The COVID-19 Driven Forced Homeconomy Era... Convenience Foods, Hand Wash, and Cigarettes Sold Like Hotcakes

Impact of COVID-19: Domestic FMCG Market Grows 7.7% in Q1 2020
Convenience Foods and Fresh Foods Grow with Spread of Home Meals... Hand Sanitizers Increase

[Asia Economy Reporter Lee Seon-ae] The domestic FMCG (Fast-Moving Consumer Goods) market experienced explosive growth in the first quarter of this year amid the fierce spread of the novel coronavirus infection (COVID-19).

According to Kantar, the world's largest marketing research company, on the 27th, the domestic FMCG market in the first quarter of 2020 (January to March) saw a 7.7% increase in purchase amount compared to the same period last year due to the impact of COVID-19. Food excluding fresh products led the overall FMCG market growth with a 14.0% increase in purchase amount, while fresh food increased by 6.4%, and non-food products decreased by 1.2%.

This analysis was conducted based on actual data collected from FMCG purchase records of 5,000 household panels operated by Kantar Worldpanel division over a total of 12 weeks from December 30, 2019, when COVID-19 fears began in Korea, to March 28, 2020.

In the fourth week of February (week of February 24), the domestic FMCG market showed a brief surge. The total FMCG market purchase amount in the fourth week of February increased by 23.7% for food (including fresh food) and 33.9% for non-food compared to the previous week. This was analyzed as a result of consumers spending more time at home due to the rapid increase in new daily confirmed COVID-19 cases surpassing 100 on February 22, and the announcement of the postponement of kindergarten, elementary, middle, and high school openings on February 23, which heightened anxiety and concentrated consumption in the fourth week of February.

However, after recording a sharp 25% increase in purchase amount in the fourth week of February, the domestic FMCG market returned to its previous level in the first week of March and maintained stability throughout March.

◆Convenience foods and fresh foods grow together due to the spread of home-cooked meals within households= In the food market excluding fresh foods in the first quarter of this year, the noodle category grew across the board. Noodles, which are easy to cook in various ways and easy to stockpile, grew by 30.5%, ranking first in purchase amount growth rate among food categories.

Among representative noodle products, the purchase of dried noodles, perceived as healthier than fresh noodles and fried noodles such as pasta, rice noodles, and udon, which can be cooked in various ways, increased noticeably. Additionally, bagged instant noodles, which had not shown visible results until last year due to competition from a diverse portfolio of home meal replacements (HMR), also grew by 30.3% in purchase amount.

Frozen dumplings and cooked frozen foods, traditional strongholds of home meal replacements (HMR), continued their growth trend due to COVID-19. During the first quarter, frozen dumplings increased by 25.7%, and cooked frozen foods by 23.9% in purchase amount. In terms of purchase experience rate, frozen dumplings and cooked frozen foods recorded 50.5% and 60.2%, respectively, up 5.2 percentage points and 2.6 percentage points compared to the same period last year. Frozen home meal replacements are moving beyond the snack category to become staple dishes on our tables.

Cooking ingredients also benefited from COVID-19. Sauces, pastes, and cooking oils for cooking grew, with cooking oil, the most basic cooking ingredient, seeing a significant increase in purchase amount.

Along with this, before COVID-19, many consumers had become accustomed to dining out and preparing meals with convenience foods, minimizing and simplifying cooking time at home. However, in the first quarter of this year, rice purchase amount, which had been declining due to various HMR rice products, saw a brief increase.

Moreover, as time spent at home with family increased due to COVID-19, leading naturally to the spread of home-cooked meals, consumption of vegetables and meats also increased. Among meats, growth was observed in the order of beef, pork, duck, and chicken.

Compared to the same period last year, the purchase amount growth rates for fresh foods in the first quarter of this year were 20.6% for vegetables, 17.7% for rice, and 14.6% for meats.

◆Hand sanitizers, representatives of health and hygiene, record the highest growth rate within FMCG= In the non-food category, significant growth was centered on specific hygiene products such as hand sanitizers (hand wash), soap, and paper products, while little change was observed in other areas.

The purchase amount growth rates in the non-food category in the first quarter of this year were 506.0% for hand wash, 38.4% for soap, 26.8% for home cleaners, 24.1% for toilet paper rolls, and 24.0% for fabric softeners.

In particular, hand wash purchase amount exploded more than fivefold compared to the same period last year in the first quarter, recording the highest growth rate in the entire FMCG market. Even after COVID-19 subsides, consumer awareness of hygiene is expected to increase interest in hand wash. However, it remains to be seen whether the growth trend in the first quarter will continue firmly.

◆Metropolitan area conventional cigarette market grows 2.6%... Nationwide expansion analysis planned from April= Despite increased health concerns due to COVID-19, the metropolitan area (Seoul, Gyeonggi, Incheon) cigarette market (including tobacco and heated tobacco products) in the first quarter of 2020 showed a 2.6% increase in purchase volume compared to the same period last year.

In March, with increased time spent working from home and indoors, an increase in the average weekly purchase volume of less odorous heated tobacco products was observed. The average weekly purchase volume of heated tobacco products in March rose briefly by 3.3% compared to February.

Currently, Kantar Worldpanel division is collecting and analyzing real-time cigarette purchase data from 2,000 smoker panels in the metropolitan area (Seoul, Gyeonggi, Incheon), and plans to expand the cigarette market survey nationwide starting this month.

Director Kim Ji-won of the Worldpanel division said, "The growth in the food category in the first quarter of this year is analyzed as a result of the home economy trend, which had been centered on one- to two-person households, expanding to general households as time spent at home increased." He added, "While there may be limits to sustained rapid growth from these lifestyle changes within households, it is important to keep in mind that these changes will be key elements of new consumption patterns emerging in the post-COVID era, depending on the category."

This content was produced with the assistance of AI translation services.