Free digital copy
Get Speciality Food magazine delivered to your inbox FREEGet your free copy
Whilst the eventual fatality rates, duration of the disease and effectiveness of national government policies are too early to predict, it is more certain to say that the virus will have a profound impact on food and drink habits in the short- and long-term. This is especially true given that on a daily occurrence, the risk of a recession is something that intensifies.
Currently, the food and drink industry does not appear to have been adversely impacted by the global spread of the virus, especially compared to other industries. This has been helped by panic buying and as a result of this, the main challenge for brands being to ensure they can meet up with demand. However, in the long-term, the outlook for the food and drink market will be less optimistic. Whilst staple, economy items such as tinned food, fruit and items such as milk and bread should remain inelastic, consumers will become increasingly conscious of their spending habits. Indeed, food inflation is already a genuine issue for many consumers who find shopping to be an expensive choir. Add to this that many consumers will be experiencing a drop in income due to the virus and it means that many will be actively looking to adjust their shopping habits. As such, a greater focus on behavioural traits synonymous with recessionary environments will emerge. This will include trying to cut down on non-essentials, switching between brands, trying to avoid food waste, scratch cooking and turning to private label brands more frequently.
However, this is not to say that consumers will be completely cost prudent when it comes to non-essential food and drink products. As well as the physical impact of COVID-19, it is also something that will be having an extreme effect on levels of anxiety within households. The fact that initial concerns about food supply chains seem to have diminished and some governments offering financial support, there will be evidence of consumers turning to food and drink that offers moments of escapism from daily turmoil. Moreover, when it comes to such occasions, consumers will tend to be less attentive to nutritional intake because of the focus on stress alleviation. It is also worth noting that some consumers will turn to nostalgic products that remind them of the past and simpler times, again this is something that can reduce price sensitivity. Additionally, as restrictions on movement are also lifted and a sense of normality begins to return, there will be spikes in non-essential spending as consumers look to celebrate.
However in the long-term, the reality is that the long lasting implications that the disease will have on the economy, means that consumers will adopt increasingly frugal spending habits as they juggle and struggle with their finances and look to make their money go further.