Pandemic and cultural shift combine for rapid change smackdown

We unpack handwriting on the (relevant marketing) wall

If you’re like me, you’re probably exclaiming, “so now what?” Another day and another revelation of upheaval in an era of unpredictable, unsettling events that cause you to sleep with one eye open.

In an exceptional moment of corporate disclosure, Amazon announced that nearly 20,000 of their employees tested positive for Coronavirus just hours before the President and First Lady were diagnosed with the virus. No doubt the pandemic has reached into the lives of virtually everyone with unprecedented and transformational impacts that continue to reshape the way people think, shop and live.

Within the last few days major furloughs and layoffs have been announced simultaneously by a string of companies including Disney, Allstate, major airlines and others as business shortfalls consume cash reserves leading to headcount reductions.

• Emergent has followed these developments closely. We are examining these events to translate them for useful guidance on what food, beverage and lifestyle brands should consider in business planning and how these issues impact marketing strategy.

Here we will unpack the most significant conditions. Focusing on what informs the immediate future for companies grappling with uncertainty via new revelations surrounding the economy, the disease, climate challenges and cultural disruption – all of which are inter-related.

The end of stimulus and the start of fiscal free-fall

In June media attention shifted to the looming end of Federal stimulus programs. Millions of people who were fortunate enough to qualify for meager state unemployment benefits, saw a life-preserving $600 a week added to their stipend payments. This action temporarily closed the financial gap for families who otherwise would be facing a cliff of cash shortages. That cliff has now arrived, impacting their ability to pay the bills, especially housing and food.

It is unclear if new stimulus support will return anytime soon due to the impasse between Congress and the Senate over the size and components of a national economic support package. Even with House passage of a $2.2 trillion measure, it’s unlikely it will go any further before the election, as both sides draw hard lines in the budget sand.

Thus, the income disparity between wealthier and middle-class families is widening and becoming more obvious (visible to all). Those less impacted by the recession continue to accumulate cash due to slowdowns in spending for commuting, business or vacation travel and discretionary activity in restaurant dining, sports and entertainment. Those directly affected by the economy slowdown experience layoffs, salary or hour reductions and wholesale permanent disintermediation of their jobs, while trying to manage life with quickly dwindling cash reserves.

Middle class spending is an engine that drives the U.S. economy so what’s happening here over time has domino impacts everywhere. It is in everyone’s best interests if stimulus support is turned on, and concerted efforts made to restore jobs or create new ones.

The number one impact of all of the above: stress and anxiety

Whether it’s class polarization, economic and employment uncertainty, concerns over social justice and all-too-apparent climate eruptions, plus a surging virus – all combine with the absence of control over one’s life and surroundings to manifest in a form of anxiousness. It is showing up everywhere in what people eat.

Legacy packaged food brand resurgence is evidence of filling a need for:

• Comfort
• Familiarity
• Satisfying stress eating behaviors by reaching for higher fat and carb foods that somehow make people feel better. Apparently, a bag of chips is self-medicating. However, 27% of American adults are also reporting 5 or more pounds of weight gain since March – a troubling development especially as a good portion of the country experiences declining seasonal temperatures and more inactive time spent indoors.

As a sort of ‘flip side’ of this culinary coin, stress eating behaviors leading to high fat and carb foods, has its own polar opposite: the growing search for low sugar foods in an effort to exert more control over health and wellness at a time when investments in immune system integrity are a top priority for many people.

On the retail side, we’re witnessing a related swell in transactions and channel migration to hard discount. Not a surprise under these conditions. Again, we see the presence of an alter ego for stores in higher income zip codes. These retailers may see increasing opportunities for trial and volume growth of premium indulgent food and beverages. It’s just ‘nuts’ if you get my meaning.

Work-From-Home (WFM) not going anywhere

As we pour through reports on the status of WFM, we conclude this phenomenon isn’t likely to go away anytime soon. Now breakfast and lunch are prepared and consumed at home, adding to the need for guidance, kitchen counter coaching and convenient solutions. In many places the kids remain home for school as well, adding to the pressures in meal preparation. Can you help with emotional support, menu guidance and prep ideas?

Meal kits took a beating pre-COVID due mainly to cost and complexity. Now kits are returning as a viable way to vary menus and fulfill consumer interest in sophisticated (global) flavors and restless palate syndrome borne of at-home cooking boredom. Grocery retailers have an opportunity here to showcase kits in varying degrees of ‘do-it-for-you’ to meet the interests of the scratch cookers and those who are simply exhausted with all the constant chopping and slicing.

The Wheatley kitchen is a veritable round robin of cutting boards, knives, saute’ pans, bowls and leftover containers as two teenage daughters exert control over their food preferences, while the parents handle another portion of the chores. It’s an unending cycle of cooking and cleaning. I’ve not seen teenagers with such accomplished knife skills and baking expertise except on Chopped Kids.  

• Snacking is now a 24/7 activity. The room for brands to play here is nearly infinite. The refueling is almost non-stop, some of it functional and some indulgent.

The opportunities for brands and retailers to become a partner with people in the kitchen has never been higher, yet so few are stepping-up to the plate. Perplexing.

E-commerce crazy

Time is all we have. How we spend it is all that matters. Why will e-commerce become such a dominant channel? Because it is built to give back time. The pandemic closes the door on casual browsing and spending extra quality time in brick and mortar retail. Shopping trips are fewer and purposeful, aimed at minimizing viral exposure.

Meantime the seamless digital shopping platforms people encounter are getting better and better. We’re now at a $70 billion run rate in e-commerce transactions. Experts in the field believe once you pass 50% of typical transactions in food or lifestyle, the tipping point may very well have been reached. Not there yet, but the leaps in digital purchasing this year are significant.

At this stage, as good online experiences and comfort level take over, people begin to appreciate the time they’ve been given back by avoiding the hassle of driving to and running the cart through stores.

That doesn’t mean retail disappears, far from it! It does mean that shopping experience and environment must be on a whole other level to romance and engage people in a sought-after and magnetic reason to be inside your doors. Disney does magic well, so should you.

Shopping for what?

According to IRI data through mid-August, the top five categories in retail sales volume are:

1. Health care products
2. Frozen meat/poultry/seafood
3. Personal cleansing
4. Other refrigerated
5. Baking

Within the top 25 categories in sales growth, frozen and refrigerated holds 14 of them. Evidence that consumers care about preserving shelf life and guarding against food waste and scarcity, while the baking binge is no fluke. It is an effort to bring control back during an era when there is a predominant feeling of none.

Strategic direction: identify passionate cohorts, apply hyper relevance

If you can step back and see your marketing and communications strategies remains widely targeted at virtually every human on earth, now is the time to prune. The need for mattering has never been greater. Achieving that enviable position isn’t easy and requires significant focus and discipline.

Step One –

Identify the most committed and passionate consumers of your product or shopper groups in your stores. What do they care about, how do they live, what are the pain points they need to solve? Your goal is to become a refined and optimal solution to their problem. To get there you need to lean hard on the strategic thinkers and those with insight to consumer behaviors on your team. This is true customer-centric planning.

Step Two –

The goal of your marketing is hyper relevance to these consumers, to the point where they see a mirror of themselves in how the brand communicates and behaves. Your values and theirs become one. You step fully into higher purpose and deeper meaning with this cohort (there may be cohorts). Whatever end of the economic spectrum, you lean in to where they live and how they feel. You’re looking for common ground and ways to be of help. Your value proposition isn’t just the product or store. It’s how you tangibly work to improve their lives.

Step Three –

Your communications and content creation should be packed with advice, guidance and counsel. You walk away from the temptation to self-promote and instead focus on them and their stories. You enable social proof mechanisms and encourage people to share experiences because you know it’s credible proof of what you want them to believe. Your storytelling expands to address the higher purpose you’ve adopted and how you are helping improve the world around us. You now know it matters to consumers who expect this of you.

We understand that people are now literally consuming their identity. What they buy is a flag and mirror of their values, beliefs and what they hold to be important. Symbolism can be everywhere in every place that consumers encounter your brand and business. Are you deploying the markers and images they will recognize of lifestyle relevance?

The horizon: climate change

Looking ahead, what’s coming is a move to connect food and beverage choices with carbon footprint and impacts on climate change through contributing to the growth of greenhouse gases. There is genuine fear among people that food production is irrevocably linked to creating damage to the climate, leading to super storms, droughts and wildfires.

This issue is going to climb in visibility and importance. Brands have an opportunity to get in front of this concern and be part of the dialogue. The roots of this will inevitably go back to supply chain decisions and how foods are farmed or raised. To that end regenerative agriculture is going to rise as a priority and people will be looking for these practices to show up in an industrialized agribusiness that isn’t operating with these principles in mind.

The great promise of this type of farming is reversal of eroding soil conditions and processes that could help farmland become the world’s largest carbon sink. This is a horizon issue now but is rapidly building momentum.

Worth paying attention to.

As you consider the path forward, if expert guidance would be beneficial in your planning use this link to open a conversation. We would be delighted to help. Emergent’s mission is to marry marketing expertise with our belief in the rising importance and value of healthy lifestyle to the future success of relevant food and beverage brands and retailers.

Looking for more food for thought? Subscribe to the Emerging Trends Report.