2008 CPG Year in Review

JANUARY 2009
EXECUTIVE OVERVIEW

IRI's Times & Trends highlights new developments and critical events across all major CPG categories and channels, providing powerful benchmarking data to help guide your strategic decisions. This edition of Times & Trends explores industry performance over the past year, and provides insights on what to expect as 2009 unfolds.

Introduction

The year 2008 may be gone, but it is definitely not forgotten. It will go down in history as the year the United States entered the most significant economic recession since World War II. This recession will last well into 2009, and possibly beyond.

Every American has felt the impact of the country’s economic battle. Across age, income, and ethnicity breaks, consumers have been forced to make substantial changes to their everyday lives- and shopping habits- to stay afloat in a recessionary economy. Changes have been broad and deep…and rapid.

The CPG industry must stay on their collective toes and respond to continually changing rituals with a new level of deftness, for difficult times will enable relationships that will outlast the recessionary environment.

Frequent and thorough monitoring of changing consumer attitudes and behaviors is more necessary now than ever before. And the ability to anticipate change before it happens will define the big winners in the long term.

This 2008 Year-in-Review report explores industry performance over the past year, and provides insights on what to expect as 2009 unfolds.

Select Findings

• Forty six of the top 100 CPG categories experienced above-average price increases in 2008. On average, CPG prices climbed 4.9% in 2008. However, price shifts vary markedly across departments, categories and geographic regions. CPG prices are expected to remain elevated well into 2009, and unprocessed foods will likely be the first to see prices fall.

• A back-to-basics mantra drove CPG purchase activity in 2008. Meal ingredient and component categories demonstrated healthy sales growth, driven by a resurgence of at-home from-scratch cooking. Wine and beer categories also experienced growth as consumers brought a bit of the dine-out experience to the kitchen table. These trends will carry over well into 2009, while the economy struggles to find stable footing and consumers seek shelter from the financial storm.

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See the pdf "T&T January 2009 CPG year in Review"