Last week, I headed to London for CIM and Kantar’s 2019 food and drinks insights event, which brought professionals in the industry together to discuss what’s happened this year in the sector, and what’s coming up in 2020.
As always, the event gave me enough information to write a short book. However, I wanted to share a few key takeaways from the event, grouped into three core themes.
You can’t get away from it, I know. But for good reason. And it looks like that although most working in the sector will know that efforts are being made across the board to become more environmentally friendly, the majority of consumers just aren’t seeing it.
Kantar’s figures showed that only 16% of consumers can name a retailer that’s ‘doing a lot’ to reduce plastic and only 10% can name a brand that’s doing this. A shame, considering that behind the scenes, work is absolutely being done to fight the plastics tide. So why aren’t consumers seeing this? Do they demand too much? Are businesses not shouting loud enough? Or, does the industry simply need better PR? Either way, it needs turning around quickly.
Following the green theme, plant-based eating was a big discussion point. Growth of plant-based meals is up 23% since 2015 and meat free meals are up 4% in the same period. Maybe surprisingly, it’s not vegans or even vegetarians that are driving this growth, in fact, it’s a lot of people making small decisions, such as eating a few plant-based meals per week, which is leading to this rise in plant-based. Older people and families were noted as key drivers of this shift.
Going… for growth
For any hungry business, growth is always the key driver. But, in an increasingly competitive environment and uncertain political landscape, how can retailers continue to thrive? Kantar offered its advice based on its growth brand footprint.
- More presence – adding store space is one of the more obvious drivers of growth, however, is not an option for all retailers. Home Bargains and Co-op were two of the main retailers to jump on this trend in 2019, with the former announcing a jump to 1000 stores and the latter announcing it would open 100 new stores in 2019.
- More channels – retailers are omni-channel and have been for some time. However, the past year has seen major retailers forging partnerships in order to find new avenues for growth. From Co-op working with Deliveroo to deliver groceries, to M&S partnering with Ocado, retailers are increasingly looking for sales through new channels.
- New (customer) targets – Iceland’s 2018 palm oil advert was the retailer’s first foray into a new customer base and we’ve seen the same this year from Co-op, which is targeting the student market with the creation of stores within student halls and in new build flats.
- New needs – reacting to trends and new consumer needs around health, ethics etc., is becoming increasingly important to retailers when it comes to growth. Whether that’s incorporating ‘bring your plastic bottle back’ features into stores, adding more unpacked grocery options, or developing more concept stores a la M&S.
Ok, so this grouping could be classed as cheating, but there were loads more insights that I couldn’t drop into one of the above themes that I thought were too good to miss out on. Here are the last few points of interest:
- There has been no obvious link between a general drop in consumer confidence and grocery sales
- Brexit hasn’t seemed to have an impact on shoppers; however, it has on manufacturers and the supply chain. On that note, Kantar found zero evidence of stockpiling for Brexit – so don’t believe everything the media says!
- Actual grocery growth numbers for 2019 have been low – however, this was attributed to the particularly high figures witnessed in 2018 as a result of the hot summer we had, meaning ice cream and beer sales were up
- For one of the first times in a decade, supermarkets are no longer reliant on discounts to provide value to shoppers, with the trend on the decline over the past three years
- Loyalty is back on the agenda for supermarkets and one worth keeping an eye on. While we’re not sure what the early uptake of Tesco’s ‘Plus Card’ looks like, it shows a clear shift back towards loyalty
So, there you go, the 2020 outlook for the food and drink sector in under 800 words! If you’re a food manufacturer, supplier, retailer or anything in between, looking to take advantage of the opportunities 2020 holds, get in touch to hear about the recent work we’ve done for businesses in the sector.