I recall my first meeting with Kirti Singh, chief analytics and insights officer for Procter & Gamble, at which he shared his views on the state and future of the insights industry. One of my biggest takeaways was that our industry wastes immense amounts of time and money designing made-up experiments when there are already millions of experiments happening naturally in the real world—if only we would pay closer attention.

Want to know what shoppers consider the best substitute for your brand? Look for naturally occurring out-of-stocks and see what consumers buy instead. With COVID-19 panic buying resulting in barren shelves, this behavior can be observed at mass scale.  

Grocery shelves are empty. So what?

Are shoppers being forced to try brands that they would never have purchased under normal circumstances? Will these trial purchases lead to the normal levels of repeat purchasing behavior foundational to continued brand growth?

One hypothesis is that smaller brands within affected categories should see an immediate bump in household penetration. To test this, Numerator analysts looked at every food and beverage category and ranked brands by household penetration over the preceding 12 weeks. We then grouped brands into the "top 3," "second 3" (ranked fourth, fifth and sixth in their category) "third 3," and a cluster of brands ranked 10th or lower in their category. Finally, we compared each group’s recent 12-week penetration to the same period one year ago.

We found that the "top 3" brands in each category are seeing the largest absolute growth in household penetration. However, brands ranked seventh, eighth and ninth, in their respective categories (the "third 3") are seeing much larger percentage increases in household penetration (44.3 percent growth on average) as a result of recent panic-buying activity. 

This means that "third 3" brands are growing at a much faster rate than the dominant brands in their category through this period, resulting in short-term share gains. But is this sustainable?

We decided to investigate for early signs of repeat purchase activity in categories where long-term pantry-stuffing is generally not an option. With consumers eating at home more often, the frozen pizza category was a logical place to start.

Between Feb. 17 and March 15, 30.8 percent of American households purchased frozen pizza, up 4.4 points from the year-ago period for a whopping year-over-year growth rate of 16.7 percent. When broken out by brand, we see increased penetration across nearly every leading brand in the category.

A pattern is emerging

DiGiorno might be gaining the most in terms of total penetration and dollar sales, but Freschetta, California Pizza Kitchen and Celeste (all "third 3" brands) are growing at a much faster rate, therefore gaining share. Can they hold on to it?

To see a sustained increase in share, "third 3" brands will need to see the increased rate of trial purchases convert into repeat purchases. Why? Because in a typical year, these brands see the vast majority of their dollar sales come from repeat buyers. And larger brands tend to see an ever-higher proportion of their sales come from repeat buyers, thanks in large part to the Double Jeopardy Law of Marketing: Brands with low market shares have fewer buyers and loyal customers.

While frozen pizza brands see repeat purchases occurring every two to three months on average, these averages can be deceiving. For example, 40 percent of all frozen pizza purchases occur within two weeks of the most recent frozen pizza purchase. And, given that consumers buy the same brand of frozen pizza from one occasion to the next 43 percent of the time, we should be able to see distinct trial sales leading to repeat sales.

We established a baseline of new trial-to-repeat purchase activity in 2019 to compare to COVID-19 shopping behaviors. We analyzed first-time brand purchases between Feb. 24 and March 10, 2019, to see if they led to repeat brand purchases between Feb. 24 and March 24. In 2020, we examined first-time brand purchases between Feb. 24 and March 9 to see if they led to repeat brand purchases between Feb. 24 and March 24.

None of the brands maintained or improved upon their 2019 repeat rate. The significant drop in repeat purchases among Freschetta and Celeste brand first-time buyers might actually indicate that the two brands are suffering greater levels of retail inventory shortages than DiGiorno and California Pizza Kitchen.

Regardless of what’s causing the drop, it seems highly unlikely that these brands will be able to ride the recent wave of new trial purchases to ongoing brand growth. In conclusion, don’t expect this short-term chaos to lead to long-term havoc among brand shares—at least not in the frozen pizza category.