FMI – The Food Industry Association and NielsenIQ have jointly issued their 2021 industry forecast for online food and beverage sales at the ongoing virtual FMI Midwinter Executive Conference. Among the findings outlined in the presentation: A solid contingent of grocery shoppers are likely to continue their digital shopping habits more than they did before the pandemic.
Factors that grocers need to consider in regard to future grocery shopper behavior include economic recovery, consumer confidence and the pace of the COVID-19 vaccine rollout. Public-health officials continue to endorse mask requirements, physical-distancing measures and regular hand hygiene even after vaccination, which could also prolong shoppers’ pandemic shopping behaviors.
NielsenIQ reporting of the 2020 total, online food and beverage landscape was as follows:
- The total online food and beverage landscape in 2020 saw $106 billion in dollar sales, a 125% increase in growth from the prior year.
- In 2020, consumers spent $66 billion on online CPG food and beverages, and $40 billion on restaurant delivery.
- Traditional CPG food and beverage was the No. 1 driving force behind the explosive e-commerce growth in 2020, accounting for 44% of sales and overtaking health and beauty as the leader of online sales.
- Nearly one year into the pandemic, online food and beverage sales remain at an elevated level, with monthly average sales about $3 billion dollars higher than in 2019.
According to the FMI/NielsenIQ research, three principles that sustained online growth during this period were the rapid growth of click-and-collect, which saw a 130% increase in orders and a 113% uptick in users; highly penetrated categories that led online growth, as out of home occasions shifted to in-home consumption; and Instacart and other shopping and delivery services offering a point of entry and providing a platform to quickly scale online operations.
The organizations’ official 2021 forecast for digitally engaged food shopping, which showcases“the size of the prize” for traditional CPG food and beverage manufacturers, excluding retail foodservice or meal-kit sales, ranged from $94 billion (conservative) to $103 billion (moderate) to $109 billion (aggressive).
“The digital food and beverage landscape will continue to flourish in 2021, amidst economic recovery, fluctuating consumer confidence and the COVID-19 vaccine rollout,” noted Liz Buchanan, head of consumer intelligence, North America at Chicago-based Nielsen IQ, and one of the presenters of the research at FMI Midwinter. “However, the three factors that will most impact online expansion in 2021 will be the industry's collective ability to attract new shoppers, retain existing and grow overall spend. Tech will be a primary catalyst for helping manufacturers and retailers drive incremental growth in 2021. Looking ahead, the next horizon to conquer will be ownership of omnichannel. For this, an accompanying omnichannel data and technology strategy will be foundational enablers to progressing through the continuum.”
“Many consumers were introduced to e-commerce as the primary source for purchasing food, beverage and household products as a result of the pandemic, adding the title of omnishopper to millions,” said co-presenter Doug Baker, VP, industry relations at Arlington, Virginia-based FMI. “In the last 11 months, retailers have quickly shored up their data and technology platforms to support their omnichannel offerings. We’ll continue to monitor how the grocery shopper will respond as the COVID-19 vaccine is more widely administered and how the vaccine could influence their confidence to engage in pre-pandemic activities. Our industry recognizes that it will not only be important to attract and retain these new digital shoppers, but also consider how their brick-and-mortar shopping behaviors could change.”