Article appeared in issue 3, 2020

New and improved

Fiona Sweeney, strategic marketing director at Kerry, shares how the organisation's Covid-19 insight task force has revealed interesting conclusions around consumer trends and behaviours in a vastly different and ever-changing food and beverage environment
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The Covid-19 insight task force is a team of people dedicated to following the Covid-19 pandemic and its impact on the food and beverage industry, primarily so that we can stay agile and help our customers respond to an evolving landscape, and to understand how we plan for the future.

We found that the impact of the Covid-19 pandemic has been far reaching and the socioeconomic change and disruption have been immense, equally so in the food and beverage industry. We believe that the long-term implications and impact of change in the food and beverage industry will come from the acceleration of existing and underlying trends, or the manifestation or shift in the manifestation of these trends, rather than anything brand new. 

For example, the focus on health and wellness, clean label, food safety and trust, digital adoption, sustainability, plant-based food: all of these are existing trends that will manifest slightly differently or speed up as a result of the pandemic.

Producer action

There are so many changes that customers need to act on, and so many areas of consideration. The obvious one is food safety and food trust. We know consumers want products that have ingredients that they can understand, that they recognise. They are looking to understand more about where their food comes from and who makes it and they are willing to pay for local ingredients –this trend is already there.

When you take the Covid-19 pandemic and add that on top, there is a heightened sensitivity now for consumers around the safety of their food. They want to know more about provenance, they will seek out claims where there is that reassurance of trust. For customers and producers in the food and beverage industry, accelerating their programmes towards cleaner and clearer labels is going to be really important.

Plant-based foods are already accelerating in terms of their growth because consumers are looking for products that will help them to maintain a healthier lifestyle but also products that are kinder to the environment, and kinder from an animal-welfare perspective. We expect the Covid pandemic will lead to an acceleration of consumers considering a flexitarian or vegetarian lifestyle. Consider how you might build a plant-based product into your portfolio.

 

Innovations in foodservice

The foodservice industry has been amongst the hardest hit within total food and beverage. We’re seeing anything from 60-95 per cent decline in foodservice in Europe. We have seen behaviour shifts of customers trying to adapt to maintain revenue, shifting from dine in to home delivery but this revenue is not enough to make up for the loss. 

Moving towards when lockdown restrictions are eased further, there is hope that we can get consumers moving into the foodservice space again. But when you look at areas where restrictions have been lifted, like China, consumers are still reluctant to go back to the behaviours in foodservice that they once had: there is still an insecurity around their own health and wellness, but there is also uncertainty around economic conditions. We have entered a global recession so consumers have less disposable income. What we do know is that consumers are cooking, experimenting more at home and there are lots of fresh ingredients being bought in retail.

We’ve also seen from the research that there is a little bit of fatigue creeping in but it’s mostly around tidying up afterwards – we love to cook, but not necessarily to clean the pots! There are some clever operators responding with ‘finish-from-home kits’: they provide you with ingredients and partially cooked food, and you finish it off at home so you get the enjoyment of cooking but not the cleaning up. There is some really interesting innovation taking place within the foodservice sector to help meet these growing consumer demands for an out-of-home experience in their own home. 

There is obviously the adoption of home delivery and the acceleration of home delivery that needs to be considered. As consumers have become used to home delivery and contactless, there is evidence to say that this is not going to fall away, it is a new captive audience that the foodservice operators have to market to. There has to be a greater emphasis on the development of products that are delivery stable: holding times and delivery times impact the taste, texture and quality of your products, so it is important for an out-of-home operator to understand and plan for this.

Culinary trends, ingredients and cooking techniques from across the Asia Pacific region are now influencing global markets, and taking note of them can help businesses to capture consumer interest and future-proof their product lines. Here are some highlights from Kerry’s local consumer insights and market research teams.

 

Plant-based products can grow more, if the price is right

The plant-based trend has gone beyond just meat alternatives, with ice creams, protein bars and even cookie dough now on offer. While demand seems to be on the rise, there is still variation between and within markets, especially when it comes to market maturity and price points.

 

Fruit-flavored and functional beverages are gaining ground

There has been an emergence of fruit-flavored beverages, fermented beverages and beverages with natural and functional ingredients such as probiotics. 

 

Health and wellness continue to drive consumer preference

Consumers in the Asia Pacific region are now focusing on holistic health in addition to physical health, and there is a growing desire for more natural forms of health and wellness delivered through diet, exercise and general lifestyle.

 

Environmentally friendly is the way to go

Asia is a hotspot for plastic pollution, and given the often visible environmental degradation, many feel an urgent need to reduce the risk they personally face from the environment, such as air pollution, water pollution, landfills and soil contamination. How food is produced and processed is gaining prominence in consumers’ minds, and there is a blurring of the lines between health and environmental concerns.