The food industry is changing. A few decades ago, supermarkets reigned supreme, but with standards of living on the rise and a new generation of consumers now dominating the marketplace, this is no longer the case.
Cooking meals yourself and eating it is no longer a necessity. More and more people can now afford luxuries like eating out and ordering in. This had led to several new trends in customer behavior when it comes to food shopping – trends which food retailers must take note of if they want to stay relevant (and profitable) in 2018.
To help you to keep up with this changing marketplace, we’ve prepared a list of 5 things customers want from their food shopping experience now and for the foreseeable future.
1. Fresher & Healthier Foods
One indisputable trend we’re currently seeing is the switch towards fresher, healthier foods. Customers are now more aware of the health benefits of the foods they consume and are actively looking for these kinds of foods.
This is causing problems for many retailers. Kellogs, for example (the brand responsible for Frosties and other well-known cereals), saw a decline of 2.5% in their second-quarter sales which was attributed to the shift in consumer demand for healthier and fresher foods. And it seems no retailer – no matter how large or successful – is immune from these effects, as sales dips were also reported by other huge-name brands like Kraft Heinz.
However, there are also lots of retailers benefiting from this switch. Retailers which sell fresh, organic and healthy food items are seeing increases in sales across the board. The upshot of this is clear: give your customer a fresh, healthy option.
2. Vegan/Vegetarian Options
A second trend we’re seeing is an increase in the level of consumer demand for vegan/vegetarian food options. You need only look at some of the Netflix documentaries trending at the moment to see this – shows like Cowspiracy and Okja are sweeping through the nation, turning more and more people towards veganism.
In fact, if you look at the statistics, the scale is staggering. 600% as many people now identify as a vegan in the US than was the case 3 years ago, according to research by Global Data. And it’s not just confined to the US, there are 350% more vegans in the UK now than there were a decade ago, according to another recent study.
Even those that don’t turn to veganism for ethical reasons still buy similar products, as many consumers are now adopting for plant-based diets on account of the increasing awareness of their health benefits. Even the biggest food retailers are acknowledging this trend. Just Eat, for example, noted a 94% increase in the amount of healthy food that was ordered on their platform, and therefore acknowledged veganism as a top trend for 2018.
Whilst veganism was historically treated as a fad and often cast in a negative light by the mainstream media, global attitudes are now switching, and it looks like, this time, the trend is here to stay.
Businesses offering plant-based diets can therefore now expect to see greater demand for their products as their target market expands, and food retailers should expect the vegan and plant-based meal market to expand even further in the years to come.
3. Eating Out
It seems that dining in is out, and dining out is in (confusing, I know). Last year, for the first time ever, dine-out sales actually surpassed grocery sales.
This trend of more customers eating out has largely been driven by younger consumers, who value convenience over expense. This spells out good news for restaurants and bad news for grocery stores, but only if they don’t adapt to this change and start offering consumers a dining-in option.
Many retailers are already doing this and seeing great results. Supermarket chain H-E-B, for example, opted to add a fast-casual eatery in their newly-opened store in Houston.
4. Online Shopping
We’re now truly immersed in the digital age. Consumers everywhere are spending more and more time online. Customers now do pretty much everything digitally – their socializing, their dating, and – most importantly for retailers – their shopping.
Again, the data here is mind-blowing. In just over one year, the number of US citizens doing their grocery shopping online has doubled. 50% of Americans now buy all their grocery products online, according to studies by both Nielson and the Food Market Institute.
This is even higher amongst millennials, 61% of whom buy their groceries online. This suggests that this trend will continue to increase for decades to come as millennials and subsequent generations make up an even greater portion of the consumer marketplace.
To adapt to this trend, all food retailers should now have an online presence, and ideally an online sales channel too. Retailers specializing in the home-delivery market can expect to benefit most from this trend. Online meal-prep delivery services, for example, are becoming more and more popular. They allow customers an easy, convenient way to eat at home without having to cook or buy ingredients – and these are things that millennials want.
Organic plant-based meal delivery services, specifically, are proving to be hugely popular as they are capitalizing on not one, but three of the consumer trends we have mentioned so far. They offer fresh and healthy food options that align with the values of a huge number of millennial customers.
The main takeaway from all of this is that, if you’re a food retailer in 2018, and you’re interested in offering customers the best possible experience, you may need to change your business model.
It doesn’t have to mean completely uprooting your business model. No one is suggesting that grocery stores should close shop and go completely digital, for example. There is still a lot of the same demand that there used to be – in-store shopping isn’t dead just yet. Similarly, the majority of your customers will still want meat, and many won’t be fussed about organic or fresh produce.
However, to have all your bases covered, it’s worth diversifying. If you’re an offline retailer, consider offering a delivery service too, and if you don’t stock a lot of fresh, organic, or plant-based products – start stocking some.