IRI has announced the launch of the IRI CPG Demand Index Forecasts, a proprietary, fully automated forecasting solution that anticipates consumer demand at multiple time intervals through the end of 2021. The solution projects the impact of complex, interdependent factors on consumer demand, including pandemic persistence, lifestyle shifts, in-home versus out-of-home consumption patterns, consumer sentiment, channel shifts, unemployment, income growth and government events.
Incorporating forecasting and simulation capabilities from the most sophisticated machine learning algorithms, the IRI CPG Demand Index Forecasts is designed to select the best model from tens of thousands of options. The forecasts are for two distinct scenarios: best case (high) and worst case (low). A median point estimate is also provided. These forecasts are updated every week to reflect the latest market dynamics, such as reduced unemployment benefits.
“Now more than ever, it can be difficult for CPG companies and manufacturers to separate temporary shifts from fundamental changes in demand, impacting their ability to develop reliable forecasts in both the short and long term,” said Dr. Krishnakumar (KK) S. Davey, president of IRI Strategic Analytics. “Based on IRI’s unique machine learning capabilities and proprietary data assets, we forecast total market, total edible and total nonedible demand on our website. This methodology focuses on the key variables that are impacting our clients’ businesses and is available to our clients at a more granular level (e.g., brands, pack sizes, retailers, geographies). Our new IRI CPG Demand Index Forecasts, featured in the IRI COVID-19 Info Portal, provides a range of potential demand scenarios for the total market. Even though we do not have the proverbial crystal ball to look into the future, we leverage all of our proprietary data assets and predictive analytics to provide our clients these forecasts to reduce some uncertainty about the future.”
The IRI CPG Demand Index Forecasts is available on IRI’s website and is updated every week with forecasts for multiple time points that reflect the latest market dynamics. Measured channels represented in the index include convenience and multi-outlets (food, drug, mass, club, dollar, military), and measured categories include total store, edible and nonedible demand.
Notable insights revealed by the CPG Demand Index Forecasts in recent weeks include:
- At all time points through the end of 2020, demand for edible goods — even in the worst case — is expected to remain elevated versus the year-ago period across all channels.
- Nonedible demand is expected to lag total store and edible demand for the remainder of 2020 but will remain elevated versus the year-ago period.
- Simulations for the total U.S. food category will remain significantly elevated compared to the year-ago period at all time points through the end of 2020.
- The total U.S. convenience channel is expected to underperform other channels (large format and grocery) in 2020 due to mobility constraints.
The addition of the forward-looking, predictive IRI CPG Demand Index Forecasts solution is a significant enhancement to IRI’s existing resources for CPG manufacturers and retailers navigating the COVID-19 pandemic, which are continuously updated and available on the IRI website. These resources include the latest rapid-response research, data and insights on the impact of the COVID-19 pandemic on global CPG consumer behavior, shopper demands and supply chain challenges.
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- IRI CPG Demand Index: Proprietary Metric Measuring Weekly Changes in Consumer Purchases
- IRI COVID-19 Info Portal: CPG and Retail Insights to Manage the Impact of COVID-19
- IRI COVID-19 Data Dashboard: IRI’s Proprietary COVID-19 Impact Model
- IRI C-Suite Conversations: Learn How to Effectively Manage During COVID-19