Inside The Marketbasket: What Americans Are Buying By Region

For PG's 64th annual Consumer Expenditures Study (CES), we focus on purchases within the four U.S. regions — East, Central, South and West — to see just how united our states really are when it comes to shopping behavior. Data for this report presents item penetration, or the percent of U.S. households that purchased the item at least once during 2010, and an index for each purchase, illustrating how purchase volume compares among households in each region, with 100 as the average.

East

Is it their relative proximity to England that pushes households in the East to index highest for purchasing tea? At 152 (52 percent higher than average), tea is the highest-indexing category for the region; in fact, the East is the only region where the index for tea tops the average purchase rate of 100. The East also posts the highest purchase index among all regions for coffee, though at 118, the segment finds itself in a three-way tie for 11th place (along with butter/margarine and desserts/fruits/toppings).

The seasonal segment ranks second for the East, at 149 — impressively high but still second to shoppers in Central states. For the remaining top 10 index scores for the East, these shoppers are more likely than those in other regions to purchase within each category segment. These include pasta (146); puddings and desserts (145); canned seafood (138); refrigerated juices and drinks (136); snacks, spreads and dips (135); yogurt (124); bottled water (123); and family planning (120).

Central

Shoppers in the Central region sure have that seasonal spirit! With an index of 201 — the highest of any category in this year's CES report — shoppers in Central states are twice as likely as those in other regions to purchase seasonal items during the year. Of course, it must be noted that these products have a relatively low item penetration, with only 8.9 percent of households making this type of purchase.

In fact, the next two largest-ranking index scores for this region represent some less popular items, including canning and freezing supplies (an index of 139, with a penetration of 8.9 percent), and meal starters (indexing at 130, with a 3.5 percent penetration rate).

Other items favored by Central shoppers compared with other regions include juices and drinks (129); pizza, snacks and hors d'oeuvres (127); coolers (124); canned fruit (119); books and magazines (116); breakfast foods (115); and desserts, gelatins and syrup (113).

South

The South also finds its highest-indexing category within a lesser-shopped item, as ethnic hair preparations post an index of 166 among Southerners; these products are purchased by only 7 percent of U.S. households.

Insecticides, pesticides and rodenticides index at 122 among Southerners, followed closely by sugar and sugar substitutes, at 119. A four-way tie occurs for third-place ranking, with baked goods, fresh meat, automotives and fresheners/deodorizers each posting an index score of 117. Another tie occurs among feminine hygiene products and tobacco and accessories, at 115. Rounding out the top 10 for Southerners is dough products, at 114.

Although overall beer sales had increased 2 percent for the 52-week period ended Feb. 5, according to Nielsen's total U.S. beer report, which includes food, drug, liquor, convenience and other select channel outlets, the most recent 52-week sales figures from the Schaumburg, Ill.-based research firm for the year ending July 23 found the overall beer category growing just 0.8 percent. The premium segment grew 0.5 percent, while domestic superpremiums dropped 5.4 percent. Imports, meanwhile, were off nearly a percent.

Of the top 10 beer brands, Bud Light led the pack, with sales up 0.5 percent for the year ending July 10. Sales of craft and microbrews are soaring, as evidenced by a nearly 17 percent jump in the past year, with consistent quarterly increases. The only beer subsegment showing healthier growth for the past year was imports from Belgium, a bright spot amid an overall down category, with an increase in sales of more than 20 percent — most likely due to increased distribution through Belgium-based InBev's acquisition of Anheuser-Busch.

Creative merchandising approaches taken by some supermarkets are helping to keep beer sales hopping. In-store beer-centered events — think festivals, tastings and cross-merchandised food pairings — geared to generating excitement are putting a big, frothy head on the sale of suds, and, in many cases, local craft breweries are drinking up the biggest benefits.

West

Is it geographical closeness to desert conditions? A higher demand for cocktails? Or all that fresh produce that needs to stay cold? In any case, ice posts the highest index among all categories for shoppers in the West region, at 174; no other region is higher than average for this category.

In a similar vein, the West over-indexes for several liquid categories, including juice and drinks (143), wine (139), and liquor (134). Beer, with an index of 117, misses the top 10 by only two places. The West posts the highest indexes for two of the least-shopped items, including children's cologne (with a 2.6 percent item penetration and an index of 131) and meal starters (purchased by 3.5 percent of households and indexing at 128 for the region).

Also in the top 10 for the West are cottage cheese, sour cream and toppings (at an index of 126); skin care preparations (122); and a tie between packaged milk/modifiers and charcoal/logs/accessories (at 121 each).

CES Fresh Food Insights:

■ Seafood

The smallest of the fresh departments, seafood contributed 4.8 percent to the perishables sales pie. Generally speaking, it was a challenging year for the largest category contributor, fresh seafood, which experienced a 4.4 percent decline in average dollar sales per buyer despite growth in fin fish varieties. All told, consumers spent $57 on fresh seafood in supermarkets during the study's measuring period — a small figure compared with its cross-protein counterpart, fresh meat.

Accounting for a smaller portion of seafood department sales than fresh seafood, sales of prepared seafood products also followed the upward popular migration prepared foods are experiencing in other fresh departments. Prepared seafood dollars per buyer grew 3.8 percent in the past year. Especially noteworthy was that shoppers' total basket rings were larger when prepared seafood items were a part of them.

Methodology

PG's 64th annual Consumer Expenditures Study (CES) is based on data collected by The Nielsen Co. for UPC-coded products, as well as sales estimates made by Progressive Grocer's research department for nontracked categories, including perishables and general merchandise.

Data for total retail sales and share of market for supermarkets and mass supercenters is drawn from The Nielsen Co.'s “Homescan Consumer Facts 2010 Report.” The Nielsen Homescan Panel is made up of 125,000 households nationally dispersed and projectable to the total U.S. population. These households record UPC-coded purchases across all outlets.

Sales for U.S. supermarkets for 2010, shown in millions of dollars, are based on data from Nielsen's Strategic Planner database of UPC-scanned items, as well as on PG estimates for categories for which Nielsen does not collect scan data.

Please note that some totals may not justify, due to rounding or suppression of sales detail. Categories with sales of less than $10 million are subject to omission.

Top vendor and brand data for the adjacent Category Spotlight breakouts is provided by SymphonyIRI Group, a Chicago-based market research firm. This data includes total U.S. supermarkets, drug stores and mass-market retailers, excluding Walmart.

Data for perishable categories also found in the 64th annual CES report was provided by The Perishables Group, a Chicago-based fresh food market research consultancy offering a full spectrum of products and services geared toward complete market and category understanding, including research, analytics, marketing communications, category development, promotional best practices and shopper insights.

An expanded version of PG's 64th annual Consumer Expenditures Report, which includes more in-depth, detailed supermarket sales results, is available for sale on PG's website, www.progressivegrocer.com.

PG's Research Director can be reached at [email protected].

CES Fresh Food Insights: ■ Bakery

With 47 percent of perishable department sales, desserts are a marquee area of consumer interest in the in-store bakery. Indeed, more than 70 percent of U.S. households purchased desserts from the fresh bakery in the past year. Cakes continue to dominate sales, but assortment is extending beyond traditional occasion sheet cakes to appeal to consumers' desire for decadence, high quality and affordable splurges. Indulgent varieties have amped up the quality perception of dessert cakes, with red velvet in particular growing more than 60 percent in the past year.

The cupcake craze also shows no signs of abating and continues to drive bakery sales and purchase frequency. Overall cupcake sales have grown 74 percent since 2005.

Mexican food items reached U.S. food dollar sales of $41.4 million for the 52 weeks ending July 10, 2011, struggling to hit a 1.1 percent increase versus the same period a year ago.

Among the top 10 vendors, Juanitas Foods accounted for the majority of sales, bringing in $23.8 million during this time, for a 2.2 percent increase. Hormel Foods ranked second, with $10.1 million, a decline of 2.8 percent. Among these top players, increases in sales were recorded for Authentic Specialty Foods Inc., La Preferida Inc. and Marquez Brothers International, the last of which had the only double-digit increase, at 39.8 percent.

For the category of Mexican refried beans, it's probably no surprise that the West posts an overwhelming advantage in the index, at 213: sales are more than twice that of any other region. On a percent basis, the West brings in 46 percent of sales, followed by the South, at 30 percent, with the Central and East regions lagging behind, at 18 percent and 6 percent, respectively.

CES Fresh Food Insights: ■ Produce

Prepared fruits and prepared vegetables are shaping up to be the success stories of the produce department this year. Despite their higher price points than loose fruits and vegetables, the value-added categories are steadily gaining household penetration and purchase trip frequency.

Fueled in part by new products being introduced on a seemingly daily basis, all prepared fruit and vegetable categories grew dollar and volume sales at supermarkets during the past year. The growth of value-added fresh-cut produce products was led by a 17.1 percent increase in dollar sales of overwrap fruit and a 9.6 percent increase in dollar sales of pre-cut vegetables for meals, snacks and side dishes.

The growing awareness of digestive health's foundational role in overall well-being continues to represent a solid growth category for retailers, which is hardly surprising given the rate of consumer products that feature prebiotics, probiotics and fiber. Indeed, despite a recessionary climate, the registers continue to ring up escalating sales for products that help consumers achieve excellent digestive health, which continues to be viewed as a “mega-trend” with no slowdown in sales in sight.

It's now the biggest segment of the functional foods market — after energy drinks — and looks set to stay that way. It is also possibly the fastest-growing segment of health, and the evidence is that its growth will continue.

Digestive health products are especially popular among Americans age 55 and older, who currently represent more than one-third of the U.S. population. Aggressive retailers and manufacturers are accordingly angling to build shopper loyalty and a new competitive advantage around increased variety and in-store messaging that support growth categories, segments, and products with specific benefits that link to age-driven health-and-wellness needs such as digestive health.