Healthier Indulgence, Convenience, Flavor Innovation, Sustainability, & E-Commerce Are Among the Factors Propelling Retail Food Sales Forward
Sales spiked significantly in 2020 (+14% from 2019 levels) due to the impact of the coronavirus, according to the update of Packaged Facts’ benchmark coverage of retail food sales in Food Market Outlook 2021: Grocery Shopping, Home Cooking, & Food Preferences in the Waning Pandemic Period.
Consumers sharply curtailed dining out or using school cafeterias and instead did more grocery shopping to prepare and eat most meals and snacks at home. Going forward, retail grocery sales are projected to increase at a significantly lower rate in 2021 from this high base as Americans receive vaccinations and much of the country reopens to more normal activities, including eating at restaurants and cafeterias, by mid-year.
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Pandemic-induced eating at home revived dormant and declining food categories and boosted sales of those that had been growing. Americans ate unprecedented amounts of food at home the past year and a half for breakfast, lunch, dinner, and snacks. Best-selling food categories in 2020 and into 2021 reflected these trends and included products that could be stockpiled and stored and meal and/or snack preparation items.
Food Market Outlook 2021: Grocery Shopping, Home Cooking, & Food Preferences in the Waning Pandemic Period analyzes and highlights near-term factors in the context of overall industry development and long-term consumer preferences and behaviors as well as marketing and product development innovations.
Actionable insights are available as this report considers COVID-related behaviors in the pandemic and beyond. Marketers will be challenged over the next few years to sustain growth after record-setting sales in 2020. Those rapid gains were unprecedented, short-term, and will not be repeated. Headwinds to overcome and innovate through 2021 include the resurgence of out-of-home consumption, continuing supply challenges, and the mostly mature nature and slow growth of most food categories. Rising food prices may limit volume sales to a degree, but they will aid retail growth in value terms. The rise of the Delta variant and the threat of future variants, plus a stall in vaccination rates complicates sales projections for 2021 and beyond.
The extraordinary impact of the crisis changed consumer behavior significantly, accelerating the manifestation of many of them. Several trends in the food industry will gain even further traction in 2021 and beyond, including plant-forward, lab-created/cultured protein alternatives, better-for-you products, healthier indulgences, restaurant quality at home, sustainable packaging solutions, and evolutions in online sales and distribution.
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