The Rise of On-the-Go Consumption: 10 Lessons for Brands in a Changing Market
The global consumer landscape is undergoing a significant transformation, with out-of-home (OOH) consumption making a robust comeback. Kantar’s Worldpanel OOH Barometer study reveals a striking shift in consumer behavior, particularly in the snacks and non-alcoholic drinks market. As we navigate this evolving terrain, brands must adapt swiftly to stay relevant and capitalize on emerging opportunities. This article delves into ten key lessons that businesses can glean from these changing consumption patterns, offering insights on how to thrive in this dynamic market.
The OOH Consumption Comeback
The resurgence of out-of-home consumption is nothing short of remarkable. According to Kantar’s study, OOH sales now account for 38% of the global snacks and non-alcoholic drinks market in Q1 2024, a significant increase from 34% in 2022. This upward trajectory brings the market close to the pre-pandemic 60/40 split between in-home and out-of-home consumption.
The growth in OOH spend is particularly noteworthy, reaching an impressive 14% in Q1 2024. This substantially outpaces in-home growth, which stands at a modest 3%. The disparity underscores the pivotal role of OOH sales in driving the sector’s overall strength.
This shift can be attributed to several factors. As pandemic restrictions ease and consumers regain confidence in public spaces, there’s a palpable desire to return to pre-pandemic routines. Moreover, the rise of hybrid work models has increased the time people spend outside their homes, creating more opportunities for on-the-go consumption. The data also suggests a psychological aspect: after prolonged periods of confinement, consumers are embracing the freedom to eat and drink outside their homes with renewed enthusiasm.
Interestingly, this trend isn’t uniform across all markets. Countries like India, Brazil, the UK, France, and Mainland China are seeing OOH spend growth outperforming take-home consumption. Conversely, markets like Spain, Portugal, and Thailand, where OOH consumption was already well-established, show a different pattern. This variability highlights the importance of understanding local market dynamics in crafting effective strategies.
01: Adapt to Changing Consumer Habits
The rapid shift towards OOH consumption underscores the critical need for agility in business strategy. Brands that can quickly pivot to meet evolving consumer preferences are poised to gain a significant competitive advantage.
For instance, consider the coffee shop industry. As office workers adopt hybrid schedules, their coffee consumption habits are changing. Instead of brewing coffee at home every day, they might now prefer grabbing a cup on their way to the office on in-person workdays. Successful coffee chains are adapting by enhancing their mobile ordering capabilities, expanding their presence near transport hubs, and offering subscription services that cater to this new rhythm of consumption.
Similarly, snack brands are reimagining their packaging to better suit on-the-go consumption. They’re introducing resealable options, single-serve portions, and designs that fit easily into car cup holders or laptop bags. These adaptations directly respond to the changing habits of consumers who are spending more time outside their homes and seeking convenient snacking options.
The lesson here is clear: brands must continuously monitor shifts in consumer behavior and be prepared to rapidly adjust their products, services, and marketing strategies accordingly. This agility can mean the difference between capitalizing on new opportunities and being left behind as the market evolves.
02: Prioritize Convenience and Accessibility
The surge in OOH consumption underscores a fundamental shift in consumer priorities: convenience is king. As people spend more time outside their homes, whether for work, leisure, or a combination of both, they increasingly seek products that seamlessly fit into their on-the-go lifestyles.
Kantar’s study reveals that consumers made 9% more trips for OOH purchases in Q1 2024 compared to the same period last year, with volume increasing by 3%. This data points to a clear trend: people are buying snacks and drinks more frequently for immediate consumption while out and about.
To capitalize on this trend, brands need to prioritize convenience and accessibility in their strategies. This could involve expanding distribution to ensure products are available at key touchpoints throughout a consumer’s day — from transit stations and office buildings to gyms and parks.
For example, some beverage companies are partnering with fitness centers to install vending machines offering hydration options. Others are collaborating with co-working spaces to provide easily accessible snack stations. These strategies not only make products more convenient for consumers but also associate the brand with specific lifestyle moments.
Digital solutions also play a crucial role in enhancing accessibility. Mobile apps that allow for quick ordering and pickup, or that help consumers locate the nearest outlet carrying their favorite products, can significantly boost convenience.
The key takeaway is that brands need to think beyond traditional retail spaces and consider how they can insert themselves seamlessly into their customers’ daily journeys. By prioritizing convenience and accessibility, brands can increase their chances of being the go-to choice for consumers in those crucial out-of-home moments.
03: Innovate for Specific Occasions
The resurgence of OOH consumption has brought with it a renewed focus on occasion-based innovation. Brands that can identify and cater to specific consumption moments are seeing significant success in this evolving market.
India provides a compelling case study in this regard. The Kantar study shows that OOH consumption in India has seen a remarkable increase, with its market share rising from 66% to 71% in just one year, driven by a staggering 44% rise in spend. This growth is particularly evident in the snacking category.
One of the key drivers of this trend is the way Indian brands have innovated to cater to specific occasions. For instance, the brand Haldiram’s, which leads India’s savory snack segment with a 40% penetration, has continually found new spaces to innovate and gain new buyers. They’ve introduced products designed for specific occasions — from tea-time snacks to festival-specific treats.
Another example is the brand Bingo, which has made significant strides in the salty snacks category. Bingo has successfully tapped into the Indian consumer’s love for spicy, flavorful snacks, creating products that cater to different snacking moments throughout the day — from a quick bite during work to a shareable option for social gatherings.
The lesson here extends beyond the Indian market. Brands worldwide can benefit from this occasion-based approach to innovation. This could involve creating products tailored for specific times of day (like mid-morning energy boosters or afternoon pick-me-ups), or for particular activities (such as snacks optimized for consumption during commutes or outdoor activities).
By aligning their offerings with specific consumption occasions, brands can create more targeted and relevant products. This not only helps in meeting consumer needs more effectively but also opens up opportunities for premium positioning and increased brand loyalty.
04: Balance In-Home and Out-of-Home Strategies
While the growth in OOH consumption is significant, it’s crucial to note that in-home consumption still plays a vital role in the market. Kantar’s study shows that despite the OOH resurgence, in-home sales still account for 62.3% of the market in Q1 2024. This underscores the importance of maintaining a balanced approach that caters to both in-home and out-of-home consumption patterns.
The pandemic has reshaped consumer behaviors in complex ways. While there’s a clear trend towards increased OOH consumption, many habits formed during lockdowns persist. For instance, people may still prefer to stock up on snacks and drinks for home consumption, while also indulging in OOH purchases more frequently than before.
Successful brands are those that can effectively straddle both worlds. Take, for example, the strategy adopted by some beverage companies. They’re offering larger, family-sized packages for home consumption while simultaneously promoting single-serve options for on-the-go refreshment. This dual approach ensures they remain relevant regardless of where consumption occurs.
Similarly, snack brands are creating product lines that cater to different consumption scenarios. They might offer larger sharing bags for at-home movie nights alongside individually wrapped portions perfect for tucking into a work bag or gym kit.
The key to success lies in understanding the nuances of each consumption context and tailoring products and marketing strategies accordingly. This might involve different packaging solutions, varied portion sizes, or even slight product modifications to suit different consumption environments.
Moreover, brands should consider how their in-home and OOH strategies can complement each other. For instance, a positive OOH experience with a product might encourage consumers to purchase larger quantities for home consumption, and vice versa.
By maintaining this balance, brands can ensure they’re capturing value across all consumption occasions, maximizing their market potential in this evolving landscape.
05: Leverage Traditional Trade
The Kantar study reveals an interesting trend in the channel landscape: a resurgence in the importance of traditional trade. This is particularly evident in markets like India, where traditional trade channels have seen a significant uplift in spend within the salty snacks category, increasing from a 31% share of value in Q1 2023 to 35% in 2024.
This shift underscores the importance of not overlooking traditional trade channels in the rush to embrace modern retail formats or e-commerce. In many markets, particularly in developing economies, traditional trade remains a crucial touchpoint for consumers, especially for impulse purchases like snacks and drinks.
The success of brands like Haldiram’s and Bingo in India can be partly attributed to their strong presence in traditional trade outlets. These brands have effectively leveraged the vast network of small, independent stores that characterize India’s retail landscape, ensuring their products are widely available and visible at the point of purchase.
For brands looking to capitalize on this trend, several strategies can be effective:
- Develop strong relationships with traditional retailers: This can involve providing support in terms of merchandising, promotions, or even helping to modernize their operations.
- Create packaging and formats suited to traditional trade: This might include smaller pack sizes that align with the cash flow of both retailers and consumers in these channels.
- Implement targeted marketing strategies: Use point-of-sale materials and local marketing initiatives that resonate with consumers shopping in traditional outlets.
- Optimize distribution: Ensure efficient supply chains that can reliably serve the often fragmented network of traditional trade outlets.
While it’s important to embrace new retail formats and technologies, brands shouldn’t neglect traditional trade channels. In many markets, these outlets continue to play a crucial role in reaching consumers, particularly for OOH consumption occasions. By effectively leveraging these channels, brands can expand their reach and capture a larger share of the growing OOH market.
06: Monitor Inflation Impacts
The Kantar study reveals a significant shift in market dynamics as we move into 2024. While inflation was a major driver of value growth in 2023, particularly for in-home purchases, its impact has notably diminished across both in-home and out-of-home (OOH) sectors. This change signals a pivotal moment for brands to reassess their growth strategies.
In Q1 2024, the price per unit for OOH purchases increased by only 2% year-on-year, a marked deceleration from the 5% rise observed in Q1 2023. This slowdown in price-driven growth is pushing brands to focus on volume-driven strategies to maintain and increase their market share.
The research shows that consumers made 9% more trips for OOH purchases in Q1 2024 compared to the previous year, with volume increasing by 3%. This trend underscores the opportunity for brands to drive organic growth by encouraging more frequent purchases and increased consumption volume, rather than relying on price hikes.
To capitalize on this shift, brands should consider strategies such as:
- Introducing new product formats or sizes that encourage more frequent purchases or higher volume consumption.
- Implementing loyalty programs that reward repeat purchases and encourage higher basket values.
- Focusing marketing efforts on increasing consumption occasions, perhaps by suggesting new usage scenarios for products.
- Investing in product innovation to add value for consumers, justifying any necessary price increases while also driving volume growth.
The key lesson here is that as inflationary pressures ease, brands must pivot from a price-driven growth model to one that focuses on increasing purchase frequency and consumption volume. This shift requires a deep understanding of consumer behavior and a willingness to innovate in product offerings and marketing strategies.
07: Explore Cross-Channel Opportunities
The Kantar study highlights a significant trend in the evolving retail landscape: the blurring of lines between different retail channels. This presents a unique opportunity for brands to expand their presence and capture a larger share of the growing OOH market.
The research shows that coffee shops, bakeries, impulse outlets, and modern trade (hypermarkets, supermarkets, and discounters) are all benefiting from the OOH consumption recovery. Notably, bars, cafes, and coffee shops saw the strongest rise in share, with an uplift of 1.2%. However, the study also emphasizes the rising importance of ensuring that snacks and drinks for immediate consumption are available everywhere, including grocery stores.
This trend towards cross-channel availability opens up new possibilities for brands. For example:
- Snack brands traditionally sold in supermarkets are now partnering with coffee shops to offer their products as accompaniments to beverages.
- Beverage companies are expanding beyond traditional retail to place their products in gyms, offices, and co-working spaces.
- Fast-food chains are entering the retail space by offering packaged versions of their popular menu items in supermarkets.
The key to success in this cross-channel approach is maintaining consistency in brand image and product quality across all touchpoints while adapting to the specific needs of each channel. This might involve creating channel-specific packaging, adjusting portion sizes, or developing exclusive flavors or variants for particular outlets.
By exploring these cross-channel opportunities, brands can increase their visibility, reach new consumer segments, and create multiple touchpoints throughout a consumer’s day. This strategy not only drives sales but also reinforces brand presence and loyalty in an increasingly fragmented retail landscape.
08: Understand Local Market Dynamics
The Kantar study emphatically demonstrates that global trends in OOH consumption are not uniform across all markets. This variability underscores the critical importance of understanding and adapting to local market dynamics.
For instance, the study shows that while OOH spend growth is outperforming take-home consumption in countries like India, Brazil, the UK, France, and Mainland China, the opposite is true in Spain, Portugal, and Thailand. In India, OOH consumption has seen a remarkable increase, with its market share rising from 66% to 71% in just one year. Conversely, in markets like Spain and Portugal, where OOH consumption was already well-established, the growth patterns differ significantly.
These divergent trends highlight the need for brands to develop market-specific strategies rather than applying a one-size-fits-all approach globally. This might involve:
- Tailoring product offerings to local tastes and preferences. For example, in India, where spicy flavors are popular, snack brands might focus on developing bold, spicy variants.
- Adapting distribution strategies to suit local retail landscapes. In markets with a strong traditional trade presence, like India, brands need to focus on building relationships with small, independent retailers.
- Customizing marketing messages to resonate with local cultural norms and consumption occasions.
- Adjusting pricing and packaging strategies to align with local economic conditions and consumer purchasing power.
The key lesson here is that success in the global marketplace requires a nuanced understanding of local market dynamics. Brands must be willing to invest in market research and local expertise to develop strategies that resonate with consumers in each specific market they operate in.
09: Focus on Brand Building
Despite the shifting landscape of consumer behavior, the Kantar study reaffirms the enduring importance of strong brands. The research references the annual Brand Footprint study, which measures the most-chosen brands globally. This underscores that even in a market characterized by changing consumption patterns, brand strength remains a crucial factor in consumer choice.
For instance, the study notes that Lay’s is the most-chosen snacking food brand for OOH consumption globally. Meanwhile, Kit Kat and Kinder have achieved the biggest growth in Consumer Reach Points (CRPs), Kantar’s measure for determining the most-chosen brands. These examples highlight how strong, recognizable brands can thrive even as consumption patterns evolve.
In the current market, effective brand building strategies might include:
- Emphasizing brand values that align with contemporary consumer concerns, such as sustainability or health and wellness.
- Creating engaging, shareable content that resonates with consumers across various digital platforms.
- Developing brand experiences that bridge the gap between in-home and out-of-home consumption, creating a cohesive brand narrative.
- Leveraging data and technology to deliver personalized brand interactions that enhance consumer loyalty.
The key lesson is that while adapting to changing consumer behaviors is crucial, brands must not lose sight of the fundamental importance of brand building. A strong brand can provide a competitive edge, driving consumer preference and loyalty across various consumption occasions and channels.
10: Capitalize on Post-Pandemic Habits
The Kantar study provides insight into how certain behaviors formed during the pandemic have become entrenched as new parts of everyday life. This presents both challenges and opportunities for brands as they navigate the post-pandemic landscape.
For instance, the study notes that in India, snacking habits developed during the pandemic have become a regular part of daily routines. This has contributed to the significant growth in OOH snack consumption in the country.
To capitalize on these evolving habits, brands should:
- Identify which pandemic-era behaviours are likely to persist. This might involve conducting consumer research to understand which new habits consumers intend to maintain.
- Develop products or services that cater to these new habits. For example, if increased snacking between meals has become normalized, brands could create portion-controlled snack packs designed for this purpose.
- Adapt marketing strategies to reinforce and support these new habits. This could involve creating content that suggests how products fit into consumers’ new routines.
- Consider how the blending of home and work life might impact consumption patterns and develop offerings that cater to this hybrid lifestyle.
The key lesson here is that the post-pandemic world presents a unique opportunity for brands to align themselves with newly formed consumer habits. By understanding and catering to these persistent behaviors, brands can position themselves for long-term success in the evolving consumer landscape.
Conclusion
In this rapidly evolving consumer landscape, brands that remain agile, consumer-centric, and innovative are poised to thrive. The shift towards out-of-home consumption presents numerous opportunities, but success hinges on understanding local market dynamics, balancing strategies across channels, and building strong brand identities. By applying these ten lessons, businesses can navigate the changing tides of consumer behavior and position themselves for sustained growth in the post-pandemic world.