We’ve heard it endlessly since the onset of the COVID-19 pandemic: This coronavirus era has created a “new normal” for every aspect of life.
But what does that mean? And how could it apply to food retail?
Euromonitor International’s Tom Rees offered insight in one of the research firm’s latest blog posts. He noted the “new normal” of food retail is still taking shape, but some trends, such as increased online shopping and greater interest in immunity-boosting foods, are already identifiable.
“But beyond such shifts, we may see developments such as retailer loyalty lessening as DTC (direct-to-consumer) reaches more people, the emergence of ‘lockdown diet’ marketing and increased commoditization of a basic grocery offer,” Rees wrote. “While vaccination remains a hope for the future there are certainly further twists to come for the new normal in food.”
Rees pointed to a phenomenon we’ve all encountered. While government-mandated lockdowns offered ample opportunity to cook at home and focus on healthy eating, many consumers took the opposite route, turning to processed foods and restaurant takeout or delivery. Euromonitor’s Lifestyle Survey found just over 25 percent of 2020 respondents order delivery at least once a week. That’s up from about 15 percent in 2015.
On a positive note for the confectionery industry, Rees noted the “threat of economic recession” will likely increase consumers’ interest in affordable treats like candy and other sweets. I wasn’t in the candy industry during the Great Recession but I imagine we saw similar behavior between 2008 and 2010.
Affordable will be key, Rees added, since the demand for premium products we’ve seen develop over the last decade will likely reverse with diminished idisposable incomes.
“This will increase the popularity of economy ranges,” Rees wrote. “Discounters and private label will prosper. And given the continuing need for social distancing and the success of online shopping, it is possible that the core grocery shop will become even more commoditized.”
As mentioned, online grocery shopping has boomed since the start of the pandemic as consumers became less inclined to visit brick-and-mortar stores. But as Rees noted, this is an issue for manufacturers, like those in the confectionery and snack industries, who rely on impulse purchases.
However, direct-to-consumer (DTC) offerings could help make up for it. Rees pointed to the two DTC sites Pepsico launched this year, PantryShop.com and Snacks.com, that aim to allow consumers stock up without stepping foot in a physical store.
“DTC can serve convenience and perhaps price needs, auto-reorder models mean running out of favorites becomes a thing of the past, and the effort of virtual shopping (e.g. booking slots, choosing products) is avoided,” Rees wrote.
Setting up a successful online confectionery shop, especially with the speed required to meet demand in this evolving COVID-19 environment, isn’t easy. (We’ve published stories with tips from 3dcart for this express purpose.) But having an online option is absolutely critical for weathering the pandemic.
This “new normal” will likely be different in a month, three months and a year from now. Just like the coronavirus itself, it’s tough to predict the direction in which things will head. Staying flexible will only help manufacturers and retailers navigate this difficult time.
