Thirty-two percent of consumers worry holiday celebrations will cause COVID-19 cases to spike, and 31% say they aren’t looking forward to the holidays the way they usually do, according to new research from IRI

However, Americans will find new ways to celebrate the holidays. The shift to in-home celebrations due to restaurant restrictions will benefit CPG retail. Still, the uncertainty of holiday spending led retailers to start the holiday season early this year, with winter displays and assortment widely available as of mid-October.

Food retailers and manufacturers have the opportunity to help consumers create holiday excitement by providing recipes, merchandising, and seasonal entertainment suggestions. They can promote gourmet and specialty food items as great gift options. Online sales remain important as the pandemic continues. IRI found the online channel is the only one where consumers expect to spend more money than they spent last year. The report notes retailers with omnichannel options will benefit most from holiday spending, for both gifts and groceries.

Holiday outlook

Only 29% of consumers plan to host or attend a Thanksgiving meal with extended family who don’t live with them, compared to 48% in 2019. The median number of people expected this year at the main Thanksgiving meal is five, down from eight last year. As a result, more people will prepare Thanksgiving meals, some of them for the first time.

Strong Thanksgiving turkey sales are projected, with an emphasis on smaller birds and cuts suitable for smaller gatherings. IRI also notes many consumers see turkeys and other roasting meats as purchases that help stretch the meal dollar—turkey sales have been up during the pandemic. The report suggests retailers also promote chicken and other cuts of meat to appeal to smaller gatherings and use marketing messages that focus on leftovers and multiple meals out of one meat purchase.

Similar to Thanksgiving, fewer people expect to have December holiday celebrations with extended family who don’t live with them. IRI research found prices and increased consumption will lead some consumers to spend more for holiday groceries but even more consumers say they’ll cut back to save money.

Source: Home for the Holidays from IRI

Opportunities for food companies 

IRI notes the following opportunities for food manufacturers:

  • Offer special packaging for the holidays and position products as gifts. 
  • Promote holiday essentials to support financially-strapped consumers, while also marketing premium products that appeal to shoppers who want to enrich holiday experiences. 
  • Create online resources with holiday themes, including recipes and cooking tips, entertainment ideas, and budgeting tips. 
  • Look at offering cross-promotions with other holiday items and related categories such as cooking tools or tableware.

Opportunities for retailers:

  • Make the most of in-store displays, while also using online platforms for holiday marketing messages. 
  • Bring in spending that would have gone to on-premise celebrating by promoting at-home entertainment ideas. 
  • Partner with local restaurants for meal fulfilment or offer restaurant-style meals. 
  • Promote giftable food and drinks, especially gourmet and specialty items, and upsell with “build-your-own-basket” items. Items such as candy, baking, and liquor can contribute to lifting seasonal sales.