If you haven’t been able to find your favorite breakfast cereal for months, you’re not alone. Demand from more remote workers eating breakfast at home is making popular products disappear from grocery shelves like hotcakes.
Other factors contribute to the absence of your favorite brands at the grocery store. COVID supply chain disruptions are causing havoc in time-honored distribution methods. Shipping containers sit idly off the coast unable to unload for lack of dock workers. Labor shortages in the trucking industry is impeding products from getting to retail locations.
Consumers are making changes and trying different products to fill the void. So much so that more than eight in ten consumers purchased a different brand than they normally use during the past three months alone. Sometimes this is due to the absence of their go-to choice. But in even more cases, it is based on price.
Manufacturers, too, are feeling the squeeze from rising costs in bringing their products to market, worsened by ingredient shortages and rising fuel costs. Some of the big chains like Coca Cola, Unilever, Nestle, and General Mills have opted to pass the extra expense down the chain. But consumers aren’t buying it. Some 65% of customers have switched brands “often” or “very often” in the past 90 days, influenced by lower prices from substitute brands. Of the consumers who switched, 44% said they would stay with the new, less expensive product even if the preferred one were back in stock.
Categories most affected are dry grocery products such as crackers, cookies, and cereals, making up 66% of the migration. Kellogg recently announced its intentions to spend $45 million over the next three years in restructuring their supply chain throughout North America to help meet demand. Frozen foods have also taken a hit, where 55% of consumers have switched to new brands. Non-alcoholic beverages comprise 46% and alcoholic beverages 42% of the market where consumers are moving to different brands in the current climate.
Lack of brand loyalty hasn’t been bad news for everyone. The new environment created opportunities for smaller brands and private labels to make inroads with a larger percentage of the customer base. Will consumers return to their normal shopping behaviors when the dust settles? Read more here: https://www.marketingdive.com/news/brand-loyalty-is-eroding-under-supply-chain-and-price-pressures-survey-fin/606694/