August 9, 2021
Bread and Butter: A Look Back at Consumer Trends During the Pandemic
By David Widmar
The impact of the pandemic on human behavior can be measured in many ways, including in loaves of bread and sticks of butter. These two examples illustrate how we changed the way we shopped for food, and the types of foods we chose to make at home, during a truly unprecedented year.
Flour Production in 2020
Figure 1 shows annual production of flour in the U.S., which was 425.8 million hundredweight (cwt) in 2020. This was up from 422.3 million cwt in 2019, or 0.8% higher. Overall, the data on U.S. flour production is fairly consistent over the six years of data observed.
Figure 2 shows the quarterly data from USDA. First, flour production in the U.S. is seasonal, with more production occurring in the second half of the year. This likely corresponds with wheat harvest and holiday baking.
While the annual data was fairly stable, the quarterly data reveal a different situation for 2020. Flour production in the first quarter of 2020 was 4.42% higher than the Q1 average from 2015-2019. Furthermore, the Q1 activity was on par with seasonal highs. In other words, mills in Q1 were running like the bins were full and the holidays were coming. By the second quarter, however, flour production slipped below the five-year average and was, again, lower.
While not clear in the annual data, 2020 included many high/low watermarks for flour production. On a quarterly basis, flour production reached six-year highs for Q1, but also six-year lows in Q2 and Q4.
Bread Consumption in 2020
So, what does this all mean for bread?
While summer is typically a slow time for consumer flour sales, as the first round of coronavirus lockdowns hit, flour started flying off the shelves as Americans turned to home baking. For context: King Arthur sold the equivalent of 23.7 million five-pound bags of flour in 2019. From April 1 to November 20, 2020, they sold 43.1 million. According to Nielsen data, sales of flour were up 155% over 2019 for the week ending March 28, 2020.
These examples illustrate the conditions that led to widely-reported flour shortages at grocery stores across the country, as home bakers stockpiled flour so quickly that the shifting supply chain couldn’t keep up.
Store-bought bread experienced a boom, too. According to Information Resources, Inc. data, during the 52 weeks ending April 18, 2021, the fresh bread and rolls category grew 6.1 % to $15.0 billion in sales — the strongest sales growth in any essential food category.
What drove all that growth? Challenging economic circumstances may have pushed families back to cost-effective staples like white bread. Virtual learning meant that kids needed to be fed all day long at home, putting bread center stage as an easy option for breakfast, lunch, and snack time.
Butter Consumption in 2020
In 2020, U.S. butter consumption increased by 3.2%. That number isn’t so surprising when you consider that we saw increases of 2.4% in 2019 and 6.6% in 2018.
However, a second consideration is the timing – or seasonality – of butter. Figure 1 shows the monthly consumption of butter for 2019 and 2020. One note: this chart is based on USDA disappearance data, which is technically not consumption. However, disappearance is implied consumption.
Just as with flour, when social distancing measures went into effect and home bakers turned to recipes full of nostalgia and comfort, butter consumption outpaced 2019 activity. Retail sales of butter boomed during what is typically the slowest baking season, preventing co-ops from storing butter for use later in the year per usual.
Perhaps a better view of the data is to break down annual butter purchases by month. Figure 2 shows these data for 2020, but also the average for 2015-2019. As one might expect, we see a seasonal trend for U.S. butter consumption that corresponds with the winter holiday (and baking) season.
During the pandemic, butter consumption in April 2020 accounted for 8.0% of annual purchases. The typical share of annual purchases made in April is 7.2%. While this difference seems small, even an increase of 1% is significant. In other words, consumption throughout April and May 2020 (345 million pounds) was well above normal consumption for that time frame (307 million pounds).
The uptick in purchases, however, inverted during the summer and monthly consumption considerably lagged the normal pace in July and August. This timing seems to correlate with efforts taken by industry and USDA to address pandemic-fueled volatility in the dairy sector and the surge in COVID-19 cases that further disrupted food service.
Wrapping It Up – What Consumer Trends Will Continue Post-Pandemic?
While total U.S. butter consumption didn’t significantly change in 2020, especially relative to the overall upward trend in recent years, the timing of purchases certainly did. Flour production experienced highs and lows. And flour and bread recorded unseasonably high sales.
Of course, the pandemic isn’t completely over. Questions remain about how consumer behavior might be permanently altered. The examples of flour and butter show how the timing – not just total volume – of consumption can make a significant effect on supply chains.
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