2022 has felt like a year of constant change for the food and beverage category. We’ve seen rapid shifts in consumer behavior as the industry has faced curveball after curveball — including ongoing COVID-19 uncertainty, shipping and transportation disruptions, unstable commodity prices, ingredient and component shortages, out-of-stocks and more.
It can be tempting to come away from these events thinking that the only thing that brands and retailers can expect is the unexpected. But if you look closely and think tactically, you can make the most of this environment and achieve short-term success by focusing on these six areas of opportunity:
Make the Most of Travel and Entertaining
An IRI survey done earlier this year had found that 23% of respondents planned to travel more this summer, and 27% planned to travel about as much as last summer. Summer entertaining was also expected to be up slightly from last summer, with 70% of those planning to entertain and 69% saying they were planning a cookout or a barbeque.
Brands can lean into these entertaining and travel trends into the fall with promotions catering to grillers and people on the go. Collaborate with retailers on packages for grilling, picnics or a pizza night for families of four and communicate the value these fun options offer when compared to foodservice.
Encourage the Channel Journey
On-premise QSR trips per shopper have declined, while retail food and beverage trips have increased slightly. Low-income consumers, in particular, are planning to eat out less often and cook more meals from scratch.
There’s a real opportunity to spur additional grocery sales by executing strongly in-market. Look to expand distribution and assortment, and support these efforts with quality merchandising and promotions. Continue to identify ways to get one more trip or one more product in the basket or cart. Provide “takeout” options that rival those of restaurants at lower prices. As online meal kit companies see slowing growth, retailers have a clear opportunity to package their own convenient meal ideas to customers.
Engagement is key for success. Find ways to target and interact with your key consumer cohorts using targeted social and digital media. Be sure to hit today’s winning themes hard — especially in-home and out-of-home convenience and affordability. And make sure you communicate product benefits that align with your key consumers’ needs.
Here are four categories that have displayed recent growth, along with the drivers of their success:
- Pastries/donuts: indulgence, convenience, plastic-wrapped for food safety and freshness
- Soups: affordability, convenience, sustenance, deeper discounts
- Frozen appetizers/snacks: value prices on individual packages near $1, sustenance
- Energy drinks: fun flavor innovations, zero sugar, mocktail possibilities
Focus on Affordability
As inflation continues to rise, we expect elasticity to bounce back further and promotions to increase later in 2022. Low-income consumers have cut back on prepared entrees and more expensive cuts of meat. As they lean into less expensive foods and beverages, support them with meal ideas that include:
- Pre-packaged processed dinners or cheaper meals
- Less expensive cuts of meat
- Cooking/baking/meal prep items
- Sides
- Desserts
- Drinks
- Powdered milk
Reach Focused Consumer Targets
Identify the consumer cohorts that deliver on your priorities, and then meet their needs with custom offerings. Examples include:
- Investing in advertising and emotive marketing to reach Gen Z consumers with a focus on convenience, energy drinks, ethnic foods and sustainability.
- Preparing for shrinking family sizes with offerings tailored for smaller households.
- Prioritizing e-shopping enthusiasts, who spend 70% more on center of store than average consumers.
Innovate With a Focus on Customer Needs
Continue to work recent product innovation trends such as:
- Convenient, quick-prep at-home meals, individual portions and easy protein snacks.
- Premium at-home indulgent treats in unique flavors.
- Better-for-you foods containing plant-based, sustainable, clean and functional nutrition ingredients.
As we experience a period of fast-evolving consumer shopping and consumption behaviors, being agile in meeting customer needs is more important than ever. Responding quickly to today’s trends and anticipating future ones is the best way right now to catapult growth across brands, categories and the entire store.