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Vitafoods 2020: “Longer-lasting” shifts from foodservice to retail and e-commerce, key COVID-19 impa

foodingredientsfirst 2020-09-08
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The Vitafoods Virtual Expo has kicked off, spearheading the event with a seminar on the impact of COVID-19 on the F&B landscape in North and South America. A “new type of consumer” is emerging, according to presenters from Barclays. Meanwhile, accelerated e-commerce may require refreshed marketing and merchandising models for well established and smaller businesses alike. But while this might be seen as a demand driver, affordability in emerging markets may make it harder for brands to shine in a similar way.

“We’ve been looking into different consumer surveys while running our own consumer surveys to understand wher shoppers’ mindset is heading. Roughly 40 percent of the respondents said that they would like to become more mindful of wher they spend their money,” says Benjamin Theurer, Director at Barclays.

“20 percent of respondents still said that they would like to continually increase researching brand and product choices before actually buying, so clearly theres a lot of behavioral changes habits and preferences have been changing.”

Even after business reopenings in the US, consumer confidence continues to stagnate at ‘fairly depressed levels” compared to the beginning of the year. “In Brazil, clearly, it’s down still from the levels of wher it was at the beginning of the year. But theres clearly an uptake when it comes to Brazilian consumer confidence versus the US consumer confidence,” Theurer details.

Grocery e-commerce uptick
Grocery stores may no longer offer free edible samples and consumers may shift away from deli and prepared foods, Barclays forecasts. This is key because free sampling has historically been a traffic driver and deli and prepared foods are higher margin. When dining out, consumers may prefer off-premise dining. Quick service restaurants already had more than 80 percent of sales from off-premise dining.

Longer lasting shifts from foodservice to retail and e-commerce
As sweeping quarantine lockdowns have clamped down on out-of-home purchases, e-commerce has been gaining share, particularly within the retail space. “There were certain areas wher it’s still slightly behind, maybe on the food and beverage delivery side on the pickup opportunities,” notes Theurer.

Barclays research flags a longer lasting shift from foodservice to retail. “Weve looked into [e-commerce] and tried to understand  how it looks in [the context of] food and beverages. The interesting thing to see that there is actually a minor acceleration on a quarter-over-quarter basis in the first quarter. While penetration is still relatively low in food and beverage ecommerce, we’ve seen an acceleration trend here on a sequential basis,” explains Theurer.

Indeed, corporations have been actively injecting capital into scaling up their in-house delivery activities. For instance, meat alternatives heavyweight Impossible Foods recently launched a new e-commerce site for its US consumers to purchase family-size quantities of the plant-based Impossible Burger.

In March, a new virtual “in store” concept by LifeStyles in 360 debuted, allowing consumers to shop from their homes thanks to virtual reality technology, paired with a white-glove delivery service.

Meanwhile, the cash shift to digital wallets or to card payments are something particularly interest in Latin America wher “cash is still king,” notes Theurer.

“A lot of transactions are actually happening with physical cash and not so much with credit cards debit cards, and even less with digital payment methods so clearly thats something likely going to be accelerated in the near future,” he concludes.

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