Staple foods remains a highly fragmented industry worldwide. The top players are losing market share as smaller brands innovate in plant-based, healthy alternatives, and private label improves in quality. Some leading companies will benefit from their existing portfolios due to shifts in eating occasions; however, they need to follow ongoing trends to retain or gain share. Growth for the leaders is currently coming mainly from expansion in emerging markets, as well as mergers and acquisitions.
Staple foods remains a highly fragmented market worldwide, and is becoming even more so. Top players are losing share to smaller brands that focus on sustainability and health trends, and to private label, which offers appealing prices in an era of high price sensitivity. The top players are deriving growth from market momentum, aided by pandemic stockpiling and (lasting) habits, mergers and acquisitions, and expansion in emerging markets.
Due to the pandemic-induced concern over improving health, consumers have actively sought out healthier staple foods. Introducing healthy variants of well-established existing item, or launching novel products, is a route to success, with opportunities in targeting children and the elderly population. The focus is on reduced salt, sugar, and fat content, with brands like Kellogg and Barilla putting this at the forefront of their new product development.
Growth in the number of vegan, vegetarian and flexitarian consumers, increasing concern with the meat industry’s impact on the environment, and manufacturers’ need to set their products apart from those of competitors are creating a greater emphasis on plant-based alternatives. For many brands, this is an opportunity to battle stagnant or declining markets and to break into new product categories. Companies such as WH Group and Kraft Heinz recognise the potential here and are actively introducing plant-based products to their portfolios.
The COVID-19 pandemic increased demand for convenience, and brands are seeking ways to get closer to the consumer. The habit of shopping through the e-commerce channel, which many consumers acquired during the pandemic, is here to stay – especially in shelf stable foods. Investing in data, technologies and agile approaches to optimise business will help determine effective marketing strategies and reduce the risk of supply chain bottlenecks.
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