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.
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.
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 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 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.
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.
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