6 FOOD AND BEVERAGE INDUSTRY TRENDS FOR 2021
The events of 2020 have shifted consumers’ behaviors, mindsets, and approaches in many areas of life. Many industries, including the food and beverage industry, have felt the effects of these shifts. In this post, we’re going to talk about 6 food and beverage industry trens for 2021. Throughout this post, we will assess how the COVID-19 pandemic has influenced these trends. To wrap things up, we will also talk briefly about the most popular food products of the past year and leave you with some information on selling food and beverage products on Alibaba.com.
What’s going on in the food and beverage industry?
For the larger part of 2020, the global spread of COVID-19 changed people’s lives in all corners of the world. Businesses began to operate at limited capacities, people were forced to stay at home and lifestyles changed.
Quarantining and self-isolation changed many people’s habits. Some set out to improve their cooking skills while stuck at home, and others made changes towards healthier living. Many people turned to food for comfort during this stressful time.
Consumer behavior isn’t the only shift we’ve seen this year. Factories and farms have shut down at different points in time in an attempt to slow the spread of the virus. Shutting down factories has the unfortunate consequence of delaying production and creating temporary shortages in some regions.
This year has been far from normal, which has definitely affected the food and beverage industry in many ways.
Each of the factors that we mentioned above has made a different contribution to trends in the food and beverage industry. Let’s take a look at the top 6 trends that we’ve seen on a global scale in the past year.
Vegetarianism and veganism are two growing trends. People are making these lifestyle shifts for a variety of reasons, including promoting health and wellness, eliminating animal cruelty, and prioritizing sustainability.
Beyond Meat and Impossible Foods have been two major forces in this industry. They create meat substitutes from plant-based ingredients. Their products are available in grocery stores, restaurants, and even some international fast-food chains, including Burger King1. These brands are not the first to manufacture plant-based foods, but they grew in popularity due to their ability to produce meatless products that taste like meat.
The outbreak of COVID-19 has also led to a meat shortage in certain areas. The prices of items like chicken breasts and ground beef skyrocketed. It is the animal-based meat shortage combined with increasing interest in natural and organic products that contributed to the significant spike of retail plant-based food sales in the past year according to the researches2.
Meatless “meats” are not the only plant-based products that are on the rise. Some businesses, like Green Mustache, a Gold Supplier on Alibaba.com, produce snacks that are totally vegan to appeal to consumers that avoid animal products due to sensitivities, beliefs or the general desire for “better for your foods.”
Since the market for this type of product is growing3, more businesses are emerging to fill that need.
Although produce isn’t a new trend, consumers are buying more fruits and vegetables than ever before to ensure an adequate intake of immune-boosting vitamins and nutrients.
According to a study done by 210 Analytics, IRI, and the Produce Marketing Association (PMA) in May 20204, fresh product sales saw a 14.3% YoY increase and frozen produce sales had an impressive YoY growth of 33.8%. Consumers were in their stock-up mindset and were turning to frozen produce to avoid multiple grocery store trips during the quarantine.
The spread of COVID-19 has sparked a revolution in the way that people view their health. Many people have set out to strengthen their immune systems to the best of their ability5 One of the best ways to get a healthy amount of these vitamins is through fruits and vegetables. This caused an increase in demand for produce.
Since Vitamin C is widely known for its immune system support and oranges are known as a good source of this vitamin, sales for oranges and orange juice saw a significant increase.
The increase in produce consumption will likely go on for years to come since improving immune system health was just one catalyst for this change. The popularization of plant-based diets that we mentioned also comes into play, but we will talk more about this later.
Spending extra money on premium products, including premium foods that emphasizes the superior quality and exclusivity, is referred to as “premiumization”.
As we mentioned, people have had many different mental and emotional responses to the pandemic that have influenced food and beverage consumption. As the “self-care” and “treat yourself” mentalities continue to grow in popularity during the pandemic, pampering and treating yourself with premium food has become even more important, as a way to cope with the tough times.
The inability to travel and enjoy other outdoor activities has freed up many people’s budgets leaving them with money to spend. Researches also show that millennials and Gen Z make premium purchases far more often. In addition to the superior quality and greater performance – the 2 most obvious characteristics of premium products that justify a higher price point, the young consumers also cite emotional reasons that align with their “treat yourself” state of mind. Brands should leverage the “premiumization” trend in order to tap into Gen Z’s growing purchasing power.
Although the world slowly begins to open back up and people can begin to go out again, premiumization is predicted to become even more popular in the coming years. According to a report published by MarketWatch6, the global premium chocolate market is expected to grow at a compound annual growth rate (CAGR) of 7.28% from 2018 to 2022.
A common quarantine hobby was picking up cooking skills. People who were used to being on the go and regularly eating food from restaurants began to learn their way around the kitchen.
As people discovered new recipes, they often needed spices and condiments that they hadn’t purchased before. In fact, the first quarter of 2020 saw a 67% year-on-year increase in ingredient and condiment sales on Alibaba.com.
This trend probably will not be sustainable for long, because at some point, people with the demand for these products will eventually build well-rounded spice and condiment collections. This will cause a decrease in demand.
Of course, there will still be some demand for these products, but it will likely not be as high as it was when it surged earlier in 2020.
spices and condiments
Different countries, territories, and municipalities have gone through lockdowns at different times over the course of the past year. Some situations called for factory shutdowns that lasted a week or two while other shutdowns lasted for months.
According to the World Bank, developing countries have had the most issues with food shortages and supply chain disruptions in the past year7.
In the United States, however, there was never a real issue of food shortage8 since the country already produces an overabundance of food, but people were scared that there would be. This caused people to panic buy.
Tyson Foods, an American meat manufacturer, had several shutdowns in large plants which led to fear of shortages over the summer9. Smithfield was another American meat factory with similar closures.
Over the past couple of years, more people have started taking actions and prioritizing sustainable living. The motivation for this shift comes from the collective desire to reduce the global carbon footprint and preserve the non-renewable natural resources on this planet.
Researchers propose that a plant-based diet is better for the Earth10 than a diet that is centered around meat and dairy. While some environmentalists totally rebuke the consumption of animals, the general consensus is that the world would eat less meat.
The manufacturing of plant-based food that we mentioned above is also related to this preference for sustainability. The idea is that it is much more resource-efficient and eco-friendly to raise crops than it is to raise animals.
Ecommerce refers to any form of business transaction conducted online, or in other words, it’s the selling of products, goods, or services either through the internet or electronically. This means that every time you buy or sell something on the internet, you’re partaking in Ecommerce.
As of now, Ecommerce is one of the fastest growing industries in the global market. Mobile commerce, or mCommerce, has had a huge impact on this growth though the expanding influence of millennials’ comfort with shopping online. This industry can allow you to have a unique identity on the web, in addition, to helping you market and sell your products.
One of the first things to think about when it comes to Ecommerce is the type of business transaction you would like to be involved in. When thinking about running a business, what type of business model do you want to focus on? Is your business B2B, B2C, C2C, or B2B2C?
B2B: Business to Business
B2B is when businesses sell to other businesses directly. Normally, B2B companies provide a discounted rate for customers that buy in bulk.
B2C: Business to Consumer
The B2C sector is the most common type of Ecommerce business where merchants sell to customers who want to buy a small amount of goods.
C2C: Consumer to Consumer
C2C is relatively a new kind of business model where customers seek to resell items that they have already previously purchased. Most C2C sites allow customers to buy, sell, and trade items in exchange for a small fee.
B2B2C: Business to Business to Consumer
B2B2C is a collaboration process that combines B2B and B2C for a complete product or service transaction. A business developing a product or service partners with a business to use a particular service, such as an Ecommerce website to reach new markets and customers.
Lower Financial Costs
The B2B industry is crawling with opportunities and can move thousands of products with only one transaction. B2B companies already know what they want and are quicker to buy, which means lower costs on your marketing efforts. It eliminates the need for a traditional physical store and is more convenient than having to rely on trade shows.
Increased Brand Reach
Ecommerce sites offer a big advantage for customers that aren’t located in major cities and urban areas. B2B marketing allows you to revamp your business model so that it can be geared towards expanding your target audience. Many businesses have developed good search engine optimization practices, which helps drives more traffic to their product or service.
Having everything digitized makes it much easier to collect data on your customers and track logistics. You can afford to take more risks and try more creative marketing strategies when you know exactly which products are selling best.
Buyers run the risk of identity fraud and similar risks every time they enter personal details online. If your site or service doesn’t reassure buyers that the check-out process is safe, you could lose them from buying your product altogether.
Buyers are often concerned that vendors don’t fully understand the unique needs of the B2B customer experience. With careful research on vendors, you should be able to find platforms that provide specialized services for features such as purchasing workflows, and a diversified list of shipping options.
B2B marketing tends to take more time and investment. Buyers expect more personalized services from sellers due to the inability to touch the product. It’s important to invest in a digital platform that provides transparent services where customers feel empowered to conveniently find solutions to their problems.
Now that you know more about the Ecommerce industry, you’re ready to take your digital needs to the next level. Starting an Ecommerce business can be attainable for anyone, so take the knowledge provided in this article and apply it to your own Ecommerce goals. With a buyer-centric strategy, you can take advantage of everything digital marketing has to offer by moving away from traditional processes and offering a seamless online buying experience through Ecommerce.
Innovative Hub is proud to announce that we have expanded! We now have a new branch office in Vietnam; Innovative Hub Vietnam as the Official Vietnam Channel Partner for Alibaba.com. We are excited to be able to reach out to Vietnam customers to assist in digitalizing their business to global trading!
Stay tune to more exciting news from us!
Venue: Singapore EXPO & MAX Atria.
We are honoured to be the techonolgy partner of SMF Digital program. Singapore Manufacturing Federation (SMF) and Innovative Hub to bring the Singapore Pavilion at industry tradeshow Food & Hotel Asia 2018 (FHA 2018) to the Alibaba portal, and to help connect local businesses and overseas buyers beyond FHA 2018.