Brand loyalty is eroding under supply chain and price pressures, survey finds

A new article on Marketing Dive says that more than eight in ten consumers purchased a different brand from the one they normally purchase in the past three months, according to new research from Inmar Intelligence sent to Food Dive. Lower prices of substitute brands influenced this decision for more than 65% of shoppers while out-of-stocks for the original brand motivated 51% to make a switch.

• About 65% of consumers have switched brands "often" or "very often" in the past three months, the survey found. Among shoppers who made a switch, 44% said they would repurchase the new brand even if the original preferred brand was available again, while 36% would return to the original brand.
• The CPG supply chain has been wracked by labor and ingredient shortages, shipping delays, and fuel price increases, which has left many store shelves with insufficient inventory. Meanwhile, manufacturers have been passing along higher costs to the end consumer, who appears to be taking note and shifting their shopping behavior.

Supply chain constraints and out-of-stocks have been a key challenge for food and beverage manufacturers in 2021. This unreliability has driven many consumers to try other brands on shelves. Brand switching is especially apparent in categories like dry grocery goods (crackers, cookies, and cereals), where nearly 66% of consumers have opted for alternate brands.

Cereal manufacturers have seen a wave of demand as consumers committed to breakfast at home during the pandemic, which has triggered out-of-stocks for brands such as Post's Grape-Nuts and Kellogg's Frosted Flakes. Last week, Kellogg announced it would invest around $45 million in restructuring its North American supply chain over the next three years to meet the demand for its ready-to-eat cereals.

Frozen foods (55%), nonalcoholic beverages (46%), and alcohol (42%) round out the list of categories where most consumers have bought different brands than they usually purchase. Conagra, manufacturer of frozen brands such a Healthy Choice, Marie Callender's, Birdseye, and Banquet, has faced millions in expenses as it made adjustments to its distribution network to keep up with demand and reduce out-of-stocks.