A new CPG market study from 1010data Inc. reveals strong online sales for key categories within the sector. Findings from 1010data Market Insights show that, when compared to the first half of 2015, CPG online sales grew 42 percent across key categories in the first half of 2016. If current trends continue, 1010data estimates that online sales in the U.S. will surpass $10 billion for these categories for the first time in history.
Given recent high-profile events like Unilever’s $1 billion acquisition of Dollar Shave Club, 1010data says it wanted to learn more about how traditional CPG companies are coming to terms with new online competitors, as well as to examine how legacy manufacturers of consumer goods were faring in terms of in-store vs. online sales. Overall, 1010data Market Insights points to a significant shift toward online shopping, from $5 billion in 2014 to $7 billion in 2015 and to this year’s projected $10 billion in e-commerce revenue for the CPG sector. The 1010data study further shows that consumers’ in-store spending is flat and nearly all of the modest 4 percent annual growth in consumer spending is happening from growth in e-commerce.
In terms of category sales and growth, 1010data’s results show that the health supplements and pet care categories are the largest in terms of overall revenue. The health supplements category already has surpassed $1 billion in online sales, and pet care is more than $700 million; in addition, pet care is the fastest growing category in CPG among categories with at least $200 million in annual online sales. And while smaller at approximately $40 million, laundry and dish is the fastest growing category overall.
Analyzing individual brands’ sales and growth also provides insight into where and how traditional CPG companies are winning or losing online. In the health supplements category, 1010data Market Insights shows that protein supplement maker Optimum Nutrition leads in total single-brand sales. Evlution Nutrition, a newer and rapidly growing brand that sells a majority of its product via the bodybuilding.com website, is the fastest growing brand so far in 2016. Half of the top 20 best-selling online brands are in the pet care category, and Blue Buffalo leads the pack in online sales. Across the entire CPG sector, online upstarts are staking their claim. For example, in the online hair-loss shampoo market, Pura D’or owns a 17 percent percent market share, beating out household names like Rogaine, Nioxin and Kirkland.
“Our data shows that online challengers are making a big impression in their market segments because e-commerce helps them achieve massive growth without the high up-front costs that traditional CPG companies must incur in marketing, distribution and product visibility at brick-and-mortar stores,” said Natalie Seidman, 1010data’s SVP of data insights. 1010data insists that CPGs that want to stay competitive need to get a sense of how consumers shop online, what levers a brand has to increase sales and where marketing and product resources are best allocated. Leveraging e-commerce insights can enable CPG brands to better compete in the rapidly evolving online shopping world, their primary opportunity for revenue growth in U.S.”