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Packaged Food: Quarterly Statement Q3 2020

September 2020

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.

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Key findings

Despite short-term wins in retail, packaged food is set to see longer-term decline in consumer confidence

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.

E-commerce to continue strong growth over the forecast period

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.

If premiumisation is expected to slow down, functional food should still appeal

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.

Private label and discounters expected to lead market growth

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.

 

Introduction

Scope

introduction

Euromonitor International and Coronavirus: Forecasts and analysis
Packaged food COVID-19 data and reporting timeline
Key findings

Q3 Macroeconomic Update

Global economy will contract sharply in 2020
In our baseline view, the pandemic slows in the second half of 2020
Three scenarios examining the impact of a more severe outbreak
Our view in short
Forecast real GDP growth in 2020 under different scenarios

Q3 Packaged food Update

Q3 forecast update expects slightly slower recovery than baseline
Downgrade of 2020 results and slower recovery predicted across regions
India is facing the biggest downgrade in Q3 but remains highly competitive
Overall positive story of packaged food continues from Q2 to Q3
Resilience from PK players to adapt to supply chain disruption over Q3
Routes to disruption in packaged food in 2020
S oft drivers: how we quantify these COVID-19-specific effects in the IFM
Forecast prices for snack bars affected by competition in Western Europe
Chinese players overtake global players in milk formula
Packaged food’s shift towards e-commerce continues over Q3
Factors to watch for the remainder of 2020
Long term: price and soft drivers are the main threats

About our Industry Forecast Model

About Euromonitor International’s Industry Forecast Model
Soft drivers and the Industry Forecast Model
Growth decomposition explained
Significance and applications for growth decomposition
Key applications for the Industry Forecast Model
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