Grocery shopping habits are changing in the United States, and so is demand for smaller, cheaper products and packaging, according to a recent NielsenIQ report. Overall, pack architecture hasn’t kept up with the changes, the authors say, and brands should act now to maintain market relevance.
Emerging trends and consumption shifts show there’s no longer an “average” family that companies should target. Brands and packaging companies need to evolve alongside consumers, according to NielsenIQ.
While the total population of the United States has grown by 58.7 million since 2000, the average household size has dipped during that time from 2.6 people to 2.5 people. And smaller households consume differently than larger families, the report says. In addition, consumers are becoming more price-sensitive for everyday purchases as economic conditions force them to spend more on essentials.
“This makes smaller pack sizes important because they can reduce the price per trip, even when larger packs still offer a better per serving price,” according to the report.
Weight loss and smaller grocery trips are shrinking packages
Consumers who use GLP-1 medications for weight loss are having a hefty effect on grocery sales and pack sizes, the report says, pointing to users’ shrinking portion sizes and reduced food purchases.
As of May, 21% of U.S. households had at least one GLP-1 user, and that figure is rising, according to the authors. As consumers change what and how much they consume, food brands can adapt by introducing smaller packs such as mini beverage cans, trial sizes and portioned servings, according to NielsenIQ.
Packaging converters have reported identifying these types of business opportunities in the last couple years as they work with brands to redesign existing product packaging to be smaller or to sport messaging about the product fitting into healthier lifestyles.
Consumers are favoring quick, targeted grocery trips to pick up a limited number of items. The growth of online shopping is also influencing the declining prevalence of big stock-up trips: An estimated 32% of in-person grocery purchases are now considered to be stock-up trips, which is lower than years past, the report says. Only 19% of online grocery purchases are considered stock-up trips.
Generational splits complicate the matter, underscoring that “pack architecture needs to work across different shopping environments,” the report says.
Packaging needs to be easily recognizable on store shelves and convenient to carry home for Baby Boomers, who still shop in-store nearly 70% of the time. But packaging also needs to work well in digital environments, where shopping decisions often occur based on images, price points and delivery options, the report says. Millennials and Gen Z only grocery shop in person 36% and 39% of the time, respectively.
The consumer changes in consumption highlight “the potential for changing packaging trends” and the need for brands and packaging companies to keep up, the report says.
Redefining value
The way consumers perceive value is changing, which is affecting purchasing patterns, according to the report.
Historically, consumers have considered per-unit costs for larger packs. Now, they’re simultaneously judging the convenience factor and product usefulness. “This challenges the idea that value should be communicated only through larger pack sizes or the lowest unit price.”
Authors identified three categories that are seeing more sales growth for smaller pack sizes than for traditional multiserve packs: soft drinks, ready-to-eat cereal and salty snacks. This trend is “building in many established categories right now” and is evident in grocery sales, according to the report.
Consumers are also taking into account waste reduction, both for products and packaging. A NielsenIQ survey from January found that 28% of shoppers actively think about waste reduction when making grocery purchases. Their strategies include choosing products with sustainable packaging and only buying quantities that they can fully use before a product spoils.
Packs should be manufactured so they’re smaller and easier to carry to support this finding, the authors say.
“Redefining value and how your brands fit is pivotal to succeeding with consumers who are interacting with the market differently than anything we’ve seen historically,” the report says. “How your pack architecture, promotion structures, and value propositions speak to these consumers is something to think about right now.”
