NIQ on shifting consumer tides and new opportunities
Although Canada’s economy may be cooling, consumers are not. They are resilient, resourceful, evolving and they’re rewriting the rules. This insight was offered by NielsenIQ’s (NIQ) Carman Allison in a presentation delivered last week (Nov. 24) at Canadian Grocer’s GroceryConnex conference.
Allison, vice-president sales development, North America at NIQ, added: “Growth is going to come to those who listen, adapt and evolve.”
Fast moving consumer goods (FMCG) volume continues to lag population gains, something Allison warns is going to worsen with Statistics Canada projecting population growth in the country to slow in the next two to three years.
“So, we can’t bank on organic growth. There’s not going to be more mouths to feed,” explained Allison. “It’s going to be more about stealing share and looking for ways to grow within our categories or think outside the box for new growth opportunities.”
Allison outlined three “transitional shifts” that could provide growth opportunities for retailers and CPGs in the years ahead:
Buy Canadian movement
Sparked by a tariff war with the United States, the "buy Canadian" movement has been one of the biggest changes over the past year with consumers voting with their wallets and prioritizing Canadian-made goods and services to support the domestic economy, jobs and national identity.
Read: Measuring the tariff effect
But the Buy Canadian sentiment appears to be softening. According to NIQ’s research, 14% of consumers (down 17% in March) are “Canadian Loyalists” (those who will only buy Canadian-made goods and will go without if a Canadian option isn’t available), while 30% (down from 37%) are “American Goods Avoiders”, actively boycotting U.S.-made goods. But the majority (52%, up 10 points) of consumers are “Pragmatic Canadian Supporters”—they prefer Canadian-made goods whenever possible, but will buy U.S. products if they are the best option.
When it comes to stated claims on packaging, the Made in Canada label is up 6.6%. “We’re not seeing any softness as of yet, even though [consumer] sentiment is easing,” explained Allison, adding it’s worth noting that 51% of those gains were due to distribution or greater availability of Canadian products, while 40% of gains were a result of patriotism/sentiment and 9% of gains a result of promotions. Brands can win during the buy Canadian movement, said Allison, buy emphasizing authentic local ties through sourcing and production.
While Made in U.S.A. products saw a drop of 7.1%, “distribution was the main driver of that contraction,” explained Allison, noting there is an opportunity for U.S. companies to work with retailers to address assortment gaps while offering volume-driven promotions.
The impact of GLP-1s
Fifteen per cent of Canadian households now have at least one GLP-1 user, according to NIQ research. Of that number, however, Allison said about 30% don’t stick with the drugs, for a variety of reasons (expense, side effects, lack of results). He also noted the reasons Canadians are using the drugs is almost evenly split between diabetes management (55%) and weight loss (53%).
Generationally, weight loss is a higher priority for younger users, whereas older people are using it more for diabetes management.
“We know there’s a fundamental risk of GLP-1s to our industry as it relates to volume impact,” said Allison. NIQ research shows that after one-to-three months on GLP-1s, users could spend between $100 and $170 less on food. After seven-to-11 months of use, they’ll spend between $350 to $840 less.
Read: The food we eat in the Ozempic era
With GLP-1s suppressing appetites and threatening food sales, Allison said brands must pivot and deliver protein-packed, nutrient-dense, portion-conscious innovation in a convenient format to maintain relevance and value.
Don’t forget about gen-X!
While an often ignored group, generation X (the demographic cohort born between 1965 and 1980) is poised to become the No. 1 consumer group in Canada by 2027. Gen-Xers, said Allison, are forecasted to increase their spending 27% to $361 billion in the next five years.
“There’s a huge opportunity for us to grow,” said Allison, noting that gen-Xers are already spending 5% more on FMCG categories such as cosmetics, snacks, deli meat, hair care, frozen foods and cold beverages. Not only does this group tend to be bigger spenders, but they’re also looking after multiple generations (aging parents and children), which is driving consumption.
To capitalize on the growing influence of generation X, Allison said brands should create premium, health conscious and convenience-driven products that blend nostalgia with modern functionality.
