The consumer packaged goods industry is not reaping the benefits of a fairly robust economy, according to the IRI's Consumer Connect survey. Even though 55% of households say their financial health is good, CPG unit sales growth is anemic and the non-food sector is struggling even more. This article is copyright 2018 The Best Customer Guide.

The Consumer Connect Index, which monitors consumers' financial health and CPG behaviours for factors such as brand loyalty, attitudes toward organic/natural food and beverages, perception of national compared to store brands and frequency of using retailers' and manufacturers' coupons, came in at 98.7 for Q2 2018. This is virtually identical to Q2 2017 (98.6) and only slightly less than Q1 2018 (99.5). With a benchmark score of 100, a Consumer Connect Index score of more than 100 reflects consumers who are less price-driven, more loyal to favorite brands and better equipped to maintain their desired lifestyles without changes.

Results from the Q2 2018 Consumer Connect survey reveal that select consumer sectors are still struggling despite the healthy economy. As a result, consumers are embracing a variety of money-saving strategies and making trade-offs to save money:

In addition to these money-saving strategies, consumers are simply buying less to spend less. This is having a clear negative impact on non-food unit sales trends. However, all is not doom and gloom for the CPG industry - indeed, there is reason for optimism. The economy appears to be on a positive trend, and many consumers said they expected their financial position to improve during the coming year.

Even among groups that are struggling, consumers expect their household's ability to save money will improve: 58% (total), 64% (households with kids), 54% (households with income less than US$35,000) and 43% (Hispanics). In addition, these groups are showing a willingness to invest more in premium-tiered CPG solutions during the next six months: 30% (total), 28% (households with kids), 31% (households with income less than US$35,000), 22% (Hispanics).

"CPG brands and manufacturers also have opportunities to entice consumers to spend more to trade up to higher-end products and/or to get select benefits. They need to continue to think creatively and strategically in order to bring consumers what they want: excitement, convenience and value," said Susan Viamari, vice president of Thought Leadership for IRI. "Consumers are smart and they have choices. They know that they can shop around and they know that their choices are virtually unlimited. Brands and retailers that can stand out with a strong value proposition are the ones that will satisfy today's choosy shoppers and be rewarded with growth and loyalty."