Pandemic boosts sales of packaged food, brings lasting impact on consumer behavior

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Pandemic boosts sales of packaged food, brings lasting impact on consumer behavior

24 Feb 2021

Liz Goodwin

Liz Goodwin is a Texas-born journalist and photographer. Although a Southerner at heart, she fell in love with the Midwest at the University of Missouri where she earned her bachelor's of journalism. When she’s not writing or behind a camera, she loves to cook, find new restaurants, and spend time outside. Her favorite baked goods include croissants and crackers, especially when topped with fig jam and brie.

KANSAS CITY, MO — To say that 2020 was a year many were happy to see end is an understatement. But amid all the chaos of COVID-19, the pandemic did prove to be a friend to retail sales of packaged food … and an unstoppable force in changing food trends. With more consumers accustom to convenience and cooking at home, retail food sales shot upwards while other economic sectors plummeted.

Tom Rees, industry manager, food and nutrition at Euromonitor broke down how the pandemic grew retail food sales and what “pandemic trends” are here to stay in a breakout session during the American Society of Baking’s virtual BakingTECH conference held Feb. 16-18.

2020 opened new avenues of growth in retail sales. Lockdowns and restrictions on dining meant eating at home exploded. Last year yielded a 4.6% increase in global retail sales of packaged food, ending at a grand total of $2.5 trillion. There was also a 6.1% increase in sales of staple foods.

In the world of retail, food was the winner. Packaged food, hot drinks and fresh items put other goods to shame in 2020. These categories increased their sales by a range of 4 to 6%, while items such as luxury goods, apparel and footwear, and personal accessories plummeted by anywhere from 12 to 18%.

With consumers moving from the restaurant to the home, many eating occasions — the ones foodservice banks on — were confined to the home last year. Mid-day coffee and pastry breaks at the office, school lunches, and celebratory dinners were relegated to the dining table or work-from-home desk. This provided a big boost to in store retail. As Rees said, “Our engagement with food over the course of 2020 had to increase. We’ve had to buy more to eat more at home.”

Additionally, services like curbside pickup and third-party delivery services such as Instacart and Uber exploded over the course of the pandemic. Gone are the days where crowded grocery stores are the consumer’s only option; e-commerce provided a safe way for people to get what they needed without having to leave the house. Rees explained that not only was this a huge area of growth in 2020, but the trend is also here to stay. Now that consumers have had a taste of the convenience of online ordering, they aren’t going back.

“Our engagement with food over the course of 2020 had to increase,” said Tom Rees, industry manager, food and nutrition at Euromonitor. “We’ve had to buy more to eat more at home.”

And this growth is predicted to continue. Euromonitor projected an average year-on-year growth rate of 2.1% for global retail packaged food sales from 2022 to 2025. The firm also forecasted $2.7 trillion in global retail packaged food sales in the year 2025.

Ultimately, medium and long-term effects will stick around. Consumers are going to want value-for-money deals as they cook at home and save more during the onset of an economic recession. There will be less demand for foodservice, even as vaccinations become more common and restrictions are lifted, in an effort to save money and out of a concerns over food cross-contamination. Rees predicted the staying power of other consumer habits that were either solidified or accelerated in 2020. Those include the priority of eating locally, an emphasis on food safety and greater purchases of health and wellness foods.

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