The food and drink trends to lookout for through 2022 and beyond
2021 was another eventful year to say the least! From beginning the year in lockdown, to the hospitality sector reopening its doors to consumers, before closing the year with a pivot back to remote working, the food and drink sector has again had to navigate countless changes in consumer behaviour.
As the year draws to a close and we head into 2022, we’ve been exploring what’s on the horizon for the industry and recently attended The Chartered Institute of Marketing’s (CIM) ‘what next for the food and drink sector?’ webinar, in collaboration with Kantar.
The webinar shone a light on those in the sector who have evolved their business models to survive the turbulent times we’ve found ourselves in. It also looked into what the future holds for those who have not reacted to changing consumers behaviours efficiently, and explored what’s expected across retail in the not-to-distant future. Here are our six key takeaways that businesses in the sector should keep front of mind as they prepare for 2022…
1. In home occasions will continue to rise
Data suggests we’re still spending 6% more time at home than pre-pandemic. We’re spending less time travelling and less time in the workplace - and this is having a huge impact on the way we shop, where we shop and what we shop for.
As such, the large grocery shop has experienced some growth, as we did 50 million fewer small grocery trips through 2021. Consumers worked hard to make shopping more efficient during the initial height of the pandemic, making fewer trips to the supermarket became the new norm. But, when we do go, we now spend more.
Takeaway has also grown significantly. This year we’ve seen an increase in consumers enjoying stay-at-home occasions, which were 11% higher than in 2019. However, the value of these occasions has dropped. Traditionally, takeaway food was something to enjoy on birthdays, weekends or special occasions, whereas these are now much more prevalent in consumers’ everyday lives. For example, last year, the ‘meal in box’ category continued to experience growth, presenting an exciting opportunity for those in the sector to capitalise on. People still want the restaurant experience; however, they’re now embracing the opportunity to enjoy fine dining from the comfort of their own home.
On the contrary, OOH (out of home) spend is yet to fully recover. While the value of OOH occasions has gone up, frequency is down on 2019 levels.
2. Continued eCommerce growth
eCommerce has of course been around for quite some time, but the pandemic has resulted in it disrupting large grocery stores more than ever before. Online shopping is now playing a much bigger role in the grocery retail sphere and is continuing to grow at a rapid rate. This is hardly surprising as increasingly companies like Deliveroo are delivering groceries to consumers doors in less than an hour, providing shoppers with the ultimate convenience.
Retailers are making huge investments when it comes to creating the ultimate online experience for their consumers and the future impact of this digital transformation is expected to be huge.
3. Sustainable shopping
Similar to recent years, consumers are becoming increasingly environmentally conscious. Last month’s COP26 conference in Glasgow shone a light on the true extent of the impact climate change is having on the planet and it is clear that consumers are becoming increasingly aware of the changes they need to make in order to reduce their carbon footprint.
‘Eco actives,’ essentially shoppers who are highly concerned about the environment, now represent 29% of the UK’s population. This number demonstrates that consumers are more conscious than ever about reducing waste, and now feel an inherent responsibility to be more sustainable. We expect that this number will continue on a significant growth trajectory and is therefore something that should be firmly front of mind across the board.
5. HFSS legislation
HFSS (high in fat, sugar and salt) legislation, which restricts the promotion of foods in this category in favour of healthier options comes in to effect next year and will have a huge impact on the food and drink sector.
The aim of the policy is to help improve the nation's diets and reduce children's sugar intake. However, 40% of take-home food and drink is classified as HFSS, so the impact of this new legislation is likely to be huge.
5. Diversifying product portfolio
The pandemic resulted in many businesses diversifying their product portfolio/service offering in a bid to not only survive, but thrive – and the FMCG sector was no different. We saw Monster introduce new products to reach a broader range of consumers, while Seabrooks introduced sharing formats in response to the growth of in-home experiences, which resulted in a £2M growth for the brand. Beyond food and drink, brands like Flash diversified beyond just cleaning products to launch cleaning systems, adding £8M to the brand. While Lenor focused on growing its presence in bargain stores, resulting in £5M growth just by moving into this new sales channel.
Further portfolio diversification comes in the form of flavoured alcohol, which was traditionally just alcopops. This category has however expanded to so much more – think beers, ciders and spirits. Tesco alone now has 47 flavoured alcohol SKUs, as these continue to grow in popularity - alongside those in home experiences.
6. Savvy spenders and the growth of own label
Consumers have become much savvier with their hard-earned cash. They’re looking at how much they spend, where they spend and most importantly, what they spend on.
Many are looking to make small savings and, as a result, are choosing cheaper products than they had previously. Consumers are opting for own label over the brand, and this behaviour is expected to continue.
What are you expecting to disrupt the food and drink sector next year? Let us know over on Twitter @RefreshPR or drop us a note.