The Impact of Consumer Preferences on Food Production
Economic stress and health concerns have given rise to new consumer trends in the food industry. Though the sector hasn’t seen a significant drop in demand, companies have still had to acclimate to shifting preferences.
As tastes change, businesses will need to modify their tactics and products alongside these trends. Consumers will never outgrow the need for food, of course, but food industry executives are fighting an ongoing battle against quickly adapting competitors.
Even after the pandemic subsides, preferences aren’t likely to revert to pre-COVID-19 practices. Considering these changes, adaptation is crucial for food producers to remain successful in satisfying customers.
Consumer trends such as transparency and affordability are shifting and these changes impact food production.
Transparency in the Face of Uncertainty
If the pandemic’s effects can be summarized in one word, it’s “uncertainty.” Consumers have faced uncertainty in many forms throughout the year, and they want stability, transparency, and assurance. From a food consumption perspective, as much as 81% of grocery shoppers say brand transparency is important to them.
A high degree of transparency is good for consumer confidence, providing some amount of relief from the pandemic’s unpredictability. Customers want to know where food comes from, its impact on their health, its effect on the environment, and more. Companies that avoid misleading marketing are likely to see the most success in light of this preference.
Of course, being transparent about unfavorable practices won’t help companies very much. Food producers should embrace trends like local production and sustainability for their changes to have lasting benefits. Decision-makers don’t have to follow every trend, but being open about a few will be critical. This also counts for product affordability—companies must avoid tactics like price gouging and ensure honesty and fairness when selling goods.
A Growing Focus on Price & Affordability
Many people have faced and continue to face economic challenges because of the pandemic. Millions of Americans lost their jobs, and many others have needed to work fewer hours. Even as the economy starts recovering, spending habits may continue leaning toward affordability.
According to Shorr’s Food Packaging and Consumer Behavior Report, 55% of respondents who’ve changed habits say price now matters more to them than ever before. Customers are moving away from higher-end goods in favor of more affordable items.
This is also an essential consideration for delivery services, which tend to cost more than pickup or in-store shopping. Instacart, which lost $300 million in 2019, first turned a profit in April. It became so valuable throughout the pandemic that it’s slated to go public in 2021 with a valuation near $30 billion as customers have used a portion of their grocery budget paying extra for grocery delivery to avoid exposure.
Grocery stores accounted for less than half of food spending in February and more than two thirds of food spending by April. As restaurants and schools closed and demand dropped, farmers plowed over fields of produce and dumped milk by the millions of gallons. As the year went on, this scarcity led to a rise in food prices as demand increased. Grocery stores and food producers saw cost increases from enhanced safety protocols, new operating procedures, and increased hiring. Those expenses have passed on to the consumer, making food more expensive even for those not dining out.
If food production plants can cut costs wherever they can, they’ll be better suited to meet consumer expectations.
The Rise of Delivery Services
The COVID-19 pandemic has made the mere act of leaving the house a health risk. Amid these hazards, many consumers have started ordering food and grocery delivery more often. Since there’s no evidence that food transmits COVID-19, grocery and food delivery services can enable worried shoppers to stay safe and trust that their items will arrive uncontaminated. The four top restaurant delivery apps—Doordash, Uber Eats, Grubhub, and Postmates—had a collective revenue of $5.5 billion in the second and third quarters of 2020, compared to $2.5 billion over the same period in 2019.
This trend is positive for delivery services, but food production companies can also take advantage of it. Products that are better suited for shipping and travel could see better sales. Companies that want to capitalize on this trend should consider making their products as shelf-stable as possible. As in-person dining has been shut most of the year, Malibu’s Real Coconut Kitchen pivoted to offering its grain- and dairy-free menu ranging from cheese to baked goods to curries on delivery platforms. Vegan foods translate particularly well to this platform switch because they don’t spoil easily.
Packaging also plays a central role in keeping products safe throughout the delivery process. Delivery can expose foods to different temperatures and bump them around, which means strong, airtight packaging is essential. Items that can stay fresh and undamaged after delivery will appeal to this growing consumer segment more. UPM Raflatac, a sustainable label maker, has used customer feedback to develop tamper-proof labels for contactless delivery containers, QR codes with digital tracking data so eaters can know where their food has been, and heat sensitive label ink that changes colors when packaged food enters the temperature danger zone.
Ingredients Over Finished Products
Although delivery services are becoming more popular, that doesn’t necessarily mean consumers prefer takeout over home cooking. As restaurants close and people spend more time at home, these individuals are preparing food more often than they have in years. According to one study, 54% of surveyed consumers are cooking more, and 46% are baking more.
Since so many people are trying to make food at home, they may prefer ingredients over meals that are already prepared. Things like prepackaged and frozen dinners may fall out of fashion as products for homemade dishes will potentially grow more popular. At the very least, companies that make fully prepared meals may consider offering products that require a few more steps.
For the families and individuals who are cooking more at home, novel ways of preparing meals are appealing. Those who are new to the process will find very few barriers to entry with easy step-by-step instructions and a wide range of recipes.
Consumers may continue to cook with greater access to delivery and meal services, meaning the homemade cooking trend could last after the pandemic subsides. However, it’s also worth noting that changes within delivery trends—and a flexible food market—may influence how often consumers choose homemade options over prepackaged ones, especially given the prevalence of appliances with multiple functions that allow home cooks to air-fry, pressure-cook, and bake all in one.
An Emphasis on Flexibility
Few things have remained constant throughout the pandemic, highlighting the need for flexibility. Given how quickly state and national situations can change, consumer preferences can also rapidly shift. Food production companies need to prepare for further changes, embracing practices that enable adaptability.
Although lockdowns eased in the summer and fall, many states are enacting new restrictions as cases rise again. This up-and-down pattern will likely continue throughout the pandemic, and consumers will adjust their behavior in response to shifting policies. Businesses that can’t adapt at a moment’s notice may struggle to stay afloat.
Delivery and affordability trends are likely to fluctuate throughout 2021. Companies should be able to produce goods for a range of budgets and meet changing shopping habits as adjustments occur. Practices like automation and domestic sourcing will help businesses become as flexible as possible.
Companies will also need to become more flexible regarding internal operations like sanitation. As cleaning recommendations and guidelines shift, organizations will have to respond to these modifications accordingly.
Higher Standards with Sanitation
Consumers are developing higher expectations for businesses’ sanitation policies as the pandemic demands greater cleanliness. Food production companies will fall under particularly high regulations, as their products require more sanitation than most things.
The food production industry will have to adopt new and more detailed practices for ensuring everything is clean and safe. Any word of less-than-favorable cleaning procedures could leak to the public and damage a company’s reputation. Customers will also need assurance of these new standards.
As companies adopt new sanitation policies, they shouldn’t shy away from publicizing them. It’s hard to overstate the importance of being transparent in this area. Sterilex, a maker of industrial cleaning products, has seen revenues skyrocket, as has Eagle Protect, which makes high-quality disposable gloves made from durable nitrile that tears less often than latex. Clearly, food producers are investing in enhanced sanitation. Letting potential customers know this will drive consumer confidence.
Food Production in 2021
As 2021 unfolds, it’s clear that industries will have to wrestle with the pandemic for a while longer. Since these trends are likely to last, food production businesses should consider and adapt to them now. The faster companies can rise to meet changing expectations, the better they’ll perform among new challenges.