Nielsen reveals Consumer Goods Categories among those most immune/most vulnerable to Recession.

As the economic downturn causes consumers to reprioritize their spending habits and forces consumer packaged goods (CPG) manufacturers and retailers to reevaluate their consumer marketing strategies, The Nielsen Company today revealed CPG categories among those most immune and most vulnerable to a recession. The analysis was presented today at Nielsen’s Consumer 360 Conference, the CPG industry’s premier educational and networking event, attended by more than 1,000 industry professionals.

According to Nielsen’s analysis of macroeconomic variables, historical trends and consumer behavior, products such as seafood, dry pasta and candy are most immune1 to a recession. Beer and pasta sauces also show some level of immunity to recessionary times. Those products among the most vulnerable or recession-prone include carbonated beverages, eggs, cups/plates, food prep/storage items and tobacco.

“Consumers are feeling the squeeze as they are caught between rising costs and lower spending power,” said Eugene Roytburg, managing director, The Nielsen Company. “As a result, many consumers are reprioritizing or altogether changing their spending habits. For CPG manufacturers and retailers, this requires a change in the way you market to consumers, and knowing which of your products are most affected by a recession will help you maintain focus on the right categories and brands in order to succeed.”

A New Tool for Recessionary Times

Nielsen developed its new Predictive Macroeconomic Impact System (PMIS) to assist CPG manufacturers and retailers in understanding how certain categories perform during recessionary times. PMIS analyzes the macroeconomic variables that tend to change during recessionary times, including the U.S. median housing price, S&P Commodity Trends Indicator, Consumer Confidence Index, Consumer Price Index and stock performance. Nielsen then identifies those variables having the greatest impact on consumer attitudes and behaviors – unemployment, inflation, consumer confidence, gas prices, housing prices and disposable personal income – defining the extent to which these factors influence consumer motivation and decision-making.

“Our analysis of changing consumer and category trends allows for an accurate prediction of the recessionary impact on a particular business,” said Roytburg. “In other words, what macroeconomic variables are driving consumer behavior – and how? What’s happening, what does it mean and what should I do about it? By analyzing product trends through continuous macroeconomic lifecycles, we are able to determine how individual categories respond to a recession by determining their vulnerability and their ability to recover.”

Recessionary Opportunities

Knowing how categories are impacted in a recession enables identification of risks and opportunities – – information that is then used to guide strategic decision-making with regard to appropriate business actions, such as pricing and promotion and assortment.

“For products that are performing strong and showing immunity during a recession, manufacturers and retailers in these industries have the opportunity to increase product exposure even further,” said Roytburg. “For products at the other end of the spectrum, companies would be well-advised to target their marketing efforts to shore up performance and maintain traction during tough times.”

1 Nielsen compared actual category behavior during prior recessions with expected behavior. Other factors which drive category performance are considered in custom analytics projects and deliverables.

For more information at http://www.nielsen.com