Packaged Food: Quarterly Statement Q4 2021

December 2021

This briefing provides updates on Euromonitor’s December 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

Packaged food sees upgrade in sales forecasts

The packaged food industry overall benefited from a slight upgrade in GDP in the last quarter of 2021. As many countries got a respite from the spread of COVID-19, upwards revisions to GDP forecasts played in favour of sales of snacks and dairy globally.

Supply chain disruptions and inflation signal a more difficult start to 2022

The ongoing pandemic has caused major supply chain disruptions in packaged food, in turn leading to spikes in commodity and ingredient prices, and thus higher inflation in the last quarter. Bread, pasta, cereals and milk are among the most exposed categories. Whilst food businesses have absorbed much of the pressure, retail price increases are expected to be more evident in 2022.

Re-opening of out-of-home channels boosts snacks…

Coupled with the positive effect of major vaccination programmes on consumer confidence, the re-opening of many cafés, restaurants and impulse channels in summer 2021 boosted packaged food sales growth. Snacks particularly benefited, with, for example, out-of-home ice cream consumption resuming in India.

…whilst momentum slows for at-home cooking

After several major lockdown periods, sales growth of cooking ingredients slowed and were downgraded, as the trend for at-home cooking waned. This played in favour of meal kits, which were upgraded, with many consumers not yet able or ready to eat out and preferring to treat themselves with an easy, high-quality experience at home.

Slight overall upgrade for dairy, but challenges remain

GDP upgrades have generally had a minor positive impact on dairy and dairy product alternatives. More M&A activity and innovation are pushing sales expansion for yoghurt and drinking milk products in Asia Pacific. However, the complex dairy supply chain and the industry’s reliance on milk, and rising cereal prices for dairy alternatives indicate new challenges in early 2022.


Key findings

Q4 Packaged Food Update

Snacks market in Q4 shows better outlook than previously forecast
Enhanced COVID-19 management impacts snack sales forecasts
New implementation date for the HFSS regulation in the UK
Healthy and on-the-go snacks re-emerge: Example of Australasia
Increased purchasing power benefits higher margin dairy categories
Highly regarded nutritional benefits drive yoghurt forecast in Indonesia
Cooking ingredients display signs of cooking fatigue…
…with dinner mixes benefiting from this change

Q4 Packaged Food Update?

Meat alternatives seeing strong growth in the US
Lingering supply disruptions and inflation will push food prices up
Discussion of key long-term drivers
Conclusions/takeaways from this quarter

Q4 2021 Macroeconomic Update

Delta variant and supply constraints tempered economic recovery
Forecast risks remain tilted to the downside
Real GDP annual growth forecasts and revisions from last quarter, AE
Real GDP annual growth forecasts and revisions from last quarter, EMDE

About Our Industry Forecast Model

About Euromonitor International’s Macro Model
Euromonitor International and COVID-19: Forecasts and analysis
Industry Forecast Model : Hard versus soft drivers
Packaged food data and reporting timeline

Packaged Food

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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