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Major issues have been raised in the food industry and the food supply chain during the Covid-19 outbreak. As a result, these are now at the forefront of the industry’s innovations, initiatives and investments. “People seem to have increased their preference of a healthy diet to protect themselves and their immune systems, food safety and food security have gained more attention, and food sustainability problems have become much more visible and urgent,” explains Anne Jorun Aas, chief executive officer of Farmforce.
Technology is playing an increasingly prevalent role in gathering and sharing information throughout the supply chain too – and will continue to guide strategies in the post-Covid landscape. “The expectations for transparency are growing, so we expect to see more fine food brands exploring how they can respond to these new demands post-Covid,” reveals Coline Laurent, marketing and communications manager of Connecting Food.
While the issues affecting today’s industry are complex, we are witnessing how real progress can be made when brands consider the bigger picture beyond their bottom line, recognise and document what is and is not effective, and take actions to improve those that are not working. “In the height of the pandemic, consumers were looking for indulgent moments from their fine food – which would act as a treat in replacement for the lack of socialising and normal life,” shares Meenesh Mistry, co-founder of natural, gluten-free and refined sugar-free cookie brand Wholey Moly. “We are seeing that continue post lockdown,” highlights Mistry.
Here, we explore three of the leading demands shaping and shifting our food and drink industry, and that we can expect to see evolve in the post-lockdown and post-Covid eras:
Health, wellness and functionality are increasingly sought-after by conscious consumers who want their food and drink to contain nutritional, immune-boosting and health-focused properties. Although the rise of health and wellness was a prominent trend before Covid-19, the pandemic has sped up shoppers’ desire for healthier choices. Shoppers are willing to pay a premium price point to support their health and wellness, with products’ overall functionality a key purchasing consideration.
Immunity products are thriving in the functional food and drinks market, with brands subsequently centring their premium efforts on claims that actively provide functional benefits. We are seeing this in the rise of products such as prebiotics, probiotics and protein enrichment. Improving gut health is a growing area of interest to health-seeking consumers. Increasingly shoppers want to combine health and nutrition, showcasing the rising awareness and adoption of the food as a preventative medicine trend.
Overall, consumers are now more aware of their health and immune system, and therefore seek functional food to support their goals. This heightened awareness can come in several facets, Jorun Aas reveals: “Some turn to newer options around food and drink for shorter-term immediate, tangible effects; some are looking to superfood ingredients or new technologies that deliver nutrients to get ‘healthy’ efficiently; others again are looking at altogether new ways of approaching eating to support their mental health.” Fine food providers are having to learn more about their target consumers’ needs and cater directly to these demands.
We are seeing continued innovation and expansion in the immune space. Products are evolving from health supplements and packaged goods to immune-boosting properties with more specific ingredients and benefits. A growing body of research into immune health will drive interest in its benefits. Personalised nutrition strongly resonates with consumers as they search for functional foods and specialised advanced nutrition advice.
“When it comes to the wellness aspect, many consumers see an overlap between wellbeing and tackling sustainability challenges, and therefore make food and drink choices to support issues such as the environment,” says Jorun Aas. The rapidly increasing supply of plant-based options to meet vegan, vegetarian and flexitarian diet preferences brings this to the fore. Increasing concerns around farmer income, child slavery, and deforestation also play a central role in how we think about food and make our purchasing decisions.
“Climate change is having a big say in what consumers are looking for in their food,” relays Mistry. “We are seeing a keener interest in plant-based and meat alternative foods which is driving some great innovation in the sector,” adds Mistry.
Describing the congruence of health and sustainability as “critical in harnessing interest for robust and bush-proof solutions like Farmforce”, Jorun Aas notes that these map farming communities, how food is produced and the sustainability impact of food production. “The drinks space is where we are seeing the most change in consumer demand for health and wellness,” reveals Mistry. “There is huge interest in low and no alcohol, Lucky Saint being a great example, and more on the wellness side, there is an emergence of Kombucha brands and CBD-infused drinks,” Mistry adds.
Today’s buyers are also curious about the locality and provenance of the goods they purchase. Synonymous with high quality too, food and drink that is both sourced and supplied locally and backed by stories on the roots of the ingredients that make up the finished product are leading the way for premium produce. Online retail continues to dominate our shopping behaviours as convenience, user experience and delivery options rank high on consumers’ wishlists in the current shopping environment. “Lockdown is the main factor that has forced us all to shop more locally,” Mistry states.
Locally produced food and direct farm-to-consumer shopping has increased during the pandemic due largely to consumer preferences, Jorun Aas agrees, as a result of “consumers wanting to avoid standing in long queues as well as trade issues such as international transport restrictions, logistics and labour challenges causing import delays and shortages.” The bigger industry players are in a strong position to create highly engaging and successful e-commerce platforms. Yet, local fine food suppliers can emphasise their presence and benefits in this digitally-enhanced food and drink era too. As consumers want local produce, large brands with comprehensive platforms are likely to team up with local fresh food providers to develop an optimised, effective and consumer-focused supply chain.
“Local supply also has the advantages of a shorter supply chain and often more easily accessible information on how the food was produced,” outlines Jorun Aas. “Yet, in some developing markets, it has been difficult to document traceability and food safety, and we see increasing demand for Farmforce in those markets – where this was not a concern before the pandemic,” Jorun Aas explains.
Consumer demands are continually evolving. “Lately, we are seeing consumers looking beyond just what is good for themselves, and more towards what is good for the food system as a whole, meaning also for the planet and for society,” says Laurent. Consumer concerns are all seeking more transparency. Shopping locally is set to become one of the lasting legacies of the pandemic. In the UK, 91% of consumers who have been shopping locally this past year and throughout the pandemic plan on doing so beyond it, Barclaycard Payments research shows. Supporting independent retailers and smaller businesses like farm shops is a key factor influencing consumers’ ongoing interest in shopping close by.
However, ‘local’ can mean very different things, Laurent expresses, asking: “Do all of the ingredients have to be local? Or only the product processing and manufacturing steps? Is shopping at a local grocery store enough?”.
“Given these different definitions for what it means to be local, providing complete transparency on the food products is the best way to ensure consumers can make their own educated choices,” highlights Laurent.
The pandemic has also made consumers reevaluate their purchase priorities. According to a report by McKinsey released in August 2020, Covid-19 has created financial uncertainty for consumers. These unknowns have forced many to shift their focus to essentials like food and cut down purchases of non-essential items. “At the same time, the pandemic has also heightened consumer awareness of health and safety and accelerated the interest and shift to organic, natural and fresh food,” relays Jorun
Aas. “There is also a greater interest in how retailers and brands interact with various stakeholders along the value chain including farming communities,” she highlights.
Amid the pandemic, the Lipstick Effect has the potential to detrimentally impact the fine food sector. After all, consumers are more conscious of cost and value for money, and as such, are making fine food and drink brands work harder for theirs. However, with money concerns elevated, so too are other values that drive our purchasing habits, namely health and wellness, local ingredients that detail their origin, and high-quality produce. Currently, it is these needs that consumers are prioritising and turning to premium food and drink offerings to provide the products, properties and positionings they crave.
The growth of appreciation for local, provenance and quality shows no signs of slowing down. However, the food and drink industry needs to stay up to date with the Lipstick Effect—consumers’ tendency to replace big and expensive purchases for smaller, luxurious and treat-based alternatives, amid a crisis — and how it is destined to evolve into a long-term movement.
“The higher the quality of product, the more expectations consumers will have for that product,” emphasises Laurent. Consumers want to access a wide, attractive and well-located selection of premium ingredients to ensure their quality. Consistency in the quality of product purchases is critical to ensure repeat buys from consumers’ retailers and brands of choice. As today’s consumers are hungry for information, transformation and traceability in our shared food system, they are more comfortable searching for quality produce and utilising third-party platforms, social media and online reviews to undertake their own quality-control strategies. “Consumers are no longer looking for products that have fancy labels but then cannot document their impact on sustainability and the farming communities where they source from,” shares Jorun Aas.
Premiumisation and diversification have even emerged in perhaps unlikely areas of the food and drink industry due to the pandemic. High-end fish products such as scallops and lobsters as well as premium desserts and smoothies are making their way into freezers, further highlighting the permissible indulgence trend and the Lipstick Effect taking hold. The frozen sector is also expected to see rising numbers of pre-wrapped premium goods to minimise direct contact, appealing to consumers’ safety, hygiene and handling concerns, the British Frozen Food Federation’s (BFFF) Frozen Food Report 2021 revealed.
Commenting on the purchasing factors impacting whether consumers opt for high-quality fine products over mass or not, Mistry confirms it comes down to: “Health and wellness, provenance and brand story.”
As we recover and look to the future, consumers are focusing their buying habits on health and wellness, supporting local communities and businesses, and contributing to the wider health of the planet. The fine food and drink brands that reflect these needs and present the range of high-quality ingredients, stories and finished products that consumers are actively seeking and searching for will prove valuable.