One of the key drivers of FMCG category consumption and kitchen appliance purchases is the extent to which people will continue working from home in the future. It is looking increasingly likely that many office workers will continue to work from home, at least on a part-time basis, with a number of media reports suggesting that up to 95 per cent of consumers do not want to return to commuting five days a week and want to work a maximum of three days a week in the office. The shift t
t to working from home during and following the initial pandemic lockdowns in early 2020 has led to an increase in the number of meals being cooked and consumed at home, with more time available for planning and execution. This has impacted what is being bought and prepared, and how it is being prepared, with many new kitchen appliances being purchased and kitchen renovations being performed as part of a broader nesting trend. It has also impacted consumers’ choice of retail channels, particularly for beverages and snacks. Illuminera Australia ran two studies late in 2020 (Project Hearth and Project Chef), looking at the impacts of the pandemic and working from home on at-home consumption occasions, cooking and baking, supermarket shopping behaviour, kitchen appliance purchases and kitchen renovations, including what behaviours are likely to stick through 2021. Here are some of the key findings of those studies and several implications for retail this year. A need for the spice of life The majority of consumers revealed they were enjoying cooking and baking more, and believed their skills had improved. A number had tried meal delivery kits early on but reverted to cooking from scratch as their confidence improved and it was cheaper. Consumers also said one of the major changes they were enjoying was having more time to plan and prepare meals (due to less time spent commuting), including both preparing and eating meals together as a family. This had had several impacts on cooking behaviours. One is the rise of the ‘snacking whilst cooking dinner’ occasion, typically on cheese and crackers (accompanied by a wine or G&T). Cheese has been a beneficiary of the pandemic, with cheese appearing in our consumers’ consumption diaries as the number two snack behind fruit. This can be seen in the 3600 per cent sales increase that cheese subscription retailer Cheese Therapy enjoyed in the run-up to Father’s Day 2020. Another is increased experimentation and more elaborate and complex meals including at breakfast and lunch, driven by an increase in skills and a need to expand cooking repertoires and cuisines beyond spaghetti bolognese (the most frequently prepared meal in many households) and the typical 10–15 dinner recipes prepared on rotation. Retailers and brands can assist shoppers who are “roaming the supermarkets, desperate for variety and inspiration” by promoting co-located product categories bundled into interesting — not just basic — meal solutions as a starting point. Promotion of international meals, whether ready-to-eat for less involved cooks, or requiring preparation for more confident and involved cooks, can also assist. The consumption diaries of many consumers we studied pointed to an uptick in Mexican meals particularly. Another major impact of working from home has been on snacking. Earlier in the pandemic, the consumers in the Project Hearth study were snacking, not only more frequently, but more indulgently; out of boredom and needing a break but also as a treat and reward for not being able to go anywhere. However from mid- to late-2020, in a bid to lose the resulting ‘Covid kilos’ and because many now realise working from home in some fashion is likely to become an ongoing proposition for the foreseeable future, consumers are pragmatically seeking out healthier snacking options rather than attempting to reduce snacking frequency. Some are starting to bake their own snacks such as banana bread, or make their own hummus. Retailers can provide both make-your-own snack ideas and promote ‘better for you’ snacking options, and manufacturers can accelerate and leverage production of superfood ingredient-rich products. Beverages have also seen a marked change, with 33 per cent of consumers reporting increased coffee consumption at home, supported by appliance manufacturers’ skyrocketing sales of at-home coffee machines. In focus groups, consumers told us that during ‘cocooning’ at home they realised how much they’d been spending on coffees out, and that an at-home coffee machine would save them money ‘in the long run.’ Likewise higher at-home tea consumption was reported by 25 per cent of our consumers. At the other end of the spectrum, energy drinks, soft drinks, flavoured milk and sports drinks were all claimed to be consumed less than pre-COVID, and none of our week-long household food and beverage diaries mentioned energy or sports drinks at all. These beverage categories, often purchased in convenience channels, appear to have been negatively affected by lockdowns and forced working from home. However as commuter traffic increases, even if only on a part-time commute basis, we would expect them to bounce back somewhat. Fewer but bigger shopping trips Project Hearth data identified that shoppers were shopping less often at the start of the pandemic to reduce social contact in-store. Supermarket trips typically dropped to a once-a-week stock-up shop, as shoppers stocked their pantries in order to cook with more leftovers in mind. Customers made more bulk buys via larger pack sizes, more items in the pack, and more multiple-item purchases, leading the average weight of purchase per trip to increase. This behaviour is likely to stick, with consumers indicating that having more time to plan, prepare and cook meals, often due to bulk cooking, is more efficient and enjoyable, which is a change they want to retain. Between the earlier bushfires and the pandemic we have observed across all of our studies in the past 12 months a consumer desire to support local businesses, with consumers saying they are shopping at local stores 30 per cent more often. This includes independent takeaways and restaurants as well as supermarkets. Shopping is becoming hyperlocal, and shoppers are not only looking for familiar and well-known brands but also local brands to support, even if this is a little more expensive. Stores in neighbourhood areas have an opportunity to range and promote local products, in the way White’s IGA in Queensland has its ‘Locavore’ program.(IGA more broadly had a bumper year in 2020, likely not just because the pandemic tide lifted all supermarket boats, but because of its ‘local’ positioning). It also means that local retailers ranging local brands don’t have to be the cheapest, or need to heavily discount local items and familiar brands. More cooking means more kitchen appliances and renovations Being at home more often, combined with the inability to spend money on travel and leisure, has resulted in record consumer savings levels and consumers looking to spend up on the home — on furniture, appliances and kitchen renovations. Last year was a boon for appliance retailers such as Harvey Norman and JB Hi-Fi. More cooking, more often means that kitchen appliances are wearing out; they’re either insufficient in size or performance or different appliances altogether are needed due to greater experimentation. Some of the more involved cooks are ‘treating’ themselves to new appliances. More time in the kitchen has led many consumers to realise their kitchens aren’t as functional as they’d like, and due to the inability to travel, many have money to burn on kitchen renovations. A third of our consumers were considering premium appliance brands as part of their renovation, representing a relatively easy upsell opportunity for retailers. Another is the inclusion of small or benchtop kitchen appliances in kitchen renovation packages, as small appliances were purchased by more than half of consumers conducting a kitchen renovation. Kitchen renovations were planned ‘in the near future’ by four in ten of our gourmet and competent cook sample. Nearly four in ten of our total consumers plan to continue their cooking experimentation and skill improvement into the future, meaning the need for both meal inspiration and variety, and more kitchen appliances to assist, is likely to remain for some time. There have been a number of benefits of the pandemic that consumers would like to retain in the future, the primary one being time. Less rush, more time available (due to less commute time) to spend with family and on cooking. The kitchen, rather than the lounge room, has become, and looks set to remain for a while yet, the ‘hearth’ of the home.