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Where Consumers Shop for Packaged Food

January 2021

During the Coronavirus pandemic, distribution channels in packaged food have been significantly affected. Consumers sought convenient channels to purchase essential food in 2020. As a result, e-commerce thrived by meeting consumers’ needs such as safely delivering chilled fresh food on time. The distribution channel landscape in packaged food is expected to show dramatic change over the forecast period as e-commerce continues its rapid development.

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Key Findings

Closure of away-from-home channels affects overall packaged food market and distribution channels

Packaged food recorded strong performance in 2020 due to shutdown of the foodservice channel, thus consumers stockpiled food and shifted to cooking at home during the lockdown period. The new normal in terms of eating changed where consumers shop for packaged food.

Consumers prefer larger baskets in store-based channels, benefiting large-scale grocery retailers

Store-based grocery retailers saw share growth, but hypermarkets and warehouse clubs which specialise in larger baskets showed better performance than convenience stores and food specialists. Impulse purchasing of single-portion products - mainly distributed via small-sized grocery retailers - was significantly affected because consumers are unable to eat on-the-go formats during the pandemic.

E-commerce outperforms well ahead of previous expectations

E-commerce in packaged food recorded dramatic growth during the pandemic as contactless shopping is preferred. Consumers were unable go out during lockdowns, so placing orders for products online and receiving them through home delivery become a new facet of normal life.

Alibaba and Amazon further expand their influence in global e-commerce market

Alibaba Group Holding maintained its position as the leading company in global e-commerce with eight brands by responding quickly to emergency situations, for example providing Taobao Live for free to merchants, and expanded its influence. Amazon also expanded its brand equity as a global e-commerce leader in 2020.

Post-pandemic, packaged food sales will return to normal, but the shift to e-commerce will remain

Total packaged food sales are expected to temporarily decline in 2021 as consumers return to dining out as the Coronavirus (COVID-19) pandemic eases. In the following years, the market will be stable with modest growth. E-commerce, however, will continue to benefit as consumers realise the benefits of shopping online.


Key findings

Industry Snapshot

Packaged food soars in 2020 due to shifting eating occasions
Convenience is key consideration when shopping food for home cooking
Shifting eating occasions drive packaged food to positive growth

Channel Shifts

Shifting eating occasions lead to healthy growth in both channels
Surge in e-commerce across all categories, Asia leads the trend
Surge in online sales of snacks during COVID-19 pandemic

Store-based Channels

Preferences for larger pack size affect store-based grocery retailing
Value for money helps discounters shine during the pandemic
Food specialists less important in developing regions
Stockpiling benefits sales at modern grocery retailers
Convenience-focused retailers lose share during lockdowns
Private label in ready meals and staples focuses on easy cooking trends
Channel shifts and value for money help private label thrive in 2020

Non-store Channels

E-commerce becomes de facto option during lockdowns in 2020
Contactless distribution becomes core strategy in pandemic
Food e-commerce soars as the most feasible option during the pandemic
LATAM e-commerce growth soars with quick response to lockdowns
Alibaba company leads e-commerce, Amazon has stronger brand power

Future Developments

As the pandemic subsides, consumers will return to dining out in 2021
Contactless purchasing habits in packaged food will continue
Key takeaways


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