CPG Marketing: Responding to Eroding Consumer Brand Preference

New research from Reach 3 Insights reveals the significant impact inflation is having on consumer purchases, and it spells a CPG marketing challenge for national brands to defend market share. About 78% of Americans purchase store brand products now, with 61% buying more pantry items and 58% buying more private-label household products. And 65% of the people say that — minus the packaging and branding—they consider the products to be the same.

In a recent consumer survey by Prosper Insights & Analytics, “no brand preference” was the leading choice over name brands in 18 of 22 CPG product categories, including bathroom cleaner, dishwasher detergent, laundry stain remover, bath soap, and more. Private label products continue to steal share, as well, creating an increasingly competitive marketplace for national brands to maintain and increase share.

Which of the following bathroom cleaners do you purchase most often?

SOURCE: Prosper 2023 / 6,466 consumers polled

Which of the following Laundry Stain Removers do you purchase most often?

Source: Prosper 2023/4,846 consumers polled

Economic Pressure is Shifting Consumer Behavior

Consumers are facing pressure from multiple points, and the current economy is shifting their behavior. While the rate of inflation for gasoline decreased in December 2022, it continues to rise in key spending categories including household energy, restaurants, and groceries.

  • Consumer discretionary spending is down as ritual household expenditures face strong upward pressure.
  • Customers are trading brand preference and loyalty for greatest perceived value.

Brands that understand the new consumer value equation can create preference and steal share.

Monthly Rate of Inflation in Key Consumer Household Categories Impacts Discretionary Income

Source: Bureau of Labor Statistics, December 2022 CPI Report

Understanding this invisible “competitor” to your CPG brand presents a tremendous opportunity to protect your market share and drive new, loyal customer growth.

The Impact of Inflation on Discretionary Income for Rural Consumers

While the impact inflation is having on urban consumers is well known, the impact inflation has had on rural consumers is not as widely known. In an analysis of CPI data by Iowa State, from June 2020 to June 2022 rural consumers saw a 49.1% reduction in their discretionary income compared to only 13.1% for urban consumers.  During this period earnings only rose 6.1% against inflation of 9.1%.

Value is even more important NOW to the consumers in the rural markets Mspark serves.

Inflation & Rising Prices Impact on Rural Consumers

Source: Iowa State University CPI analysis

Reaching Rural Consumers Presents Additional Challenges for CPG Marketers

As newspaper FSI coverage continues to shrink and broadband access is often lacking for consumers in rural communities and small towns, fewer media options are available for CPG marketing to reach these consumers. If you overlook these lucrative markets, you risk missing out on an audience that represents $2.8 trillion in spending nationwide.

  • In rural markets, 28% of consumers still lack broadband internet access, which means a digital-only strategy risks missing consumers in these key markets.
  • The result of this lost newspaper FSI coverage for many CPG brands is they often can reach as little as 25% of their stores in rural markets. Mspark offers coverage where the FSI is no longer an option. Learn more about strategies for replacing lost newspaper coverage here.

Below is a snapshot of retailers included in Mspark’s coverage area:

Consumers in Mspark’s Coverage Area Shop at Walmart

Mspark’s reach among Walmart shoppers is unmatched. Almost 67% of shoppers in our coverage area have purchased from Walmart in the last 3 months—and they are 26% more likely than the average consumer to shop there. More importantly, Walmart shoppers respond to ads and coupons in the mailbox 13% more often than they respond to newspaper ads.

Learn more about how Mspark connects CPG brands with rural and small town consumers in our case studies. Reach out today to plan your CPG marketing strategy.

Sources: Reach 3 Insights; Prosper Insights & Analytics Monthly Consumer Survey; Bureau of Labor Statistics, November 2022 CPI Report; Iowa State University CPI analysis; AdMall AudienceSCAN 2022