US & Global Economic Impact Analysis and Forecasts

Freedonia analysts and economists are sharing their insights on how major events are impacting different parts of the US and global economies.

Cereal: Is it Popular Again Just For Now or Will the Habit Stick?

Before the coronavirus pandemic, the main story on breakfast cereal was that it was just one more thing that millennials had killed… they don’t like using dishes and utensils for on-the-go breakfast, they are looking for more protein content in their breakfast, they don’t eat breakfast anymore, etc.

Then came the pandemic and demand for breakfast cereal shot up, from the sugary kids’ cereals to the high-fiber “adult” cereals. We were looking for foods we could easily stockpile. We were eating breakfast at home, not on-the-go. We were leaning into nostalgia and comfort foods, as well as those with a health halo.

But, a year on into the pandemic… more kids are back in school, and more people are vaccinated and looking to go back to at least some of their pre-pandemic habits.

So, what’s next for cereal? How do cereal companies move forward and keep those renewed cereal habits going?

Packaging is part of the story. Package it perhaps in a stand-up pouch for dry consumption, as a snack or a topper for yogurt or oats. Package it for individual servings in a single-use bowl (preferably molded fiber or other eco-friendly type) for away-from-home consumption. Package it for e-commerce, considering the minimum needed to protect the cereal in-transit while saving space in shipments.  

Reformulating is another part of the story. Elements that add protein or versions that are made gluten-free, vegan, or with less sugar appeals to many modern consumers. Additionally, classic, fun flavors have nostalgic appeal and attract those who look for a treat or dessert, so incorporating classic flavors or brands into snack bars, cookies, ice cream, or other complementary food items gives consumers more ways to enjoy cereal.

Marketing and reframing is the rest of it. Cereal companies were already doing some of this before the pandemic, but cereal need not only be for breakfast. Other eating occasions that fit this sweet, but nutritionally fortified, nostalgic treat include snacking and dessert. For many older consumers, favorite childhood cereals are now too sweet for the morning meal, but are attractive as an end-of-the-day mini-indulgence.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including the packaging category with titles such as Pouches and Corrugated & Paperboard Boxes. Related food and beverage industry analysis from our sister publisher, Packaged Facts, include Global Breakfast Cereals, Dairy & Egg Alternatives: Outlook for Plant-Based & Cell-Cultured Consumer Products, Vegan, Vegetarian, & Flexitarian Consumers, Home Baking: US Market Trends & Opportunities, US Food Market Outlook 2020: Home Cooking, Grocery Shopping & Food Trends in the Age of Coronavirus, Global Food E-Commerce, and Online Grocery in the US. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Food & Beverage    

Ready-to-Bake v. Ready-to-Eat: You Can Now Get Both From Pillsbury as the Company Preps For a Post-COVID World

The coronavirus pandemic left many of use ready to eat ALL. THE. COOKIES.

In The Freedonia Group National Online Consumer survey (conducted November-December 2020), 51% of respondents agreed that they were eating more snacks and treats because of the coronavirus pandemic, and 25% of those who bake noted that they have baked more since the start of the pandemic.

However, in 2021 we are also looking to see where we go next…how many pandemic habits will we continue and what can companies do to support customers continuing habits started or expanded during the pandemic?

For instance, General Mills’ Pillsbury line – one known for ready-to-bake cookies, crusts, biscuits, and crescent rolls – is launching its first ready-to-eat baked cookie with a line of packaged cookies with a soft texture reminiscent of home-baked versions. As pandemic restrictions ease and we return to a world with daily commutes and kids eating lunch at school, consumers will seek more convenience for their indulgences, creating space in the market for products that give us a feeling of comfort with additional convenience.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Pouches and Frozen Food Packaging. Related reports from our sister publisher, Packaged Facts, include Home Baking: US Market Trends & Opportunities, Consumer & Corporate Food Gifting in the US, US Food Market Outlook 2020: Home Cooking, Grocery Shopping & Food Trends in the Age of Coronavirus, Global Food E-Commerce, and Online Grocery in the US. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Food & Beverage    

Pandemic Baby Boom…or Baby Bust?

Initially, many thought that stay-at-home orders and boredom would trigger a mini baby boom. For some couples, that has been the case…particularly among those who weren’t overwhelmed by the increased care responsibilities that the pandemic created for many families.

However, overall, there is evidence of a larger-scale baby bust, as

  • couples unable to celebrate how they would like delayed marriages
  • unemployment left families feeling too financially unstable to support a larger family
  • couples were overwhelmed by supervising home school with their kids while they tried to get their own work done
  • feelings of pandemic dread left families feeling less optimistic about the future and less open to expanding their families

This could have lasting effects on the global economy, particularly if it continues. Short term effects obviously include reduced demand for baby products from wipes and diapers to food, clothing, toys, and furniture. Longer term, reduced birth rates – particularly in areas such as the EU and Japan that have struggled to keep their birthrates up enough to sustain population levels – could lead to additional aging of the population, with fewer workers to support those aging out of the workforce.

The Freedonia Group Consensus Economic Indicators show a 0.7% reduction in births in the US between 2019 and 2020, a continuation of the general trend of the past decade. However, the large millennial generation is expected to support a return to growth in the number of births through 2025, even as overall population growth in the US – powered by immigration – continues to outpace gains in the number of births through the same period.  

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research. Freedonia also offers a catalog of COVID-19 Economic Impact reports, which highlight how various industries are responding to the current crisis with a comparison to recent recessions. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Covid-19      Services    

Grocery Sales: 2021 Outlook

Historically strong year for retail grocery sales in 2020 were driven by a variety of factors, including:

  • the shift home – meals were cooked at home rather than in school cafeterias and restaurants near workplaces
  • stock-up efforts to minimize shopping trips – especially early on in the pandemic period
  • restaurants closed or dine-in capacity was limited – consumers were not going out with friends or eating on the go

However, that won’t last. More people are being vaccinated, pandemic restrictions are being lifted or will be in the coming month, more people are returning to workplaces, and schools are opening for in-person learning.

As a result, many major grocers are expecting declines in same-store sales in 2021, most foreseeing declines around 3-5%.

So what will grocery retail trends include in 2021?

  • as consumer again look for convenience and meals-on-the-go, store-made prepared meals and prepacked meal kits will continue to be important drivers of sales
  • promotional pricing –consumers who were less price sensitive in 2020 (buying whatever was available) will be expecting it this year
  • an emphasis on private labels and store brands – part of the emphasis on value pricing
  • increased automation as curb-side pickup operations become more established
  • ongoing improvements in online ordering to boost impulse purchases and encourage consumers to add items related to those already in their cart
  • an emphasis on wellbeing as stores offer health information and meal planning
  • return to sustainability measures, including reusable grocery bags and reduced use of single-use plastics in areas such as produce bags, and produce and carryout packaging

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Frozen Food Packaging, Pouches,Global Foodservice,Foodservice Single-Use Products,Global Foodservice Single-Use Products, Retail Bags, Commercial Refrigeration Equipment, and Global E-Commerce Packaging. Related reports from our sister publisher, Packaged Facts, include Food Carryout & Delivery, Food Carryout & Delivery: Special COVID-19 Consumer Insights, Consumer & Corporate Food Gifting in the US, US Food Market Outlook 2020: Home Cooking, Grocery Shopping & Food Trends in the Age of Coronavirus, Global Food E-Commerce, and Online Grocery in the US. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Food & Beverage    

COVID-19 Pandemic Boosts Sales, Popularity of Dungeons & Dragons and Magic: The Gathering

One challenge faced by nearly every household in the US has been that of entertainment: with many activities off-limits due to pandemic-related safety concerns (baseball games, concerts, large-scale family gatherings) or restricted (new movies and television shows), people have had to finds new ways of ending the tedium of staying at home.

A solution to this problem for some has been a surprising one: an increase in the sales of both Dungeons & Dragons rulebooks and accessories and of sets of Magic: The Gathering cards. These games – popular in the 80s and 90s – might seem to be odd choices for a sales resurgence, given the traditional notion of these games being played by small groups of people sitting around a table… the perfect setting for spreading the coronavirus.

However, a number of factors have spurred interest in D&D and Magic: The Gathering:

  • Players quickly discovered that games could be played “together” on Zoom, permitting virtual dungeon crawls from the safety of one’s home (without needing to obtain a periapt of health)
  • The popularity of podcasts and other social media posts featuring gamers, including noted celebrities – showing others that it was possible to play them remotely
  • The publishing of Magic cards with characters and themes from other TV shows and other pop culture phenomenon
  • The announcement by Wizards of the Coast (the publisher of Dungeons & Dragons) that it would offer free materials for download – allowing new players entrance to the world of RPGs

Thus, for many Americans, regular gaming has been a saving throw against boredom, while also offering new entertainments to people who would never have considered the hobby.

For more information, see Freedonia Focus’s Toys & Games: United States report.

  Consumer Goods      Covid-19