Overcoming Lockhome Syndrome

1. Overcoming
Lockhome
Syndrome
Four Post-Pandemic
Trends in FMCG

2. FMCG Trends 2
Dan Calladine
Head of Media Futures,
Carat
The FMCG category was already a very
changed and challenging sector before
COVID-19 hit, but the pandemic has
accelerated these changes and challenges.
The rise of the digital economy, more
diversity of choice, the shifting media
landscape and eroding effectiveness of
traditional communication models are all
having an impact on the industry.
This report looks at four trends impacting
FMCG and sets out implications for the future.
1. Data Essentials
2. Lockhome Syndrome
3. Protecting the Planet
4. Be Your Best Self

3. 1. Data Essentials
FMCG Trends 3
The world went even more digital in 2020, with
more people watching, playing, and buying
online than ever. According to the Office for
National Statistics, the percentage of consumers
buying food online in the UK increased from 5% in
January 2020 to 12% in January 2021.1 Some star
performers like Ocado saw their revenues rise by
33% during the year. 2
We have seen the rise of new technologies that
allow people to buy online more easily. For
example, ecommerce start-up Adimo integrates
into ads and allows people to add items to their
baskets. Voice assistant expert Say It Now has a
technology that does a similar job with audio
ads if heard on a smart speaker.
However, 'digital' is also becoming harder,
as both governments and tech giants act to
increase consumer privacy and reduce the
amount people are tracked when they are online.
Legislation like GDPR is still evolving, with the UK
government potentially challenging the mechanics
of behavioural targeting.
Meanwhile, both Apple and Google are taking
proactive steps to block the cookies that have
been fundamental to targeting and measuring
online advertising for the past 25 years.
This development is putting much greater
importance on the first-party data that brands
can collect – typically data that is generated
when a customer visits a brand's website.
This is one of the reasons that brands like
PepsiCo are creating their own shopping sites
like www.snacks.com. They can be in control of
their relationship with the customer and the data
that will help them understand shoppers better.
1 Office for National Statistics: Retail Sales, Great Britain. Online sales as a
proportion of retailing in January 2020 and January 2021.
2 Ocado Group Plc: Financial year 2020 Results, published 9th February 2021.

4. FMCG Trends 4
We are also seeing brands create new tools
and services on their sites and apps to
encourage people to visit and submit data.
Nestlé's Toll House Cookie Coach lets bakers ask
questions to an AI bot, collecting data all the
time. Snacks brand Lays is allowing people to
create a virtual message from Lionel Messi to
send to a friend, again giving them a legitimate
reason to collect valuable data.
Finally, we have started to see NPD
(New Product Development) based on the
data that brands are able to measure or
receive from partners. Kellogg's created a
limited edition of Special K, with a different box
for each day of the week, because they knew
that people were finding it hard to tell one day
from another under lockdown. They took data
from Twitter to see what sorts of flavours were
discussed on different days of the week and
used this to determine what each day's box
should taste like.
Implications for FMCG brands
• Brands need to collect their own 1st
party data that they can use for targeting
legally and ethically. Be transparent
about the data you collect and offer a
clear value exchange; personal data in
exchange for benefits.
• Encourage visits to owned properties
both in paid and organic activity in social
media, and by putting calls to action into
brand advertising, so that 1st party data
can be collected. Create sites to host
innovative content like tools, games,
and competitions to drive data collection.
• Develop partnerships with companies
like retailers that own complementary
data so that the sources can be fused
for mutual benefit.
• Experiment with new contextual
technologies, like content recognition,
to ensure that campaigns appear within
relevant environments. Companies
like Beemray, TopicDNA and Peer39
are making cookieless targeting
more effective.
• Partnerships and product placement
will ensure positioning in the right
environments whenever the audience is
watching. Branded content will also be
increasingly important. Create content
that will engage people.

5. 2. Lockhome Syndrome
5
The pandemic forced people to stay at home,
eating at home more than ever. According to the
Food and Drink Federation (FDF), the number of
meals people eat outside the home dropped to
between 5% and 10% in the UK during lockdowns,
meaning that people are buying packaged goods
more than ever before.3
As lockdowns are eased, there are indications
some of these habits will remain. Dentsu’s
proprietary research about European cooking
habits in 2021 suggests that 30% of people in the UK
say they are passionate about cooking and plan to
continue to cook more at home. In Denmark, the
figure climbs to 46%.4
Equally, research from Nestlé says once we start to
return to work, 48% are likely to have their first cup
of coffee at home before their commute,
according to food publication Food Dive. The
research, conducted in the US in March 2021, also
suggests another 35% are likely to make their lunch
at home and bring it into work.5
Lockdowns have also changed media habits,
accelerating the shift to digital, much to the
benefit of connected TV and streaming through
services like Netflix, gaming and eSports on
platforms like Twitch and even podcast listening on
apps like Spotify.
Even after lockdowns are eased everywhere,
brands need to make sure that people can
discover and buy their products just as easily
from the sofa as they would in store.
In big cities, we have seen the acceleration
of a new sector – on-demand grocery deliveries.
Apps like Weezy and Getir promise to bring a
range of branded products within 10-15 minutes,
essentially like Deliveroo does (Deliveroo is also in
this space). The apps are cheap and convenient,
with some charging as little as £1.80 for a
delivery, and free delivery on orders over £10,
making them very attractive to consumers.
3 Food and Drink Federation CEO Ian Wright on the Food Manufacture article Food Industry Trends in 2021, published on 4 January 2021.
4 Dentsu: European Cooking Habits Study, 2021.
5 Food Dive: Many at-home trends adopted during COVID-19 to remain after pandemic, Nestlé says. Published April 6, 2021.

6. 6
We have also seen the growing popularity of
meal kits in many markets, offering a hybrid of
the convenience of ready meals with the feeling
of cooking from scratch. Nestlé bought the meal
kit brand SimplyCook in February 2021, and in
April, announced a partnership with Tesco to
introduce a bespoke range.
Restaurant brands unable to open during
the pandemic have also introduced their own
meal kits, either sold directly or via platforms
like Restaurant Kits. Some restaurants are also
blurring the boundaries between eating out
and eating at home with the creation of their
own branded packaged goods. In the UK, for
example, Hawksmoor sells steaks on Ocado, and
Pret sells part-baked croissants at Tesco.
Brands are developing tools and content
designed to reach people spending more
time at home.
Barilla pasta made a selection of playlists on
Spotify in Italy, each the exact length to cook a
variety of pasta, so that home cooks could have
more fun while they waited for their food to be
ready. Pepsi produced a recipe hub to give
inspiration for how people could use their brands
in cooking, for example, fried chicken flavoured
with Mountain Dew.
Brands have also jumped on new media trends.
For example, M&M’s held a 'virtual watch party' in
December 2020 where up to 5,000 fans were able
to watch the Alan Partridge movie for free on a
site hosted by the brand, as a remote but
collective experience.
Finally, we have seen NPD influenced by the
desire to eat restaurant food again. Walkers
introduced a limited-edition range in partnership
with restaurants like Nando's to bring flavours like
Peri-Peri chicken back into people's homes.
Implications for FMCG brands
• Assume that the ‘at home’ effects will
continue thanks to greater flexibility in future
work patterns. More people will be at home
for more days of the week. This means people
will have access to broadband and multiple
screens throughout the day, and also be
home to receive packages. However, they
will need guarantees their items will be
delivered on a specific day or within a given
timeframe.
• Continue to create online experiences.
People have become increasingly used to
remote events, and greater numbers may
now be willing to sign up for online classes
and other happenings. These, too, give
brands access to first-party data which will
help them to better understand customers.
• Invest in connected TV advertising.
While some formats currently look like
standard web banners, YouTube,
Amazon and others are working on ads
that interact with the second screen,
and even fully integrated shoppable TV ads.
These could be game changers
within three years.
• Show products being used at home
in your advertising!
FMCG Trends

7. 3. Protecting the Planet
FMCG Trends 7
The pandemic has helped focus consumers’
minds on climate change and living more
sustainably. According to YouGov’s International
FMCG 2021 Report, 54% of consumers globally
intend to buy more sustainable products once
the pandemic subsides.6 While the need for
hygiene has led to lots of waste in the form of
disposable masks and gloves (not to mention
the single-use plastic needed for meal kits), we
are seeing greater concerns about packaging
and more interest in provenance and
plant-based meals.
Research film Footprint Intelligence was
commissioned by Nestlé Professional to create
the 2021 Sustainability Index, offering guidance
on how to make the food industry more
sustainable. The report argues that consumers want
ethical brands, and not just ethical products, and
states that 88% of consumers want brands to help
them be ecological and ethical through
campaigns and nudges.7
There are now several apps to help people cut
down on food waste, including Karma and Olio,
which both allow people to find food near to its
sell-by date at local retailers and businesses.
Retailers are forming partnerships with some of
these companies, such as Tesco and Hubbub,
working in the community to educate consumers
about how to save money and food through
activities like eating together and using
their leftovers.
Brands like Friesland Campina and Roberts
Bakery have been innovating in using
packaging that is recyclable and resealable.
Drink makers like Innocent are using bottles made
from 50% recycled plastic and 15% plant-based
plastic, with the ambition to be 100% renewable
in the future.
Others are telling their sustainability stories.
Galaxy chocolate now features a QR code
on its packaging that consumers can scan to
read about where their cocoa beans come
from and how their products are made.
Craft brewer BrewDog has just become Carbon
Negative, meaning they don't just offset their
carbon by planting trees; they plant more than
that so that each beer you drink takes carbon
out of the atmosphere.
6 YouGov: International FMCG/CPG Report 2021: Consumer goods in a crisis, 2021.
7 Nestlé Professional & Footprint Intelligence: Footprint Sustainability Index 2021.

8. 8
8 The Good Food Institute (GFI): Plant-based food retail sales grow 27
percent to reach $7 billion in 2020. Published April 6, 2021.
Implications for FMCG brands
• Customers want to do better but need
help. Create tools that will help them to
understand their impact on the climate,
change their behaviour, and track their
progress.
• Reward customers for living more
sustainable lives through discounts and
competitions, either from your own brand
or through partnerships. Use on-pack tools
and sites to show information about
sustainability.
• Investigate the potential for building
marketplaces for buying and selling
used products.
• Partner with likeminded brands to
collectively improve media supply chains.
• Find ways to mirror your own sustainability
initiatives within gaming worlds like Fortnite
and Animal Crossing to bring your actions
to a new audience.
• Do not be afraid to advertise within
sensitive content areas like climate. Use
adtech tools to better understand the
context of where ads appear and be less
scared of news topics.
Both Coca-Cola and Pepsi are working in
the community to support small businesses.
Coca-Cola in the UK is offering to mentor small
hospitality businesses, providing access to its
industry experts so that the owners can re-open
better. Pepsi's Dig In supports black-owned
restaurants in the US through funding and
mentorship. Their insight is that black-owned
businesses find it much harder to get funds from
traditional routes than other businesses.
We are also seeing a growth in plant-based
(vegan) foods. Data from the Plant Based Foods
Association (PBFA) and The Good Food Institute
(GFI) reports that in the US, retail sales of plant-
based foods rose 27% to nearly $7bn in 2020,
with plant-based meat sales increasing 45% to
$1.4bn.8
We have seen brands like Oatly become
increasingly mainstream, to the point that they
are targeting dads in their 40s in their most
recent UK campaign. Another sign that plant-
based eating is becoming normalised is the
number of partnerships brands like Beyond Meat
are forging. In the past year, they have done
significant deals with McDonald's and PepsiCo
to help with NPD and create plant-based
versions of current menu favourites.

9. 4. Be Your Best Self
9
The pandemic is making consumers more
conscious of their health and wellness.
Consumers are looking at brands and asking if they
make them and their families healthier and more
resilient than the competitors. At the same time,
brands are trying to emphasise how they can help
people live a better life through partnerships, new
formulations, and amplifying their existing strengths.
Brands and bodies are using messaging to get
across their own health benefits. For example, the
Irish Dairy Council has enlisted sports stars to
promote their 'Everything Starts With Milk' campaign
to stress the role of milk in helping people to live an
active life.
Nestlé has partnered with the With/n app to help
promote healthy eating, while Colgate has linked
up with the Headspace app to offer mindfulness
content to their customers via their own Colgate
Connected app.
Meanwhile, governments are trying to introduce
new legislation to control how high fat, salt, and
sugar (HFSS) products are advertised, particularly
on channels like digital video that are heavily
used by kids. By 2018, half of European countries
had taken some steps to limit marketing of HFSS
foods to children, according to the World
Health Organization.9
The pandemic has highlighted risks of obesity and
general poor fitness, and one way to address this is
to encourage people to eat more healthily. It will
likely be much harder to advertise unhealthy
products soon. For example, the UK government is
planning to ban all fast-food ads online from April
2022. TV ads would only be allowed after 9pm.10
We are seeing brands use this trend to drive
their own NPD, for example, Babybel, which has
introduced two new enriched versions – one with
probiotics and one with extra vitamins to capitalise
on the new demand for healthier snacking.
9 World Health Organization: Evaluating Implementation of the WHO set of Recommendations on the Marketing of Foods and Non-Alcoholic
Beverages to Children. Progress, Challenges and Guidance for Next Steps in the WHO European Region, 2018.
10 Prime Minister's Office, 10 Downing Street: Queen's Speech 2021 - background briefing notes, Published 11 May 2021.

10. FMCG Trends 10
Implications for FMCG brands
• Help people to understand how your
products can have a beneficial impact on
their lives. Offer easy access to information
about ingredients, stress any health
benefits, and be open about unhealthy
elements. Also be transparent over your
company’s record on mental health
initiatives.
• Create easily accessible tools that provide
information about mental and physical
health and wellness. Use technologies like
voice and AR to make the tools more
accessible throughout the day.
• Use discounts, competitions, and
partnerships to nudge consumers into
better habits. For example, discounts
on healthy products as a treat for
goals achieved.
• Partner with established apps to
contextualise goals and relate them to
products: ‘This snack will power you for 2
km at your usual running speed.’ Also
partner with well-respected influencers
and experts to help them spread their
wellness messages to a wider audience.

11. About Carat
Most recently named a leader amongst global
media agencies by Forrester, Carat is consistently
ranked the #1 media agency in the world with
over 10,000 experts, operating across 190+ offices
in 135+ countries. Carat delivers an unparalleled
capability to unlock real human understanding to
connect people and brands by designing
powerful and engaging media experiences.
Carat is a dentsu company and privileged to
work with some of the most storied and
innovative brands in the world. This article is part
of Carat’s Future of FMCG content series.
For further information, please contact:
Dan Calladine
Head of Media Futures
Dan.Calladine@Carat.com