The U.S. market for consumer packaged goods or CPG—food, beverages and other consumer goods typically sold in grocery stores—has been expanding slowly. But, online sales growth of purchases of such items continues to outpace overall sales and e-commerce for the segment is gaining market share, according to measurement and data analytics firm Nielsen Holdings plc and e-commerce market research firm Rakuten Intelligence, which recently formed a research partnership.
Nielsen and Rakuten found that the market for these products in the U.S. (including online and offline sales) was $1.01 trillion for the 52 weeks ended Aug. 25, up 2.6% from the comparable period a year earlier. E-commerce CPG sales by contrast grew 29% for the period. While the pace of e-commerce CPG sales growth handily beat that of the overall market, it was slower than the 36% pace of e-commerce CPG sales growth in 2017.
The data was collected as the result of the new partnership—announced earlier this month—between Nielsen and Rakuten. The partnership combines Nielsen’s online purchase data and product reference data with Rakuten’s e-commerce panel of 5.5 million consumers, which Rakuten says is the largest such panel in the world. Nielsen says it captures 90% of U.S. CPG online sales and it tracks 450 million products on 8,000 websites in more than 40 countries every day.
Nielsen and Rakuten say online CPG sales in 2018 represented 40% of the year-over-year sales growth in U.S. CPG sales, despite representing less than 5% of the overall market. “That’s where the real dollars are coming from,” says Justin Belgiano, vice president of e-commerce at Nielsen.
Pet supplies was the fastest-growing CPG category online over the three years ended Aug. 25, with a compound annual growth rate (CAGR) of 59.9%. Overall, the U.S. pet supplies category has a three-year CAGR of just 4.3% while sales of pet supplies made in stores were basically flat, with a three-year CAGR of 0.1%, representing a big shift to online sales in that category.
Belgiano says a family’s need for pet supplies is relatively predictable, which lends itself to e-commerce subscriptions. Also, he says shopping at stores can mean lugging home bulky bags of pet food, which could be delivered to the family’s home, if ordered online.
The research also found that in-store pickup of online orders now represents nearly half (48%) of all online grocery purchases. The rest were delivered. The represents a massive shift from 2016, when in-store pickup represented only 18% of online grocery sales. Belgiano says the majority of online grocery orders that were delivered were delivered by third-party drivers and delivery services.
At the per-consumer level, Nielsen and Rakuten found that spending per buyer in the CPG market was basically flat overall, up 0.1% year over year for the 52 weeks ended Aug. 25. But e-commerce spending per buyer grew 16.6% during the period.
Breaking down grocery items for the year ended ended Aug. 25, Nielsen and Rakuten found that Americans spent $224 million on online cereal purchases during the year, up 41.7% year over year, making cereal the largest growing online grocery item. That was followed by a 25.8% increase in online tea sales and a 22.5% increase in online sales of nutrition drinks.Favorite