This briefing provides updates on the 2020 – 2024 quarterly forecasts for the Packaged Food industry, sources from Euromonitor International’s Packaged Food Forecast Model for Q3 2020. It has been reviewed combining the effect of macroeconomics measures and of multiple soft drivers, all specific to regions and categories.
This report comes in PPT.
As a result of the numerous lockdowns that took place all around the globe in the first half of 2020, many businesses have struggled to keep up-float and subsequently the rate of unemployment has increased across the regions since 2019. With household revenue decreasing, consumers tend to focus on basic needs and at-home consumption turning their choices to affordable and trusted brands. For example, Campbell Soup Company has reported a 7% in full-year net sales in 2020.
The general insecurities around being in public places amid COVID-19 along with the “new normal”, yet atypical to a modern consumer, of social distancing queueing measures when entering physical retail, has pushed consumers towards e-commerce platforms. The convenience of online shopping and home delivery is also supported by investments in online platforms from retailers, making the rise of e-commerce a sticking trend for the foreseeable future. For example, in the UK as its contract with Ocado ended, Waitrose has opened its own e-commerce platform, while M&S is replacing Waitrose on the Ocado website.
As lower income levels depress consumer confidence, the long-standing premiumisation trend in foods, particularly snacks, may be challenged. However as the first post-pandemic months reveal, consumers are looking for products that could boost their immune systems. In Asia Pacific, most of the countries will trust functional products made from artificial ingredients whereas in Western Europe natural ingredients-based products are thriving.
Discounters and private label are expected to benefit within the post-pandemic era, as demand for value for money grows, and flexible and highly localised supply chain allows them to tailor their offering rapidly. Moreover, with online sales growing, retailers control brands’ SEO on their platforms and can promote private label across the categories.
In packaged food we consider two aspects of food sales: 1) Retail sales. 2) Foodservice. Retail sales is defined as sales through establishments primarily engaged in the sale of fresh, packaged and prepared foods for home preparation and consumption. This excludes hotels, restaurant, cafés, duty free sales and institutional sales (canteens, prisons/jails, hospitals, army, etc). Our retail definition EXCLUDES the purchase of food products from foodservice outlets for consumption off-premises, eg impulse confectionery bought from counters of cafés/bars. This falls under foodservice sales. For foodservice, we capture all sales to foodservice outlets, regardless of whether the products are eventually consumed on-premise or off-premise. Foodservice sales is defined as sales to consumer foodservice outlets that serve the general public in a non-captive environment. Outlets include cafés/bars, FSR (full-service restaurants), fast food, 100% home delivery/takeaway, self-service cafeterias and street stalls/kiosks. Sales to semicaptive foodservice outlets are also included. This describes outlets located in leisure, travel and retail environments. 1) Retail refers to units located in retail outlets such as department stores, shopping malls, shopping centres, super/hypermarkets etc. 2) Leisure refers to units located in leisure establishments such as museums, health clubs, cinemas, theatres, theme parks and sports stadiums. 3) Travel refers to units located in based in airports, rail stations, coach stations, motorway service stations offering gas facilities etc. Beyond the scope of the foodservice research are captive foodservice units that serve captive populations around institutions such as hospitals, schools, and prisons. This is also known as institutional sales.
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