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Ice Cream Sales Cool Off…But Not As Much As Other Types of Food

How has COVID-19 impacted the Netherlands’ US$402 million ice cream industry?

According to our CPG data*, the lockdown has melted out-of-home demand by over -30%, compared to the same period last year. Merchants were unfortunately not able to reap the gains from the sunniest April on record.

Unilever’s ice cream business, the world’s largest in annual sales, sees half its sales made outside of grocery stores in places like beaches and parks. In fact, the company has been ramping up partnerships with food delivery services to allow consumers to order ice cream along with their takeout.

However, compared to other food categories, ice cream is still holding up relatively well. There has been an even greater decline in revenue for out-of-home consumption of drinks, prepared meals, snacks and candy.

The only question is whether demand for ice cream will be revived in the critical summer months ahead, especially as F&B outlets will be allowed to reopen again.

*About our data:
Suburbia partners with companies in the payments and retail industries to create data sets that track anonymized consumer purchases across Europe, delivering a daily view into some of the world’s biggest consumer brands. For insights on consumer packaged goods (CPG) trends, Suburbia’s data set covers sales in over 14,000 on-trade channels across six countries in Europe.

The Recovery is Real: 50% Jump in Open Merchants in Germany

The F&B industry has been one of the hardest hit by the COVID-19 pandemic. Immediately after lockdown measures were announced, our CPG data* showed only around a third of restaurants in our panel remained open in Germany and the Netherlands.

Clearly, many restaurants needed some time to adapt their business and pivot to delivery and takeout. While there was incremental growth in open merchants in the weeks following the shutdown, growth has been slow and gradual. Since the lockdown, nearly half of restaurants in Germany are now back in business, while 20% more restaurants in the Netherlands have reopened since the lockdown came into effect.

However, it appears that German F&B is seeing a healthier recovery in sales per merchant. While there was a sharp decline in sales leading up to more stringent social distancing measures, it made a significant gain the following week. While German restaurants are still making considerably lower revenue with the loss of dine-in sales, the value of restaurants receipts in the week of 20 April was over 75% of receipt value in a “regular” week prior to the lockdown.

Meanwhile, Dutch F&B merchants have been less fortunate, seeing no sharp bounce-back after bottoming out. Even in mid-April, when it was being reported that food order volumes in many virus-stricken countries were on the rise again as cooking fatigue set in, sales growth in the Netherlands remained minimal and sluggish. Restaurants were just barely raking in half of the sales they used to.

While more restaurants are reopening and sales are slowly picking up again, it will be critical to keep an eye on these figures once F&B businesses in both countries are allowed to accept dine-in customers once again.

About our data:
Suburbia partners with companies in the payments and retail industries to create data sets that track anonymized consumer purchases across Europe, delivering a daily view into some of the world’s biggest consumer brands. For insights on consumer packaged goods (CPG) trends, Suburbia’s data set covers sales in over 14,000 on-trade channels across six countries in Europe.

Erdinger and Heineken are big winners in rise of no-alcohol beer

As we’ve seen in recent years, low- or no-alcohol beverages are on the rise as people adopt healthier lifestyles. It’s reported that Germany could be the largest market in Europe for zero-alcohol beer. But even a smaller market like the Netherlands is becoming a breakout star in terms of merchant and sales growth.

The number of Dutch bars that are stocking non-alcoholic beer are on the rise, and so are sales per merchant – which are growing nearly twice as fast as regular beer. This means establishments that offer no-alcohol beer will see increased sales as more people choose to abstain from drinking.

Meanwhile, sales per merchant for soft drinks – historically one of the main alternatives for alcoholic beverages before zero-alcohol beer came along – have been sluggish, growing a half percent year-on-year in both markets.

In Germany, the top brands for non-alcoholic beer are all from privately owned breweries – with Erdinger being the most popular choice, followed by Maisel and Krombacher. This could be credited to Erdinger’s long-time efforts to market its alcohol-free beer as an “isotonic sports drink”, even supplying it to national athletes during the Olympics.

Meanwhile, in the Netherlands, Heineken’s 0.0 beer is the market leader while another brand in the Heineken portfolio, Amstel, takes second place. Asahi’s Grolsch comes in third in terms of sales volume.

In Freefall: COVID-19 and Retail Sales

This article is translated and republished from the original article in German by Inga Fechner, economist at ING.

Chart of the Week

Numerous restrictions have been in place for over a week to reduce the spread of COVID-19. Schools and stores are closed. Places that tend to be bustling with people, especially when the weather is pleasant, are now eerily empty. It is no surprise that sales in the retail sector have plummeted, as our chart of the week shows.

Daily turnover in Germany and Austria (% change compared to the previous week)

Source: Suburbia, ING Economic & Financial Analysis

While extensive restrictions have been in effect in Austria since March 16, which were announced on March 13, the German government took a little longer to act. Yet, at the same time, public life was grinding to a halt. People’s increasing adoption of social distancing is clearly evident in retail sales since the weekend of 13th March, as we determined from data from Suburbia. Turnover across restaurants, hotels and leisure venues dramatically dropped over the weekend, compared to the previous weekend.

The restrictions are still in effect, at least until Easter, and will continue to be a problem for numerous economic sectors. Fiscal support measures by governments and central banks are an important step in cushioning the impact of the slump. However, the impact cannot be completely reversed. At least for this year, we will see negative growth for the first time since the financial crisis for many economies.

Monetizing Data: A Suburbia Partner’s Story

This payment solutions company has partnered with Suburbia to monetize its point-of-sale transaction data and create value for its clients. Due to client confidentiality, this company has chosen to remain unnamed, though every effort has been made to preserve the integrity and accuracy of their statements.

This fast-growing European company provides point-of-sale (POS) solutions as well as other payment related products and services merchants need to run their business smoothly. It specializes in several niche markets though its solutions can be found in tens of thousands of merchants.

Our goal: “Payments are becoming commoditized so we’re aiming to offer a variety of complete merchant solutions and value-add services to encourage greater customer loyalty. This will also create new growth opportunities for us as a business.”

Our problem: “As our POS systems capture millions of transactions annually, we were sitting on a mountain of data – but we weren’t doing anything with it. But this data started drawing the attention of major market research companies.

We didn’t feel comfortable working with them. They would ask for a CSV dump or ask if we could simply load the data on a USB stick and hand it to them. Once we were asked to report numbers over the phone and someone on the other end would be recording them in an Excel sheet. There are a number of things that can go wrong in these scenarios. It also doesn’t build a whole lot of trust and confidence when you see data being handled that way.”

The solution: “When we met Suburbia, what we learnt was a real eye opener for us. We learnt how our data could be useful for a financial audience. The way that different sources of ‘alternative data’ are being combined to yield new insights was really interesting to us. It made us look at our own data in a whole new light and see the possibilities.

In the beginning, the challenge for us was in making sure we provided our data to Suburbia in a form so that our merchants remain anonymous. Our clients are aware that their data is shared in an aggregated and anonymized way. But you can make some accurate inferences based on, for example, the location and time of transaction. In some cases, there are own-brand products, like a store called Bill’s that sells an item called Bill’s Burger. We took pains to ensure they couldn’t be identified based on details like that, so Bill’s Burger is just listed as a generic burger.

Our mission is for our clients to see that our POS is not just a good investment but they will also see returns on that investment. We have been investigating different propositions and potential revenue models with a small group of trusted clients or ambassadors. So they can potentially be rewarded a certain fee for every transaction processed. They didn’t even know their data could be useful and valuable for others. That’s a fantastic value-add for them and it can become a competitive advantage for us.

It’s not just the money but there’s the possibility of sharing data and insights with our customers. Imagine if they can see not just their own data, but data from across the industry that allows them to benchmark their performance.

Advice for other businesses looking to monetize their data: “It will seem like there are a lot of initial hurdles to overcome. But if you’re working with a partner for data monetization, it’s important to just get to know each other and establish a relationship of trust. Once that’s done, there are two important things to keep in mind:

First, go all in if you’re serious about monetizing your data. Don’t give out a partial data set. Commit to reliably delivering the data at the frequency specified without fail, whether it’s daily or weekly.

Secondly, don’t rush it. Monetizing your data doesn’t happen overnight and we appreciate that it’s a long cycle. It’s a journey where we’re testing and learning together with Suburbia. It’s better to get it done right than to get it done fast, especially in a business like ours.”

If you think that your business generates interesting data, please talk to us. We have a simple, confidential process that lets us evaluate the quality and potential monetary value of your data, and come back to you with a roadmap to monetization.