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Fine food businesses across the industry were forced to adapt to a dramatically changed trading environment when Covid-19 arrived in the UK – but after many months of uncertainty, retailers, producers and wholesalers can now welcome a glimmer of stability. “As patterns of consumer behaviour start to settle and new habits become entrenched, clarity about the future shape of the industry is starting to emerge,” explains Oliver Wright, global lead of Accenture’s consumer goods and services industry group.
After working flat-out for a year and a half, the time has come to reflect on the ripples of change caused by the pandemic. “It’s worth remembering that times of great disruption can also be times of great innovation, as businesses are forced to radically rethink the way they operate,” Oliver continues. “That’s where the food and beverage industry finds itself today. There are huge opportunities for companies that have enough organisational agility to ride the food innovation wave and respond quickly to changing consumer needs.” With this in mind, we have explored a handful of ways that Covid has changed the way consumers eat and buy their food.
Concerns around the health of the environment have long been voiced in the fine food arena, but the pandemic amplified these issues to the forefront of consumers’ minds. Research by Ecotone UK discovered that sustainability is the fastest-growing purchase consideration when consumers buy food and drink. The number of people buying products based on their sustainability credentials has risen by 25% in the last two years alone.
“The pandemic is likely to produce a more sustainable, healthier era of consumption over the next 10 years, making consumers think more about balancing what they buy and how they spend their time with global issues of sustainability,” Oliver says. Accenture’s research shows that shoppers are more conscious of sustainability today, with over half saying they are now more focused on the environment than they were before the pandemic.
“We have also seen consumers looking for food companies to help them make the right choices,” Oliver continues. “More than two-thirds want brands to make it easier to consume more consciously.” The retailers that make ethical consumption more straightforward for consumers – by stocking sustainably packaged products, creating packaging-free features or sourcing from local businesses, will see their esteem rise.
One of the most well-documented changes to occur during the pandemic was the rise of healthy eating. But consumers aren’t only concerned about their waistlines; they are considering how the food and drink they eat will impact both their mental and physical health. “Consumers are taking a more holistic view of the connection between their consumption and their mental and physical wellbeing, with the majority (70%) of people saying that they’re looking to make a fundamental change in their approach to their health,” Oliver says.
Holistic health, which brings together physical, mental, social and spiritual wellbeing, is an all-encompassing approach which is increasingly gaining traction with consumers. This trend is especially prominent in younger age groups, as research by GlobalData found that around a third of consumers aged between 18-34 say mood-boosting and relaxation claims are key to their purchasing decisions in FMCG products. But with half of global consumers reporting feeling extremely or quite concerned about their mental wellbeing due to the pandemic, it’s a trend that’s beginning to reach across the generations.
Furthermore, research by IGD found consumers picked up healthier eating habits during the pandemic. In its latest Appetite for Change research, it discovered more than three-quarters (83%) of consumers changed how they planned, purchased and prepared their food in the first lockdown and over half (51%) claimed to have eaten more fruit and vegetables. Huge food brands, such as Unilever, are acting on the holistic health trend, but fine food retailers already have an upper hand thanks to their considered stocking choices.
Online sales soared during the pandemic – first out of necessity, and then out of habit as shoppers became comfortable ordering their food and drink online. Now, despite a small dip after the lockdown ended, this trend is still looking strong. In fact, research by VoucherCodes.co.uk and the Centre of Retail Research revealed that online sales are expected to make up almost a third of overall retail spending this year, 11% more than was recorded in 2019.
“We have seen a huge acceleration in digital engagement, with online sales booming and set to remain above pre-pandemic levels for the foreseeable future,” Oliver says. “For instance, according to Accenture research, among new or low-frequency e-commerce shoppers, purchases for food to cook at home grew by 333% over the course of the pandemic.”
Accenture’s research also noted that the evolution in consumer priorities caused by the rise of e-commerce can be seen in the growing popularity of innovative business models and consumer engagement strategies in the food and beverage sector, such as food boxes. “Accenture has been tracking these trends since 2016, and digital engagement is increasingly a key factor in consumer’s purchasing decisions – especially in the last year,” Oliver says. “For example, replenishment subscription models are now a key consideration for a quarter of consumers (double the proportion in 2016). This can be seen as part of the broader wellness drive, with regular deliveries helping control consumption and keep temptations at bay,” he says.
More and more retailers and brands are looking to take a slice of the food box market in particular. “‘Do it yourself’ models, such as meal kits, are another rapidly growing trend, with over 60% of consumers now considering them at least occasionally. Nestlé, for instance, invested in Mindful Chef, which provides convenient chef-inspired meal kits with the added benefit of no-waste ingredients,” Oliver adds. While the food box space is now big business for large brands, independents with local credentials and a good sense of provenance, have a strong – and unique – proposition for local customers to consider.
The call to shop local received significant support during the Covid-19 pandemic, with consumers keen to pour their hard-earned cash into their local economy – and going forward this offers independents a key growth opportunity, according to Katherine Prowse, senior insight manager at Lumina Intelligence. A recent report from Lumina indicated that one in five convenience shoppers cite ‘I like to support my local store’ as their main driver to independent shops. “Throughout the last year, ‘Support Local’ campaigns appeared across the country and were well received by shoppers who place such importance on this thriving trend; this is something Lumina Intelligence expects will continue going forward.”
From the baking crazes during the early pandemic days to the demand for alternative cuisines fuelled by a desire to travel through the taste buds, the scratch cooking trend has kept retailers on their toes over the past year and a half. As shoppers cooked more meals at home – whether out of necessity or a newfound appreciation for good handmade fare – independent retailers felt the benefit. “The pandemic resulted in a huge shift towards home-cooking, as foodservice delivery became one of the only alternatives,” Katherine says.
But with the days of lockdown restrictions (hopefully) well behind us, retailers have to be a bit savvier to keep consumers in their kitchens going forwards. Katherine continues, “With shopper habits during the pandemic well established, retailers and operators now have to work hard to encourage consumers to change. Foodservice delivery continues to grow despite hospitality fully reopening. The shift towards home cooking is something that retailers will want to maintain. In-store theatre and meal inspiration will be key to motivating consumers and driving sales.”
In spite of the booming health trend, consumers have also shown a keen desire to treat themselves with more traditional mood-boosting foods, such as luxurious mid-afternoon snacks or indulgent cheeseboard dinners. Little luxuries became staples during the pandemic, whether for self-indulging or for gifting to loved ones who were missed. “Most people are still seeking a little comfort and indulgence in the food they buy, and all the more so after the difficult 18 months they’ve just been through,” Oliver says.
Retailers can keep the spotlight on indulgent treats by stocking options for a range of price points, tastes and occasions. From a mouth-watering cheeseboard hamper with artisan biscuits and a bottle of fine wine to a simple box of vegan chocolates. Products that manage to tick the boxes of fantastic flavour, indulgence and healthy benefits will be surefire winners.
The convenience factor has well and truly returned, according to IGD. While Covid first pushed us away from convenient grab-and-go meals, the easing of lockdown led to a return of food to go, ready meals and other simple food fixes. IGD’s ShopperVista report, Food to go: What’s next for Shoppers, revealed that this sector wasn’t immune to Covid’s changes to consumer habits, however. IGD’s senior analyst for food to go Nicola Knight said that while the sector is making a comeback faster than expected, retailers will have to innovate to secure market share from foodservice operators. “Whilst there have been some new product launches and major projects that were delayed due to the pandemic are now beginning to appear in stores, the challenge for retailers now is whether they can close the gap in market share. It will depend on how far consumers return to pre-Covid habits and how fast retailers adapt to changes in behaviour that stick.”
For retailers, all these changes will act as wake-up calls, Oliver says, “to ensure they have the agility and capability to be relevant to consumers and customers – with a portfolio of products and services that match shifting purchasing patterns – not just today, but post-pandemic as well.”