Brand loyalty

CPG Brand Loyalty Hits All-Time High

Denis Storey
April 30, 2021

eBook: “The Big Book of NPD Secrets”

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eBook: “The Big Book of NPD Secrets”

We’ve curated the best advice from dozens of the brightest minds in food innovation in our new eBook. Download it now for tips on how your business can achieve better, faster product innovation.

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The pandemic might have changed nearly every aspect of our lives, but it’s done little to shake consumers’ faith in their favorite brands. Brand loyalty reached an all-time high in 2021, with 97% of Americans professing commitment to at least one brand, up from nearly 90% in 2019.

According to savings.com, food and beverage companies fared better than any other product niche, with 62% of consumers reporting allegiance to a specific brand. That growing brand devotion helps explain how, for the first time in 10 years, sales growth of national brands outpaced private labels in 2020, according to NielsenIQ research. 

While conventional wisdom suggested consumers cast loyalty aside to buy whichever brands they could find on store shelves, the data doesn’t appear to bear that out. Faced with persistent shortages, consumers stuck with brands they knew and trusted.

National brands prospered because they could take advantage of more agile supply chains, allowing them to narrow their efforts to focus on top-selling SKUs.

Online Sales Soar

Brand loyalty persisted even as shopping at brick-and-mortar locations fell off a cliff due to restricted hours, limits on shoppers allowed inside, and store closings. Even before the pandemic, consumers worldwide embraced online shopping, with digital shoppers jumping from 1.32 billion to 2.14 billion since 2016. 

U.S. consumers spent more than $861 billion online in 2020, the highest e-commerce growth over the past 20 years and an increase of 44% over 2019, according to Digital Commerce 360. Online spending accounted for more than 21% of total retail sales in 2020.

Food and beverage companies thrived, enjoying a 42% increase in 2020 online sales, trailing only the fashion and apparel industry.

Retailers unable to capitalize on this fundamental shift in consumer behavior paid the price. About a third of Americans stopped shopping at one of their favorite stores over the past year because it didn’t have an online storefront – and almost as many went elsewhere because the retailer’s online experience wasn’t as user-friendly as they’d like.

Capitalizing on Brand Loyalty

Brand loyalty is more than a point of pride; it’s a stable revenue stream. Nearly a third of the average company’s sales come from existing customers, according to Fundera. Loyal customers are more likely to spend more. And recruiting new customers is five times more expensive than retaining existing ones.

But there are ways that food and beverage companies can shore up customer loyalty, according to Digital Silk, a creative digital agency, including:

  • Optimizing their website.

  • Investing in an app.

  • Focusing on efficiency and deliverability.

  • Pursuing and encouraging personalization.

  • Appealing to emotions and rewarding loyalty.

Embracing a digital transformation rests at the heart of all these changes, especially in improving operational efficiencies and deliverability. Networked solutions can advance team collaboration, accelerate research and development, streamline supplier and ingredient selection, and automate compliance.

We’ve curated the best tips from dozens of the brightest minds in food innovation in our new eBook, “The Big Book of NPD Secrets.” Download it now for insight into how your business can achieve better, faster innovation.

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