Packaged Food Quarterly Statement Q2 2021

Key findings

The Q2 update gets a slight upgrade for the 2021-2025 outlook

Euromonitor’s 2021-2025 baseline forecast for the packaged food industry, published in February 2021, has been revised in line with the new macroeconomic update. Growth in demand for packaged food globally is projected to be more robust than expected. Packaged food volume is set to grow by 0.6% in 2021, an upgrade from 0.1% which was previously projected in the Q1 update in February 2021.

US packaged food sees the largest upgrade in Q2 as economy recovers

Retail packaged food in the US had the largest absolute revision in the Q2 update due to the faster than expected recovery of the US economy, helped in part by the efficacy of the country’s vaccination rollout, which has allowed economic activity to slowly resume back to normal. As the biggest market for packaged food in value terms, the US is the key market driving the upgrade adjustment globally.

Home dining continues to drive growth for packaged food

As lockdowns and limited mobility are extended towards 2021, consumers continued to consume more at home instead of dining out. Demand for categories such as rice, pasta and noodles and processed meat and seafood remained strong as cooking habits developed during the 2020 lockdowns persisted well over 2021.

Healthy food is a key focus among consumers, spurring innovation

Healthy living and plant-based alternatives are both consumer-driven trends that companies have been quick to tackle and adapt to, especially since the former is at the forefront of consumer concerns amidst the ongoing pandemic. Nonetheless, taste is king, and companies need to ensure that product offerings debunk the misconception that healthy foods only taste bland. The acquisition by Hershey of Lily's and Nestle's launch of pea milk alternative Wunda during Q2 are examples of manufacturers developing into these fast-growing trends.