Three big post-pandemic challenges facing food companies

Are we beginning to see an end in sight for the Covid crisis?  Who knows?  But there is a sense that companies have now digested the shock and are starting to focus time and energy on planning further out, for the medium and long term.  That means understanding the changes in the way that Britain will eat, shop and think, and responding accordingly. 

So what will be the most important changes and how can companies respond?    

First, channel shifts.  Online will grow and convenience stores may benefit symbiotically.  Creating a challenge for bigger supermarkets.  So what?  Online can be good for brands, as it is easier to achieve long term loyalty.  “Winning early“ as shoppers visit new sites is crucial  -  getting onto the favourites list.  Online marketing expertise is also key.  It’s a different world to stores, particularly Amazon.  Convenience stores are also unique.  Often approached on foot (pack size), often hungry, and often with “a meal for tonight” in mind   Price is important, as Aldi and Lidl enter the sector.  For large stores, the question is what to do with all the space? To pull shoppers requires theatre and interest, but the challenge is cost.  Retailers will continue to sublet space to third parties. 

Second, a quiet revolution in the way people plan their food.  There is a tension in food lives.  Consumers would like better, more interesting meals, but they lack the confidence and know-how.  Now, with the digital space dominant as the place for knowledge and ideas, the food industry is well off the pace.  We see the likes of Joe Wicks and Mob Kitchen filling the gap.  Their short videos show consumers how to cook something different far more effectively than a written recipe or leaflet.  And they give confidence that “you can actually do this”.  As our industry wakes up to the potential of video to help with food ideas, we will see much more food adventure.  We will not be able to rely as heavily on the same old favourites. 

Third, sustainability.  There is an unstoppable momentum in society and the industry.  Look at Retailer commitment to sustainability even through the Covid year.  For example, Tesco’s recent commitment to grow sales of Meat Alternative by 300% 2018 to 2025.  Within any single year, companies can avoid facing into the big picture  but in the long term, carbon, food waste and energy use will become more and more inhibitive if they are not tackled. 

So, channel shifts, food adventure and sustainability.  Three major changes coming at us.  It is time now for companies to get their heads around them and plan their response. 

Jeremy Garlick is a Partner of Insight Traction, consulting with FMCG and Retail companies.  He was formerly Head of Insight at Sainsbury’s, Waitrose and Premier Foods.