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As we navigate through the Covid-19 pandemic, our shopping and consumer habits are transforming at a rapid rate. For independent food and drink businesses, the challenge is how to balance these evolving consumer demands with maintaining their core shoppers and delivering what consumers expect from the fine food sector: service and quality.
Keeping a finger on the pulse of the changing shifts taking place is an ongoing obstacle. But it is one that the sector can overcome, and it is one that will create opportunities. We explore how fine food brands can achieve the current balancing act between present demands and future predictions.
“The fragility of our food system has been brought into sharp focus over the course of the Covid-19 pandemic,” emphasises Saskia Nuijten, director of communication and public engagement at food innovation initiative, EIT Food. The pandemic has had an impact on the whole food industry process from the field to the consumer.
In Europe, consumers have had to change their shopping and consumption habits, Nuijten reveals, “almost overnight, with many of these trends likely to continue into this year as we expect lockdown measures to slowly lift.” As the continent experiences extensive nationwide lockdowns, this shift in consumer habits and demands creates a ripple effect across global food value chains.
While the impacts of Covid-19 are still unfolding, Anne Jorun Aas, CEO of Farmforce, highlights how: “Experience so far shows the importance of an open and predictable international trade environment to ensure food can move to where it is needed.” Ever since the Covid-19 pandemic emerged, food actors have been strongly hit by disruptions to supply chains. However, although food shortages became the reality in retail stores following the initial aftermath of the pandemic’s arrival and subsequent lockdowns, the food system as a whole has shown its strength.
“The overall food system has proven quite resilient in most European countries,” indicates Coline Laurent, marketing and communication manager at French blockchain and digital solutions company Connecting Food.
Optimism prevails. “There’s definitely room for a new opportunity to differentiate from mainstream retailing,” shares Cyrille Fillott, global strategist, consumer foods at RaboResearch.
The art of trends in fine food is just that – it is an art. Retailers, wholesalers, producers and farmers are now facing considerable challenges and notable uncertainties that consume the future of the fine food sector.
Yet, with these leading trends come opportunities for the sector to explore and grow. Here, we take a look at the key trends dominating the space in 2021.
The number of products available will undergo a transformation in the UK food retail market, with SKU (stock keeping unit) reduction a key emerging trend. Limiting the number of products available on the shelf is partly related to the supply chain and partly because “traffic will come through the door anyway because the services are closed,” shares RaboResearch’s Fillott. “It is a European phenomenon, and the UK may be leading the charge here on the SKU reduction,” says Fillott.
With restaurants currently being closed and supermarkets not stocking these items, there is the opportunity for more speciality, niche suppliers and products to emerge to appeal to consumers.
An increased focus on food affordability and value are the most pronounced changes recorded throughout the pandemic, the EIT Food’s recent report on the impact of Covid-19 on consumer food behaviours in Europe shows. Instead of restricting fine food, however, here lies an opportunity for brands and retailers to differentiate themselves through a premium product base.
Commenting on the perception of value and price, EIT Food’s Nuijten says, “A focus on value does not mean that consumers will automatically buy the cheapest product.”
Meal preparation is a key trend to emerge amid the pandemic, particularly as remote working has become the new reality. “Many consumers have rediscovered the pleasure of spending more time cooking at home and having meals with their family,” says Nuijten.
Eating occasions at-home dominate the food scene at present, leading the way for fine food brands to carve a point of differentiation and competitive position. Home cooking and dining is proving formidable in the fine food space. No longer reserved for high-end restaurants, fine food options have been brought to consumers’ kitchens as we seek out new, premium and more indulgent at-home choices.
Removing the commute entirely, or even for one day, post-pandemic means that 20% of consumers’ lunches will be up for grabs. “So if you are selling into the business area, suddenly 20% of your volume has gone and it may pop up somewhere else,” says Fillott.
Postpandemic, we can expect this. The question is: Does this impact your business and its revenue streams? For independent fine food retailers, this offers the opportunity to provide consumers with an elevated home dining experience. The fine foods sector can also access the opportunity as some shoppers may want a more exclusive or elaborate lunch or go out to eat at a local food hall.
With consumers becoming more health-conscious and spending more time at home, there has been a growing demand for fresh, healthy food with traceable origins. When viewed in the light of the other consumer changes during the pandemic towards more focus on health and sustainability, “the challenge for food retailers is to offer products that are seen as good value while living up to demand for healthy and environmentally friendly food,” Nuijten continues.
Shopping small and locally, engaging with trusted providers like grocers and retailers, minimising waste and conscious consumerism are leading the food sector. Consumers want to shop locally for their produce and buy locally-grown products. Familiarity, confidence, friendliness, trust and sustainability drive the popularity of local purchases, with fine foods a captive market for these consumers who want to access farm shops, local delis, and food halls. While the environmental and social impact of food production has always been an issue, Aas emphasises, “Covid- 19 has increased the attention and urgency here, with a strong need to collaborate and innovate to fix the food system and make food production more sustainable.”
A unique opportunity is now here for the food industry to engage with consumers and build on these growing sustainability and health trends. Increasingly, responsible production and minimising food waste are important decision-making factors.
Discovering trends and ascertaining how these apply to your specific consumer base is only one piece of the pie, though. Once these trends are researched and identified, the question then becomes: how can you capture the underlying influences of these trends, which represent the genuine and evolving needs of your consumers?
The key is to create transparency, implement traceability, develop trust and use technology to strengthen your ability to provide and communicate these.
In 2021, one of the most notable trends impacting the fine food industry is transparency. Emerging as a clear winner in the trends that will captivate consumer decision-making, three in five global consumers say they are interested in learning more about where their food comes from and how it is made, Innova Market Insights data reveals. Transparency should be present throughout the supply chain to communicate information from farm to fork.
With transparency a significant market trend, Connecting Food’s Laurent highlights: “If producers, storage operators, manufacturers and retailers don’t collaborate, the transparency that consumers are craving for will not be met.”
Food shoppers increasingly demand to know where their food comes from and how it is produced, which can only be achieved by having traceability of the individual farmer and field.
The advent of farm-to-fork traceability solutions such as blockchain is now available to enable agricultural players, storage operators, and food manufacturers to access and provide traceability information on a shared ledger. Insight and traceability into the production level is a “must”, Aas shares, “as it lies the foundation for product quality from the start”.
Measuring and reporting quality at this stage is key for high-end retailers to deliver premium, traceable food options to fine food shoppers. It is a crucial consideration for the entire industry but is especially prominent for independent fine food retailers, which are at the very end of the food chain. Traceability and transparency are crucial and a prerequisite to deal with the many sustainability challenges associated with food production.
By spending more time with ingredients, consumers are increasingly conscious about their quality and sustainable origin. Shoppers want to see the products having certifications to support these claims.
The recent EIT Food Trust Report shows that consumer trust levels have increased in all parts of the agrifood sector in the past year. Alongside the hike in trust comes the rise in consumer confidence in food products, with overall increases of between 3% and 8%. However, there are stark and notable differences in trust levels throughout the supply chain.
Of all players within the European food sector, farmers are the most trusted, with two-thirds (67%) of the public reporting they trust farmers compared to just 13% that do not. Retailers are the next most trusted group, with 53% of consumers expressing their trust. Drawing on why this may be the case, EIT Food’s Nuijten reveals it is, “potentially associated with the Covid-19 pandemic and gratitude towards food retailers for maintaining food supplies during a difficult time.”
Trust in food manufacturers lags, with less than half of consumers (46%) across all countries stating they trust manufacturers.
“Technology is essential to address the trends that we are seeing amidst the pandemic,” says Aas. The number of agtech companies is on the up. With this rise comes greater opportunities to use digital technologies to improve productivity, increase transparency and traceability, and reduce costs.
E-commerce is set to remain impactful. Data collection and analysis also enables consumers to turn data into actionable information and make data-driven decisions. Fine food brands can, and are, listening and taking action by providing in-depth product information to shoppers using QR codes, for example. By scanning them, shoppers can immediately discover precisely where the product comes from, who the farmers that grew and harvested the crops are, and follow the product along its transformation journey.
The opportunities for the fine food sector do come with a caveat, which is linked to the sector’s expectation of a K-shaped recovery—whereby there will be disparity in the economy between individuals with stronger financial and disposable incomes leading to increased spending and those who have suffered economically as a result of the pandemic. “There will be a true distinction within that”, says Fillott. Subsequently, fine food markets may see their previous consumer base dwindle, and they will have to find ways to appeal and attract the remaining shoppers to their fine food selections.
The focus now is “not necessarily on innovation”, says Fillott. While innovative new product development has reduced, which is expected amid the global crisis, it is still sought after. “There are quite a few changes in the market, but innovation is needed,” says Fillott.
“The economic reality of Covid will come later, but it is very unpredictable what it will look like,” adds Fillott. With the uncertainties continuing, calls for collaboration throughout the fine food sector are loudening.
“Collective action is required to address some of the trends we are seeing because of Covid,” shares Farmforce’s Aas. The global food system is highly complex, with many stakeholders. Subsequently, industry collaborations provide the necessary means for brands to make meaningful change. For individual brands looking for opportunities, it is vital to consider their channels and positioning. It is also key to delve into how they can utilise trend forecasting and the application of these in relation to consumer demands.
Importantly, though, fine food brands need to consider these, while prioritising transparency, traceability and building trust with consumers —as these are here to stay, regardless of how fine food trends evolve.
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