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Packaged Food: Quarterly Statement Q1 2021

March 2021

This briefing provides updates on Euromonitor’s March 2021 forecast restatement for the packaged food industry, deciphering how the industry is navigating the pandemic, changes from baseline projections and highlighting future risks and opportunities.

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Key findings

The Q1 update remains fairly consistent for the 2021-2025 outlook

Euromonitor’s 2021-2025 baseline forecast for the packaged food industry, published in October 2020, has been revised in line with the new macroeconomic update. The global industry forecast over the next five years remains largely in line with initial expectations, albeit a slight CAGR downgrade of -0.1pp between 2020 and 2025.

Milk formula sees the largest upgrade while savoury snacks sees the most substantial downgrade in Q1

Category-wise, milk formula has recorded the largest forecast upgrade this quarter, mainly driven by Hong Kong, given the better forecast recovery than expected as cross-border activities with mainland China reopen. In terms of downgrades, savoury snacks has recorded the biggest change. The US and India are the key markets driving this adjustment.

Convenient meal solutions show strong potential ahead

The increase in home-cooking seen during 2020 is expected to be maintained in the coming years to some degree, which is set to benefit cooking aids such as sauces, dressings and condiments. Convenience is king though, and ready meals and convenient meal solutions have a bright future ahead. Investments by strongholds in the industry, such as Nestlé in DTC meal kits and prepared meal businesses, shows the interest in this space.

Innovation in health, plant-based and e-commerce to shape the future of the packaged food industry

Consumers are increasingly demanding targeted functionality as a key component of wellbeing, which is set to continue to benefit functional foods, with a key focus on immunity, gut health and mood-enhancement. Plant-based trends will also continue to disrupt the packaged food industry, spurring innovation across categories.

Together with this, e-commerce is accelerating at an all-time rate, and food players are prioritising this channel at the top of their corporate strategies, including DTC models and partnerships with third-party delivery businesses.

 

Introduction

Scope
Key findings

Q1 Packaged food Update

Packaged food Q1 update: methodology
Industry Forecast Model : hard vs soft drivers
Slight downgrades for the packaged food forecast during Q1
LATAM and MEA are upgraded while downgrades seen everywhere else
A better outlook for infant milk formula in Hong Kong
Largest upgrades and downgrades for milk formula and savoury snacks
Chilled ready meals: a brighter recovery in Japan
Nestlé strengthens its presence in the DTC meal solutions space
Impulse occasions face slower recovery as lockdowns extend over 2021
Health and plant-based trends drive M&A activity in Q1
The unstoppable rise of e-commerce in the food industry is here to stay
Packaged food outlook in a nutshell
Long-term discussion of key drivers

Q1 Macroeconomic Update

Global baseline outlook: Downside risks to recovery have declined
Uncertainty remains high, but with a more optimistic tilt
Real GDP annual growth forecasts and revisions from last quarter, AE (%, percentage points)
Real GDP annual growth forecasts and revisions from last quarter, EMDE (%, percentage points)
COVID-19 scenarios summary

About our Industry Forecast Model

Euromonitor International and COVID-19: forecasts and analysis
Packaged food data and reporting timeline
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