Packaged food giants including Kraft Heinz, General Mills and Kellogg are pushing sales of their products to consumers directly via their own online channels, in a quest to gather more data about shoppers' purchasing habits. Velveeta-cheese maker Kraft Heinz saw its e-commerce sales double in 2020, now representing more than 5% of its global sales, Chief Executive Miguel Patricio said at the virtual Consumer 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 To Home" website in the United Kingdom, Australia and Europe. Sales on the site are "giving us valuable insights into consumer behavior, enabling us to quickly test and learn from innovations," Kraft's head of international business, Rafael de Oliveira, said at the conference. Kraft would continue to use the site as a channel to generate strong sales in developed markets, he said. The company also counts sales of its products through marketplaces such as on Amazon.com and Walmart.com as part of its e-commerce sales. U.S. shoppers spent on average $1,271 buying groceries online last year, 45% more than they did in 2019 as the pandemic spurred shopping online, 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 including Doritos, Quaker oats and Gatorade directly to consumers through two websites, pantryshop.com and snacks.com, both launched in 2020. Chief Financial Officer Hugh Johnston said that more than 45% of the company's capital investments over the next few years would be dedicated toward manufacturing capacity, automation, and a "ramping up of investments in our e-commerce channel." As major online retailers including Amazon.com and Walmart.com continue to gather valuable data on shoppers, many packaged food manufacturers are keen to gather their own data on shoppers, too. "COVID (has) simply accelerated our digital growth and has provided us with yet another source of data and insight," Monica McGurk, chief growth officer at breakfast cereal maker Kellogg Co., told the conference. Kellogg, producer of Corn Flakes as well as Pringles chips, said on Wednesday it had launched a direct-to-consumer website focused on digestive wellness. The group plans to sell its new Mwell Microbiome Powder for gut health via the site to gather data on customer interest before it launches the product more widely. 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 dough-maker General Mills also sees the benefits of tracking consumer habits more closely. "We're aggressively investing in data and analytics. We are gathering unparalleled insights from the first-party data we collect through our brand websites,” General Mills' Chief Executive Jeffrey Harmening said at the conference. On its Bettycrocker.com website, General Mills provides hundreds of recipes using Betty Crocker cake mixes and frosting. The site leads people to the closest store or an online retailer where they can purchase the products, thereby generating data for General Mills on what a particular customer from a certain zip code is buying. The company does not sell the food products directly on its website. Consumers, however, may have to shell out more if they shop directly from brand websites. Prices on the two PepsiCo sites, for example, were generally higher than those on Walmart.com or Amazon.com, Reuters checks show. On Walmart.com, for example, a 10 oz pack of Doritos Nacho Cheese was on sale for $2.50 compared to $4.29 on Pepsico’s website. Kraft Heinz offers tins of soup, beans, pasta and baby food bundled into packs ranging from six to 25 items and costing between 10 and 20 pounds ($14.01-$28.03) on its UK website. It told Reuters the relatively higher prices of items and bundling of packs than on some other online marketplaces was to be able to eke out a margin after including delivery costs. "Longer term, we see real value in this channel to be an insight and data channel for us," Jean-Philippe Nier, head of e-commerce for Kraft Heinz's business in the UK and Ireland, told Reuters. People are more prepared to order directly from manufacturers than they were before. The time is now." Graphic: Direct online sales to cross $20 billion in 2021 - /zb_users/upload/20210220/4nzrntlvosq122.png ($1 = 0.7137 pounds) REUTERS
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