When it comes to how the pandemic affects retail, supermarkets are fairly high up the food chain. But if they don’t pay close attention to how those dollars are spent, could lose their footing.
As of November 2020, last year’s grocery sales rose to $777 billion, an 11.6% increase over 2019. The cause of the increase, and where those new dollars are going, should interest, and concern, retailers.
Overall spending rose, in large part, because there were fewer price cuts and promotions after the pandemic as shoppers sought the items they needed with greater focus and urgency. Now consumers are putting more thought into how they are spending. As we ease into the new normal, more of the goods they need, or prefer, are changing.
Some of these shopping trends are a re-emergence of preferences that existed before the pandemic, now heightened due to the fallout of pandemic behaviors and limitations. Many food sellers therefore have a foothold on meeting demand, and startups have been quick to help.
Here are five food-shopping trends that shouldn’t be ignored, with examples.
The emergence of climate-conscious eating reaches back at least a decade and has been adopted, by many, in the form of the “climatarian diet.” In a nutshell, the diet calls for choosing foods with lower CO2 emissions. Some fast-casual chains are heeding the call: Panera PNRA 0.0% is labeling its menus to help customers reduce their carbon footprints with climate-friendly “Cool Food Meals.” And Chipotle’s ordering app shows customers the “foodprint” of their orders. Some grocery sellers are similarly seeking products with reduced C02 emissions. In Washington State, the Kroger Co. KR -0.9% has partnered with an urban farming network called Infarm to include living produce farms within select stores, cutting transportation and storage.
A Taste For Eco-Packaging
About 15 million tons of polystyrene, the material frequently used to make carryout packaging, is produced globally in a normal year. The pandemic has forced an increase in such takeout packaging and plastic bags, while at the same time it caused some retailers to slow or sidetrack their sustainability plans. This confluence of events has accelerated environmental concerns about the “plastic tsunami,” and consumers want retailers to offer alternatives, fast. Innovative companies are stepping in to help. The start-up Apeel Sciences makes edible coating for produce that it says can double the lifespan of fruits and vegetables. And Verterra, a sustainable-package maker, introduced carryout containers made from balsa from tree stumps.
Restaurant Eating At Home
It’s a safe estimate that nearly every household increased its use of restaurant takeout and delivery in 2020 – year-over-year meal-delivery sales rose 125% in November. It’s safe to assume many of those who ordered out will want to continue. Food sellers are capturing part of the restaurant dollar by launching and/or updating their own chef-style premade entrees and meal kit options. One requirement will be making them easy, as regional grocer Giant Food is evidently doing with its Cook-in-Bag line of pre-seasoned oven- and crockpot-ready meals, introduced Jan. 12. For more aspirational shoppers, Albertsons and Walmart WMT +0.8% are partnering with the online subscription service eMeals, which automatically adds meal ingredients to users’ online shopping lists based on their dietary preferences.
Sourdough wasn’t the only thing fermenting in homes in 2020. In avoiding nightclubs and bars, many people took to ordering to-go cocktails from local restaurants and bars, and many started mixing craft drinks at home. These new “quaren-tenders” are seeking fresh ideas on mixers and others ingredients, and not just for the hard stuff – dry January means many want mocktail fixings. Enter subscription and direct-delivery services such as Shaker & Spoon, Saloon Box and Cocktail Courier, which offer ingredients with or without alcohol. Many supermarkets, including Whole Foods WFM 0.0% and Wegmans, operate on-premise bars and restaurants. If they aren’t looking to partner with these cocktail-delivery services, or planning their own cocktail delivery lines, they soon could be.
Foods That Take The Edge Off
Shoppers may want something other than alcohol to ease their anxiety, however. The percentage of consumers who tried hemp-derived CBD products rose to 25% in June 2020 from 20% in May 2020, according to The NPD Group. In response, the supermarket chain Fresh Thyme Farmers Market is among those increasing selections. Meanwhile, Pepsico’s PEP +0.4% Driftwell beverage includes a different ingredient – amino acids – that some studies show relaxes the mind, and a bedtime ice cream called Nightfood delivers sleep-supporting minerals. This focus on calm can be extended to the shopping experience, in-store and online, through seamless order and fulfillment options.
Food sellers benefitted during the pandemic in large part due to their necessity. But there’s no denying the strides the industry has made to fast-track innovations in online ordering, delivery and shopper-curation are impressive.
Time-pressed shoppers, however, don’t stay impressed very long. Yesterday’s great ideas stimulate an appetite for even better offerings today. There’s a place at the table for all supermarkets, if they want it.
Bryan Pearson is a Featured Contributor to The Wise Marketer and currently serves as a director and strategic advisor to a number of loyalty-related organizations. He is the former CEO of LoyaltyOne.