COVID-19 will accelerate the growth of online grocery shopping beyond 2021, said global market research company Euromonitor International. The firm's new COVID-19's Effect on Packaged Food whitepaper highlighted the impact of COVID-19 on home eating, snacks, dairy products and global supply chains, as well as the trends that will prevail beyond 2021.
“The packaged food industry is one of the few areas to experience a surge in demand as a direct result of the pandemic,” said Tom Rees, Food and Nutrition industry manager at Euromonitor International. However, restocking and maintaining the inflow of goods has become more complicated, tied to workforce issues, border closures and a general increase in demand, he added. As a result, some grocery retailers had to ration supplies, online and offline. Euromonitor's research also revealed that e-commerce is the fastest-growing channel for global packaged food sales, recording a 21% growth in 2014-2019.
The white paper highlighted several short, medium, and long-term impacts of COVID-19 to global packaged food. A short-term impact of the pandemic was the closure of foodservice businesses prompting consumers to eat at home. More at-home meals also increased purchases across grocery retailing. But while online shopping has become more common, the report explained that supply chains are feeling the pressure as borders close across the world. Also, the workforce reduced through infection, self-isolation and travel restrictions.
Medium-term, Euromonitor sees the surge in e-commerce grocery shopping continuing from the third quarter of the year, as social distancing continues. Even as foodservice starts to return, the shift to eating at home is likely to stay in place to some extent as a result of financial uncertainties and pressures, said the report. Buying food for cooking and ready-made meals at home remains a priority.
Post COVID-19’s long-term impact from 2021 onwards will see reduced consumer spending power and food choices, said Euromonitor. Budget-friendly options will characterise this, discounters being principal beneficiaries. Consumers will spend less money on eating out even when foodservice outlets return, and affordable treats will remain accessible as consumers compromise on other luxuries.
Finally, while the pandemic jumpstarted the move towards online grocery shopping, several consumers will still have poor e-commerce experiences. Euromonitor forecasts that the customer base will grow by 2021 onwards. However, operators will need to improve consumers' shopping experience to retain them. (Image from Pixabay)
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