On the Road to Recovery?

2020 may not have brought an abundance of product development excitement, but retail food and beverage sales surged. For the year ended Jan. 25, 2021, sales of all edibles in multi-outlet retailers were up 12.7% versus a year ago, according to data from the International Dairy Deli Bakery Association and IRI.

Food/beverage trip frequency recovered to slightly above year ago levels; basket size remained highly inflated. The frozen food department led growth with sales up 19.4%, followed by meat, +15.5%; dairy and produce, each +10.1%; bakery, +7.9%; and deli, +5.6%.

Sales of CPG food products positioned for meal preparation continued to grow for the period from May 3 to November 29, 2020, versus the same period a year ago, according to data shared in a webinar by IRI’s Sally Lyons Wyatt. Products/ingredients for home baking were up 25% while products for dinner grew by 11%, snack and breakfast products were each up 7%, and lunch products were up 2%.

The basic rhythm of food and beverage occasions has been only moderately impacted by COVID- 19, with the exception of a drop in late-night eating/snacking and, to a lesser degree, lunch, per information from the Hartman Group. IRI’s Lyons Wyatt reports that as of January 2021, 81% of meals were being prepared at home.

Also as of January 2021, just over half (51%) of consumers IRI tracked said they were extremely concerned about COVID-19. In addition, 71% said they expected the health crisis to last another seven months or more; thus, elevated levels of eating at home can be expected to continue.

COVID-19 has prompted changes in food and beverage choices. Over half (56%) of consumers report eating healthier since the pandemic, Packaged Facts reports. In fact, according to Hartman, one-third of all eating occasions in 2020 were focused on health/nutrition.

Four in 10 (44%) of employed Americans expect to work from home at least once a week after the vaccine is widely distributed, according to an IRI innovation report. Work commute trips in the United States remain 30% to 40% below pre-pandemic levels.

Sales of single-serve, portable food for life on the go, including nutrition bars, fresh meat/cheese kits, and some meal replacements, continue to suffer negative sales. Alone eating was down by 85% in 2020 versus 2019, according to Hartman.

The foodservice industry is gearing up for a comeback. Datassential reports that nearly three-quarters of restaurants were open as of February 2021; 73% offered takeout; 51%, indoor seating; 49%, curbside pick-up; 36%, delivery; and 33%, outside seating. Just over four in 10 consumers were still avoiding going to restaurants, however.

Finally, online food/beverages sales grew 125% to $106 billion during the year ended January 2021, Lyons Wyatt reports. E-commerce sales remain relatively small versus bricks-and-mortar sales, however.