The rate of change of consumer behavior is accelerating: Here’s what to expect

The rate of change of consumer behavior is accelerating: Here’s what to expect
Photo - pch.vector

The Covid-19 pandemic has had a profound impact on nearly every business sector. But perhaps one of the most affected has been the food and beverage industry. Consumers went from dining out to ordering in, from purchasing ingredients at their neighborhood grocery to subscribing to online delivery services. More concerned than ever about their health, families turned their focus to fresh, natural foods derived from local growers and were willing to switch to different brands to meet their newly adopted standards.

Indeed, the food and beverage landscape has changed dramatically over the past few years, and even with the height of the pandemic behind us, consumer behaviors remain in flux. Rising inflation, record-low consumer confidence, supply chain issues and other factors keep the pendulum swinging and the food and beverage industry guessing as to what’s next.

What will resonate with consumers going forward? Purchasing only the bare essentials? Products that promote fast, easy preparation? Family-style meals or single-serving portions? It’s a challenging time for the food and beverage industry as businesses strive to keep pace with ever-changing consumer mindsets over products, packaging, purchasing, and general consumption practices.

The challenges over the past few years have forever reshaped what consumers want, demand, and expect from food and beverage providers. A recent survey from McKinsey found that nearly 80% of the consumer-packaged goods (CPG) executives who responded said they believed the pandemic would have a lasting impact on their customers’ needs over the next five years. The time is ripe for the industry to refocus, reimagine, and reap the rewards of catering to a new breed of consumer. Despite the uncertainty, a few common themes have emerged, giving food and beverage brands a basis for building future strategies.

Consumers are back to living their daily lives, many with a renewed focus on their health. Naturally, they’re gravitating toward products and services that empower them with the confidence to make intelligent buying decisions. More time is spent reading labels, comparing packaging, and buying from companies with strong nutritional backing. Grocery lists are filling up with foods and beverages that claim to boost mood, increase energy or strengthen brain health. Demand for such functional food accelerated during the pandemic, but the trend is here to stay. Research and Markets estimates that the global functional beverage market alone will be worth $158.3 billion in 2023.

Trends show that an increasing number of grocery purchases, functional or not, will be made outside the grocery store. Foot traffic fell drastically in the pandemic’s early stages, while online grocery sales surged 300%. That number has leveled out these days, but online ordering remains a key business strategy.

In response, some companies are experimenting with “direct-to-consumer” models that cut out F&B retailers. One such example is F&B giant Heinz. During the pandemic, the company launched its new DTC business model, Heinz to Home. The new service, deployed in just three weeks, made it possible for customers who wanted to limit grocery store visits to order pantry items directly through the Heinz to Home website. It was a big hit. The DTC model allows food and beverage manufacturers to build direct relationships with customers to get more data and insights and thus more effectively learn what they want, and pivot if necessary.

Whatever way consumers purchase their food, it needs to be cooked at home, and for many months, that was the primary option. Unable to dine out, consumers were forced to cook more, and some began to enjoy it. This trend continues as consumers seek out food and beverages that inspire creativity, entertainment, and interaction with friends and family. With cooking becoming more accepted as a social activity and entertaining at home growing in popularity, consumers will pay a premium for products that enhance these experiences. Food and beverage providers that typically supply goods to restaurants could benefit from retooling their offerings to fit the needs of home cooks.

The pandemic will have lasting effects on the F&B industry. So now, more than ever, insight into consumer behavior is crucial to stay on pace with ever-shifting consumer F&B trends, fuel innovation, and exploit new business opportunities. A rich repository of information about consumer needs, wants and expectations stored on one unified software platform that’s easily accessible to stakeholders and employees can help the F&B industry remain nimble and lucrative for years to come.

Author - Thor Olof Philogène, chief executive officer and co-founder at Stravito

Related Stories

No stories found.