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The future of FMCG: rebound, reboot & reinvent

May 7, 2020
By Alana House

Nielsen has identified three distinct time horizons for global market regeneration post-COVID-19. The framework identifies the conditions for businesses to rebound, reboot or reinvent as they confront unprecedented recessionary conditions.

Nielsen’s global intelligence team has explored global macro conditions such as unemployment, bailout packages, and interest rates and tied them to ongoing FMCG sales and attitudinal inputs from consumers around the world to explore potential outcomes.

“Much has been made of comparisons to the 2008 global financial crisis, but this situation doesn’t make for accurate comparisons,” said Scott McKenzie, Nielsen Global Intelligence Leader.

“The circumstances back then were fundamentally different. Thousands weren’t dying each day, millions weren’t locked in their homes indefinitely, businesses weren’t ordered to close their doors, kids were still in school. The impact of this will be profound and more far reaching than anything we’ve seen in our lifetimes. The pace of change is also extraordinary.”

The three time horizons are:

  • Rebound: An early return to normal living conditions (schools, workplaces, stores, restaurants etc re-open) at some point in the third quarter of 2020.
  • Reboot: A medium-term scenario that is positioned in the fourth quarter of the year.
  • Reinvent: A longer-term view that places the world in a general return to normal living conditions at some point in the first half of 2021.

“The world is fundamentally recalibrating right now” said McKenzie. “Consumer habits are changing at pace and understanding those changes, in the context of these scenarios, will be critical as businesses prioritise how they too recalibrate to meet the changed circumstances driven by COVID-19.” 

During the “Rebound” phase, a series of health indicators, actions by governments and business, and market conditions point to a rebased “normal” that has some of the following as a societal response:

Nielsen Rebound

During the “Reboot” phase, the societal response has a different set of focal points and positions the economy for meaningful regeneration toward the end of the year.

Nielsen Reboot

“Reinvent,” as the name suggests, a complete reinvention is required and may not play out until the first half of 2021. The consumer behaviors and characteristics are sharply amplified compared to horizons No. 2 and No. 3:

The baskets of shoppers will also change during these horizons. The repertoire, pack sizes, brand choices, product origins and more will be reconfigured as shoppers adjust to changed economic circumstances and have a sharper focus on their health and safety.

Two clear sets of consumers will also emerge – those with insulated levels of spending, often those who have maintained employment and remain shielded from day-to-day economic impact and those who will be restrained in their spending habits due to unemployment, furloughing or other COVID-19-related challenges.

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Nielsen is a Corporate Partner of the Drinks Association. Click here to visit its COVID-19 microsite.