Thanks to the Covid-19 pandemic, customer buying habits have greatly changed in recent months. As a result of restrictions imposed by governments around the globe, the customers now can only leave their houses to buy some essential items. Some mature household names profited as customers find a semblance of convenience in brand names they knew – and as retail stores given priority to the more common products over challenger brands in some cases.
When citizens engage in comfort eating, snacking opportunities have risen significantly. At the very same time, the health issues at the opposite side of the scale have seen several individuals experiment for the first time with vegan food. This turbo has charged a change in how people shop has occurred over a short time and is evolving further.
Such improvements provide the product creators at packaged-food suppliers with a competitive trading context. It’s impossible to measure how the disease outbreak has affected creativity at the present. Any products that ended up getting introduced during the quarantine days would have been in the pipeline still, and the manufacturers we spoke with about this article said that the pandemic had not affected current NPD plans.
However, some noises about creativity have come from several of the huge food and beverage producers. Mondelez International and Coca-Cola Co., for instance, have publicly announced that they plan to reduce the amount of SKUs in their pipelines and redefine product channels to remove the longer tail of minor projects and devote capital to fewer, more scalable and flexible initiatives.
These developments may have been motivated in part by the effect Covid-19 had on the supply chain of grocery stores, which became disrupted throughout the initial days of lockdowns enforced internationally after unparalleled rates of customer stockpiling.
“There’s been some provisional declines in the range – so products have been delayed or kept in the warehouse – just to ease the processes in the store,” affirms John Want, marketing manager for US baked products giant Rich Products in Middle East and Europe.
Rich Products newly introduced personal packaging in reaction to public health issues on certain items traditionally marketed or seen loose. “Every manufacturer and every dealer out of home is searching for individually packaged items or a sales system that ensures the customer that the food is healthy and that it is a product of high quality,” says Want.
Owing to investment in tracking shopper attitudes, the company identified demand for personal packaging. “If you’re a transactional seller because you don’t completely grasp how shopper behaviour develops or improves it’s far tougher for you to react with the flashers on,” Want says. “We think it would be beneficial to realise what was going on in terms of customer behaviour, because we had already planned some things [in terms of NPD] that we concluded to speed up now.”
As per Amanda Young, the Kraft Heinz’s chief of US R&D, it is a similar scenario at their company. She says that customer behaviour shows everything that Kraft Heinz is doing in terms of creativity.
“Today, even more than before, knowing and adapting to their desires is important, and forecasting how such needs can change in our current climate,” says Young. “I assume that transactional learning strategies would become more essential in this complex setting.”
Head of Innovation at Mondelez’s Snack Futures, Brigette Wolf recognises that transactional development would be critical when food industry respond to increasingly changing market preferences. “Although this emerging ‘fresh standard’ can appear a little different from now – or a few months back – the world we’ve been aware of over the last five years has witnessed a dramatic shift in customers, distributors and shoppers,” Wolf says.
“The current standard would be yet another series of changes of technological trends such as in-real-life training and transactional learning that can evolve, but at an increased pace despite Covid-19. We can’t predict precisely how that will alter, however we know that customers will have different issues and desires that are perfect for creative approaches.”
Part of this modern path to creativity would therefore need to entail a change in the way brand communications are distributed. General Mills spokesman says the organisation has checked its media materials and moved from “advertisements that are already out of place with the present world to producing advertising that is more relevant within our new ‘standards’,” notes the spokesman.
Even though nothing’s been approved, the way in which General Mills introduces creativity in the long term could also dramatically change, the spokesman indicates. “We will assume that there is a possible situation that we will not have the same amount of fresh goods in an attempt to reduce the size of our plants and distributors.”
The parole of the moment seems to be ‘agility’ for many large food groups. “Our capacity to excel throughout this time is primarily attributed to our agility at scale,” says Kraft Heinz’s Young. “We’re adjusting our strategies and changing resources rapidly to integrate ourselves with new goals. We’re planning to keep on flexing that muscle in the long term on where and how we will innovate. As customers have found or rediscovered our great, iconic brands, we’re going to have an eye on how to activate their maximum potential.”
Consumers moving back to major known brands throughout the disease outbreak reported by most of the main food groups could indicate issues to top rank brands as international manufacturers look to concentrate more of their innovation efforts and assets on long-standing customer favourites.
“Our size gives us an edge focused on our internal expertise relative to rival brands that also depend on external specialists and services to develop design, production and manufacturing expertise,” says Young. “In the United U.S. and around the globe, we have massive state-of-the-art Research & development innovation facilities and good domestic expertise to help the end-to – end innovation activities.”
The spokesman for the opposition multinational FMCG behemoth (the spokesman didn’t want us to reveal the firm’s name) also claims that larger food companies are best positioned to leverage on the current trend if they reduce the longer product tail in order to be prepared to react more effectively to shifts in customer behaviour. “You’ve got to be able to change faster, do quick development and testing, and all of that stuff,” the spokesman begins to explain.
This will eventually be a restructuring of the innovation system, the spokesman continues, but at the present, while Covid-19 is now active and several countries do have limits on travel in effect, it is impossible to determine with some degree of precision whether that will all be accomplished.
“The major question is how customer behaviour is shifting and I’m not confident anybody is prepared to bet the house at this point over whether or not we would see a crucial changes in customer behaviour in the longer run,” said the spokesman. “Some food group executive directors said that they believe there will be a change in some industries in the coming years and that you really have some recognisable trends, including more home cooking, that could be a trend that stays.”
Hamish Renton, general manager of the UK Food and Drink Consultancy HRA Group, points out that the cooking-at-home movement is an established field for post-pandemic disruption, considering that it’s expected remote research could be one of the emerging standards in the outcome of the epidemic. “Over the mid to long term, we are expected to see more competition over food packages and semi-cooked items and potentially a step away from ‘prick and ding’ three-minute, microwave-style meals,” says Renton. “When they work from home, people tend to be able to invest more time eating in return for better flavour and interest.”
Snacking is yet another sector that can see a lot of post-pandemic NPD concentration from large food groups. “You’re inclined to see even more creativity in the well-being snacking segment because it’s something customers really want right now and it’s just as crucial for the progress,” says Mondelez’s Wolf. “We will see progress around the board because when, how and with whom customers eat are changing – you should continue to see developments in labelling, delivery and sale.”
A further trend that could last for a longer time and play a larger role in the future creativity plans of large food groups is the production of cheaper products. The Covid-19 pandemic is bound to trigger global downturn, with unemployment rising to greater levels.
“In emerging economies, developing markets and also in advanced countries, you may find certain citizens who are much worse off because of economic effects of this recession who are searching for more interest,” says the spokesman for the global FMCG Community. “And we may see producers have to make difficult decisions over the meat cuts they choose, or how they put less meat in a recipe and instead more veggies and more fillers.”
This might be too early to say what the current paradigm for broad food group innovation would look like in the post-pandemic environment, but the one aspect that seems fairly clear is that the epidemic would transform the way food corporations handle innovation.