Food manufacturers prepare for an unconventional holiday season: 'This is our Super Bowl'

When consumers stockpiled food in March at the onset of the pandemic, Del Monte Foods became one of the most emblematic companies of that unprecedented buying spree. Demand for its products hit its strongest levels in more than a decade, and inventory moved so fast and for so long that many canned vegetables and tomato products were briefly in short supply.

Del Monte CEO Greg Longstreet and management knew that with a limited growing season and the critical holiday season looming, they had to act quickly. They partnered with farmers to expand acreage and extend growing cycles.

"This is our Super Bowl. From Thanksgiving to Christmas, for the categories that are deeply embedded in how families prepare meals and holiday dishes, this is our moment. The next few months are a big event for us, a critical time to truly connect and re-engage with consumers."

— Greg Longstreet, CEO of Del Monte Foods

The efforts paid off: Del Monte not only caught up with demand but also built a safety stock sufficient to support above-historical consumption levels at least through next spring. Holiday sales are typically 70% higher than the rest of the year for Del Monte, and in 2020 it has already achieved 100% sales growth.

Longstreet said: "This is our Super Bowl. From Thanksgiving to Christmas, for the categories that are deeply embedded in how families prepare meals and holiday dishes, this is our moment. The next few months are a big event for us, a critical time to truly connect and re-engage with consumers."

Del Monte's portfolio includes iconic canned vegetables and fruits, Contadina tomato products, and College Inn broths and stocks. The company has ramped up digital and social media marketing to promote products and provide recipes guiding consumers on how to cook with them.

The company has also worked with online influencers to attract younger cooks and partnered with celebrity chefs like Laura Vitale to create dishes. Del Monte also teamed up with French's Crispy Fried Onions from McCormick & Co. and Campbell Soup's Cream of Mushroom soup to promote holiday recipes using both brands' ingredients, such as green bean casserole or skillet corn casserole, which retailers then promoted online and in stores.

Longstreet said: "For us, the key is building relationships with the next generation of consumers. Being a stable holiday favorite and becoming part of new traditions as they form. If we can be there and give these new consumers confidence and a great experience when they serve our products to family and friends, we can build a lifelong connection. That's why we're putting in all this effort."

CPG's "boom period"

For food companies, this unconventional holiday season complicated by the pandemic offers a valuable opportunity to connect with consumers looking for cooking inspiration or needing help.

IRI data shows that during Thanksgiving, 68% of people said they would celebrate alone or in small gatherings—with a median of 5 people, down from 8 in 2019; during the December holidays, that figure was 55%.

Smaller gatherings could change consumer purchasing behavior. Take turkey, for example: signs indicate people will buy smaller birds or opt for easier-to-cook cuts like turkey breast.

Krishnakumar Davey, president of strategic analytics at IRI, said: "CPG companies are in a better position than in March or April. Many have been preparing for this. This will give another boost to CPG focused on at-home consumption. This is their boom period, with demand surging more than usual."

IRI notes that food manufacturers can boost sales by positioning products as "giftable"—especially gourmet and seasonal items—while promoting affordable holiday essentials or premium products that satisfy personal indulgence. They can also cross-promote with complementary categories like cooking tools or tableware, and help consumers online with recipes, tips, entertaining ideas, and budget advice.

Hormel Foods said one major challenge ahead of the holiday season is that many consumers are watching infection rates in areas they plan to visit for family gatherings.

Heather Vossler, director of consumer insights and innovation at Hormel, said in early November: "The biggest issue is that consumers say things will be different, and honestly they're still figuring it out. That makes it harder for us to determine exactly what they need, because many consumers aren't sure themselves."

For Hormel, portfolio diversification is key this year, depending on personal circumstances, where cooking happens, how many people are being served, and cooking confidence. With the Jennie-O turkey line, for example, Hormel promotes both traditional whole birds and pre-cut turkey breasts and ready-to-eat products suited for beginners.

Hormel operates a turkey hotline staffed by chefs and expects more calls than usual this Thanksgiving, as a surge of first-time cooks and more people tackle holiday meals on their own.

Dave Anderko, innovation manager at Hormel, said: "People always want confidence in what they're cooking." The purpose of the turkey hotline "is to help you cook, make you feel confident, and hopefully build a long-term relationship with Jennie-O from there."

Fear of failure

Some companies are even capitalizing on this uncertainty. Research by Campbell Soup found that 65% of consumers will celebrate Thanksgiving at home this year, with one in five hosting for the first time. The soup and snacks giant found they are feeling pressure: 37% feel "fairly" or "very" nervous about holiday cooking, and 66% worry about an "epic cooking fail."

To help, the New Jersey-based food maker launched DinnerInsurance.com, where first-time hosts can find "simple, fail-proof" recipes like Campbell's classic green bean casserole, Pepperidge Farm savory stuffing, and Swanson double-rich mashed potatoes. For Manhattan residents, if a side dish fails, gourmet replacements will be delivered on Thanksgiving Day as part of the Dinner Insurance pilot program.

At PepsiCo's Frito-Lay division, Chief Customer Officer Mike Del Pozzo said the company is producing an extra 1.5 million cases of Cheetos, Doritos, Fritos, and other salty snacks—up 5% to 10% from last year—to meet the "expected demand lift" from now through the Super Bowl in early February.

Del Pozzo said Frito-Lay is benefiting not only from consumers snacking more at home, but also from how they plan to gather this holiday season. In the past, people attending large parties might bring a side dish or drinks, while someone else handled the chips. With more small gatherings, more people need to buy snacks themselves and may want a variety of options.

Del Pozzo said: "We think that's very positive for the category overall."

Similar to what CPG companies and retailers did before Halloween, some grocers are setting up Thanksgiving displays earlier than usual to capture sales over a longer period.

Dawn Buzynski, director of strategic communications at Hy-Vee, said the 275-store Midwest grocer evaluated how consumers celebrated Easter and Mother's Day early in the pandemic and found they bought smaller items for smaller gatherings—purchasing habits that influenced what it stocked for Thanksgiving.

In addition to adding smaller turkeys and hams at the meat counter, Hy-Vee is preparing to sell more prepared holiday meals for two or four people, whereas 8- or 12-person sizes were popular in the past.

Buzynski said: "We're preparing for the possibility that customers won't have large holiday celebrations with extended family, and we've adjusted our offerings."

Davey advises retailers to make the most of in-store displays and use online platforms to deliver holiday marketing messages to consumers. They can also expand sales share by finding unique opportunities, such as partnering with local restaurants for meal delivery, launching their own restaurant-style meals, and promoting giftable food and beverages and "build-your-own basket" items.

The Consumer Brands Association estimates that CPG purchases across all categories will grow 9.5% to 11.5% this season, including November and December. With consumer spending expected to rise, that bodes well for both retailers and CPG manufacturers. IRI data shows that bakery, alcohol, meat, and gifts are major drivers of year-end holiday sales in large stores, and these categories may benefit even more this time.

Davey said: "I expect this holiday season to be more optimistic for food manufacturers. There's a huge opportunity in the next three months—seize it and grow share. Holidays are usually a peak season anyway, but this year it will be even stronger."