One of the min affects that Covid-19 pandemic had on the food industry, was the fact that it has increased the market’s demand for at-home consumption. Now the important question is how US packaged-food companies can keep this demand high for the foreseeable future? In this article of Niorise we will answer this questions.
Five years ago, retail beverage and food sales all over the United States were dominated by foodservice sales and were projected to proceed to gain share until Covid-19 pandemic emerged.
Almost immediately, this pattern has changed as a result of the pandemic-related closure of restaurants and dining rooms and the complete closing of most other public dining places where you could eat away from home.
As per the US Department of Agriculture data, customers spent approximately 51 percent of their food and beverage money right-from-home in 2019. Present figures indicate that this trend has changed significantly since March, with about 70 percent of customers now spending their food and drink money in retail, resulting in a new pattern that sees more Americans baking and eating at home.
For many of these consumer packaged-food companies, particularly the big ones and also many smaller businesses, the change has been a blessing. The big issue for packaged-food firms, though, will be whether or not baking and eating at home is a simple short-term trend imposed by the pandemic on customers or whether it poses a longer-term shift in customer behavior.
Today, the jury is still out. The longer the pandemic will last, the more probable it is to be a longer-term change of attitude, on the one hand. That being said, because of both cooking exhaustion and the plain urge to restart one of their most fun daily culinary and social activities, there’s still pent-up demand amongst consumers to eat out.
More than half (55 percent) of customers are consuming more at home because of the Covid-19 pandemic, but not all are loving the shift in eating habits, as per a recent study based on survey results from US marketing and sales company Acosta. A quarter of customers are sick of making food and dining at home, Acosta’s study showed, while a third said they have found a new enthusiasm for cooking since the lockdown started.
Related research (ethnographic and also survey research) has been undertaken by the Hartman Group on the change of the consumer to preparation, cooking and consuming more meals at home. 41 percent of customers say they prepare even more meals directly at home, as per the company’s findings. In addition, 27% said they plan more of such meals ahead of time, and 20% said they are trying more new recipes than it has ever been. The Hartman Group concluded that customers are witnessing an extraordinary change in American society that would have enduring impacts on the culture of US food, transforming the social and individual perceptions of consumers in both large and focused forms, such as more food storage and home eating.
Where and how people eat is still evolving, but for packaged-food companies, the Covid-19-related paradigm change from customers eating away from home to at-home provides them with the best opportunity of their lifetime.
The change to cooking and dining at home was brought on by an unforeseen phenomenon instead of the purposeful actions of packaged food producers and grocery retailers. Yet packaged-food producers and retailers should draw on momentum by taking steps that can help make sure that the move is more a lasting change in customer behavior than a government-mandated flash in the pan.
Merchandise the meal
Consumers think of breakfast, lunch, dinner, snacks and meals instead of categories, that is how packaged-food companies and food retailers typically think of and plan stuff.
This continues to add to a gap amongst brands and customers. Seeking further and more ways to sell food to customers would make it much easier for them all to cook at home and help reduce cooking fatigue. Make it simple, speak their language, and attempt to connect brands to nutrition instead of to separate product categories.
Renewal of the recipes
The historic method of using recipe formation to establish and expand packaged-food companies has gone quite by the wayside over the years.
Renewed attempts to develop simple and fun recipes that make it simpler for people to prepare and eat at home would inspire customers to continue to do so.
Packaged-food businesses must become reliable allies in the preparation of home-cooked meals. Healthy recipes also have longevity, which provides an impressive ROI in marketing budgets for brands.
Collaborate with restaurant brands
This is not a modern phenomenon. Packaged-food firms have co-branded restaurant brands of different degrees of popularity for years – so this is something which needs to be used in different ways now.
People simply miss their beloved restaurant brands and offering them in grocery stores, for instance in the frozen food case, provides fresh chances in the new normal. For instance, restaurant chain Cinnabon has just launched a line of its iconic breakfast snacks and treats in the frozen food section at Walmart stores all over US and plans for national distribution beginning in the fall.
Collaborating with America’s favorite national and regional grocery and restaurant brands and introducing them to supermarket customers gives packaged-food companies today more options than they do in the past.
Romance the home meal
Food preparing and dining at home provides a variety of opportunities for families and society as a whole. Historically, making and preparing meals have become the subject of family activity; a place where conversation has taken place around a meal.
Cooking puts together individuals and communities in a variety of meaningful ways. Since cooking and eating at home have gone the opposite extreme over the last decades, households and culture on the whole have missed much of the harmony that a home-cooked meal offers in the kitchen.
Packaged-food firms will play a significant part in trying to bring this practice back to life in a meaningful manner and at the same time preserving consumer momentum. The options for ‘household meals’ are almost infinite and give packaged food producers the ability to play a larger position in the lives of customers, along with improved customer interest.
Keep price top-of-mind
Although eating and cooking at home is usually cheaper than dining out, the economic crisis caused by Covid-19 has an effect on what customers are buying to eat and cook at home.
We’re beginning to see a change to less-expensive supermarket products, in particular. packaged-food companies would need to keep a price line if they really want to continue capturing their share of food-at-home revenue growth.
Many customers will continue to pay premiums for some manufacturer products over private label brands as long as certain brands create value, but since we do not know how severe and lengthy the downturn will be, rates need to be a top-of-the-line concern even as buyers have turned to purchasing food at supermarket and cooking and dining at home. Private brands are a big threat, and restaurant dining halls won’t be closed indefinitely.
Prices can affect customer spending on companies. That will also change their level of dining out and eating at home as things get back to business as usual.
The change in sales momentum from food service to retail offers packaged food companies one of the biggest opportunities in decades. Before this year, the main goal for the sector and companies was to stem the steady growth in food-away-from-home sales. The Covid-19 pandemic has shifted the target in just about 6 months.
The target now for packaged-food companies is to continue the eat-at-home movement and the rise in retail revenue that comes with it. It might only be a once in a century experience.