FOCUS-Packaged food giants push direct online sales to gauge consumer tastes

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* Kellogg, Kraft Heinz among cos investing in direct online sales

* Direct sites allow companies to better leverage customer data

* Sales through the websites of US retail companies are expected to reach $ 20 billion in 2021 -eMarketer

By Siddharth Cavale and Nivedita Balu

Feb. 19 (Reuters) – Packaged food giants including KraftHeinz, General Mills and Kellogg are pushing sales of their products to consumers directly through their own online channels, in a bid to collect more data on consumer habits. buying buyers.

Cheese maker Velveeta Kraft Heinz saw e-commerce sales double in 2020, now accounting for more than 5% of global sales, CEO Miguel Patricio told the VirtualConsumer Analyst Group of New York (CAGNY) conference this week.

The company sells Heinz Baked Beans and Tomato Soup by subscription or in bundles directly to consumers on a “Heinz ToHome” website in the UK, Australia and Europe.

Sales on the site “give us valuable insight into consumer behavior, allowing us to quickly test and learn innovations,” Rafael deOliveira, Kraft’s head of international affairs, told the conference.

Kraft will continue to use the site as a channel to generate strong sales in developed markets, he said.

The company also accounts for sales of its products on marketplaces such as Amazon.com and Walmart.com as part of its e-commerce sales.

U.S. shoppers spent an average of $ 1,271 shopping online last year, 45% more than in 2019, as the pandemic boosted online shopping, according to market research firm Earnest Research. In contrast, the average dollars spent in stores rose only about 7% to $ 3,849.

PepsiCo sells products such as Doritos, Quakeroats, and Gatorade directly to consumers through two websites, pantryshop.com and snacks.com, both of which launched in 2020.

CFO Hugh Johnston said more than 45% of the company’s capital investment over the next few years will be in manufacturing capacity, automation and “accelerating investments in our e-commerce channel.” “.

While major online retailers, including Amazon.com and Walmart.com, continue to collect valuable buyer data, many packaged food manufacturers are also keen to collect their own buyer data.

“COVID (has) just accelerated our digital growth and provided us with another source of data and information,” MonicaMcGurk, head of growth at breakfast cereal maker KelloggCo., Said at the conference.

Kellogg, producer of Corn Flakes as well as Pringles crisps, said on Wednesday it had launched a direct-to-consumer website focused on digestive wellness. The group plans to sell its new gut health microbiome Mwell powder through the site to gather data on customer interest before launching the product on a larger scale.

E-commerce sales have doubled in the past year and now represent about 8.5% of the group’s $ 13.77 billion in annual sales, Kellogg said.

Pillsbury’s dough maker General Mills also sees the benefits of closer monitoring of consumption patterns.

“We are aggressively investing in data and analytics. We are gathering unprecedented insights from the first party data we collect through our brands’ websites,” said Jeffrey Harmening, General Mills, General Mills, during of the conference.

On its Bettycrocker.com website, General Mills has hundreds of recipes using Betty Crocker cake mixes and frosting. certain zip code is buying. The company does not sell food products directly on its website.

However, consumers may have to shell out more if they buy directly from brands’ websites.

Prices on the two PepsiCo sites, for example, were generally higher than those on Walmart.com or Amazon.com, according to Reuters. On Walmart.com, for example, a 10-ounce packet of Doritos NachoCheese was on sale for $ 2.50 versus $ 4.29 on the Pepsico website.

Kraft Heinz offers cans of soup, beans, pasta and baby food bundled in packages ranging from six to 25 items and costing between 10 and 20 pounds ($ 14.01 to $ 28.03) on its site. British web. He told Reuters that the relatively higher item prices and bundling of packs than some other online marketplaces should allow for a margin after including delivery costs.

“In the longer term, we see real value in this channel as being an information and data channel for us,” Jean-Philippe Nier, e-commerce manager for Kraft Heinz UK operations, told Reuters. Uni and Ireland. People are more willing to order direct from manufacturers than they were before. The time is right. ”($ 1 = 0.7137 pounds)

(Reporting by Siddharth Cavale and Nivedita Balu in Bengaluru; Editing by Vanessa O’Connell and Susan Fenton)

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