performance which accounts for 90% of pasta growth (Kantar, 52 w/e 9th Aug 20).
The need for longer storage times has also benefitted frozen categories including frozen potatoes, with chips increasing volumes double digit at +10%, and long life goods such as crisps. Crisps were actually the fastest growing potato product at +12% volumes, being long life but also an easy go to snack which has increased in importance. Other frozen potato products, such as frozen jackets or waffles, have not performed as strongly (+5% volumes) highlighting encouragement is needed in store through meal inspiration and tactical support. A shift in promotional strategy to frozen could benefit the potato category as frozen has seen a price increase in the last year while fresh has seen a significant decrease, that is potentially driving value out of the market.
Fresh potatoes have increased massively in volumes by +8.5%, as we see more jacket potato lunches and shepherds/cottage pie dinners. However, value has only grown +3%, as price has dropped -5% (Kantar, 52 w/e 9th Aug 20). This is driven by increased promotional activity for fresh potatoes at a time when the grocery market cut back on promotions as consumer demand was already high. Undoubtedly promotions are a good driver of conversion, and key as consumers become more price conscious. However, for a staple category like fresh potatoes, consumed by 78% of consumers weekly (AHDB/YouGov Aug 20), could the price cuts be utilised elsewhere? One such example being the chilled potato category which is more premium and actually hasn’t seen any volume growth during the pandemic.
Instead in store communication for fresh potatoes could focus on their perceived benefits versus other carbohydrates. Despite growing at a slower rate than pasta and rice, fresh potatoes continue to be regarded as the most versatile and the best source of carbohydrate as well as fibre. Opportunity areas lie in increasing messaging around ease and reassuring about health credentials.
More granular retail performance for potatoes can be found here: https://ahdb.org.uk/consumer-insight-potato-retail-market