Sales of cooking ingredients and meals are dominated by store-based retailing, driven by the developments of modern grocery retailers globally. E-commerce is, however, thriving, with increasing acceptance by younger generations and the emergence of digitally-driven business models, such as meal kit subscriptions. This report delves into the performance of different channels for sales of cooking ingredients and meals, and analyses retailers’ activities.
Fuelled by COVID-19, an increase in eating at home occasions, at the expense of foodservice, has been the main driver of industry growth. While some degree of normality has returned post-COVID-19, and foodservice is back again, circumstances such as the wide acceptance of remote/hybrid working, especially in developed countries, is working in favour of the industry’s performance by leading consumers to cook more at home.
Consumers are increasingly seeking convenience. In that context, ready meals targeting different tastes and diets, such as vegan, are playing a substantial role in the positive performance of the industry. It is a category in which both brand owners and private label are investing heavily to capitalise on the high margins.
As the modern grocery channel develops in both developed and developing markets, store-based retailing generates the majority of industry sales, with supermarkets being at the forefront. Independent small grocers, on the other hand, is the most dynamic store-based retailing channel, driven by its strong presence in developing markets, where modern grocery is less well-established.
Having been hit by COVID-19, convenience store sales are picking up as consumers make more store visits, especially those who have returned to their offices for work. In addition to this, an increasing number of convenience stores are modernising and leveraging technology to improve the in-store shopping experience. They are also partnering with digital platforms offering rapid delivery, which offers the convenience consumers are increasingly seeking.
While sales are dominated by store-based retailing, e-commerce is the most dynamic channel within the industry. The emergence of new business models with technology as the core element, such as recipe boxes offering restaurant-style meals, and direct-to-consumer (DTC) sales, is one of the key contributors to the rise of e-commerce.
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