In the face of the COVID-19 crisis, the food industry must avoid ‘business as usual’ practices and think outside the box, increasing efforts to develop sustainable and modern food systems.
In this article, we outline 4 major trends that have actually accelerated through the current pandemic throughout Europe and also Germany, but might stay long after the crisis has peaked. These are:
- Online Food
- Beyond Plastic
- Functional Food
- Sustainable Business
Food labels intending to start up or already operating in Germany might want to set focus or reorient towards these trends, in order to stay on track of consumer demand.
Online Food
Online food trade in Germany has grown by more than 20% per year in recent years, but the market share has remained small. Germans prefer making rather frequent supermarket visits in small grocery stores, and therefore they barely save money if they were to order online.
Further reasons seem to be the fear of spending too much money, or worrying that the food might not be as good of a quality. Also, DW argues that fierce price competition discourages discounters from investing in the online food business: “Germany has the lowest food prices in all of Europe. You can’t get a price advantage by offering an online delivery service”.
However, since February, online supermarket services have experienced an explosive increase in demand. Freshplaza explains how supermarkets can barely cope:
“Picnic (…) had to hire 200 new employees to meet demand, and put 70,000 newly registered households on a waiting list. Market leader REWE reports delivery times of sometimes more than a month”.
It is expected that this temporary situation will eventually lead to more acceptance of the online purchase of fresh food among the German population, even among older target groups, and the online behaviour of consumers might change forever.
“Food per Click is booming” says the image from Statista. Demand in Germany for orders through online delivery services has been consistently increasing for the past years.
More information regarding current online retailers, accounting rules and regulations and online consumer protection can be found in this article from Freshplaza.
Beyond Plastic
The Austrian Food Report 2020 from Hanni Rützler, released in January, already mentioned the upcoming trend named Beyond Plastic:
“The global plastic problem can no longer be denied and confronts the food industry with immense challenges to find alternative solutions for plastic packaging. At the same time, innovative start-ups are bringing a breath of fresh air and boost the market through the development of sustainable packaging all the way to packaging-free systems’.
Through an initiative that started in the UK, consumers all over Europe have made it clear that they want less plastic packaging, with some supermarkets even experiencing coordinated ‘plastic attacks’ where protesters dump unwanted wrapping at the checkout.
Given the new law voted for in the EU parliament in 2019, settling the goal for ‘a ban of single use plastic by 2021’, this is not even a matter of moral responsibility anymore. Several businesses are taking precautions and researching solutions before the ban sets in. Danish brewing company Carlsberg is developing prototype paper beer bottles, and Dutch Company EOSTA has introduced using laser stamps as alternative to plastic labels (already implemented in Holland, Germany, UK, Austria and Sweden).
The sooner companies in the F&B market start integrating sustainability in their expansion strategy, the better they are prepared for the future – especially regarding consumer demand, but also in the face of stricter law enforcement. Given the increase in online food deliveries, for example, businesses need to find a sustainable strategy to deliver food without handing out tons of packaging waste.
Functional Food
In Germany, health was already a hot-listed topic before the outbreak of COVID-19. The Nutritional Report of 2019 shows that 91% of participants stated healthy nutrition is important to them. In the same year, the German Food association (BLL) decided to introduce the Nutri-Score, a front-of-pack nutritional value labelling model providing a visual representation of the nutrients and calories contained in packaged and processed foods.
COVID-19 has led to significant mortality amongst individuals with compromised immune systems. This positions health and diet even further in the spotlight, as well as foods with functional benefits.
It entails growing awareness of -and interest for- ingredients that boost the immune system Galanakis from Food Soft states that bioactive food containing Vitamin C, A, D, E -known for their diverse supportive functions towards the immune system- will grow in popularity and demand.
Other winners in the COVID-19 era are Kombucha and Elderberry Flower, as it seems that these drinks are the most searched for on the Internet since February 2020. This goes hand in hand with the fact that Germans are increasingly trying to lower their fame as global marathon-drinkers: “Smoothies, functional drinks, tea and flavoured water drinks are literally on everyone’s lips” shared Austria Juice in January.
In the soft-drinks sector, the demand for high-quality products is increasing significantly. According to the article, sales of “Super-Premium” and “High-End-Premium” soft-drinks will increased by six and seven percent respectively in 2018.
It is also announced that traditional alcohol beverages with reduced or no alcohol will start filling up the shelves in supermarkets. An example is ‘Kolonne-Null’, an alcohol free wine series that has started up successfully in the hip and young neighbourhood of Neuköln, in Berlin.
As a food label, it is highly recommended to focus on the health-boosting qualities of your product, or to consider introducing functional foods and drinks into your formula.
Sustainable Business
“Time for Better Business in Europe”, is the single mega trend that the JLL Foodtrend Book attributes to our continent in 2020. It refers to the fact that Europe is leading the fight against climate change. Businesses, governments and especially consumers are listening to experts and taking action. “Concern for the environment” was the number one reason given from EU consumers for a plant-based diet.
In a previous article we already mentioned how social responsibility is of great relevance for German consumers. As showcased by a study from the Federal Ministry for the Environment (BMU) in 2019, environmental and climate protection ranks number one challenge for two thirds of the population.
The question is whether consumers are willing to pay the extra mile to lead demand towards a more sustainable food production. Germans are used to ridiculously low prices when it comes to food purchase, and the competition is fierce for producers.
Yet, this era might see an end coming to it, though. A clear example is the riots attracted by the slogan “Food has earned a prize: the lowest” from Edeka: farmers blocked a central warehouse of the German retail chain with tractors in protest against the unfair distribution of income and the little appreciation there is for the hard labor behind food products.
That the Germans pay close attention to prices is only half the truth. Although 63 percent of adults say that they look for the lowest price when shopping, every second person also says that he or she is willing to spend more money on organic quality. For products without artificial additives even 60 percent are willing to pay a little more. A group of the same size is prepared to pay a premium for environmentally friendly products. For the majority of consumers, quality criteria do play a decisive role when shopping.
Examples responding to this trend are being set by market leaders such as KFC -launching a vegan meat campaign- or UK brand Quorn, which has not only developed a plant based meat alternative, but also informs customers about the CO2 footprint that is generated by the purchase of their product, trying to enhance transparency and awareness for the matter.
2020 is the year of COVID-19
It is more than clear by now that the year of 2020 will remain marked by COVID-19. With help of previous forecasts for consumer trends within the food industry in Germany and across Europe, we resembled 4 major trends that were already on the go and have increased through the pandemic, but are likely to stay even after things go ‘back to normal’.
These trends are a peak in the online food delivery market, a strong effort from businesses to reduce plastic waste, increased consumer awareness for health and boosting the immune system, and a civil demand for businesses to assume social and environmental responsibility.
And now about us…
Our mission is simple: we´d like to help you make better decisions in bringing your products and services to market for a more successful businesses, and happier customers.
Why better decisions? 80% of businesses fail at growing. Be it startups that scale, seasoned companies that launch new products or that decide to enter new markets. Growing a business is and has been a challenging process full of bias.
Let’s learn from the past to create the future.
For more information get in touch with us.