When a seemingly harmless virus erupted in China in late 2019, the world didn’t spare it a second look. But by February, the virus had become widespread, sinking its claws deep into Europe and Asia, wreaking havoc on society and economy on a global scale. Even the food industry – one of the primary industries has not been spared. It became one of the worst-hit sectors.
The contagious nature of the virus forced people indoors, shutting down restaurants, eateries, and bars on a massive scale as national level lockdowns were declared to slow down the spread of the virus. The daily restaurants’ population witnessed a steady decline. Closure of restaurants created a ripple effect throughout the whole food industry, slowing down food and wine production, shipping, fishing, and farming. Some areas saw panic buying driving sales up for a while, resulting in shortages, but the overall effect on the industry remained crippling.
Low food deliveries impacted Quick-service restaurants (QSRs) and online food aggregators. According to Financial Express, most restaurants have seen a decline of 2-6% in sales in the first quarter of 2020, which is substantial, considering the 25-30% growth they witnessed during the same period last year. Food aggregators have seen a 50-60% decline in orders being placed on their platforms. Consumers cut down on discretionary spending, and surveys suggest this mentality is here to stay as people are wary of outside food.
To survive this pandemic, QSRs need to realign their strategies towards online deliveries and takeaways. In the pre-COVID times, most QSRs used to get 20-30% of their revenue from deliveries. Now they need to take this to 50-70%, as restaurants will continue to see declining traffic in the near future. Some restaurants with the food aggregators in tow have already geared up in an attempt to increase sales – introducing social distancing norms, regular temperature checks, hygiene, and safety checks to ensure contactless deliveries.
Many chef-driven, fine dining restaurants now face serious hurdles as they try to move to zero-contact dining experiences keeping intact the aesthetics and the charm of the outside dining process. They have to rethink their dependence on food aggregators like Grubhub, UberEats, Zomato as the economy leans towards deliveries. Usually, QSRs pay 15-20% per order to food aggregators for deliveries through their platforms. So, they may even have to build up their online presence and food delivery capabilities to maintain profits.
Even simple everyday tasks like grocery shopping trips became trials, and people emerged as budding stay-at-home chefs. Such tribulations marred the re-emergence of the food industry as they struggled to cope up with new marketing challenges and dramatically changing consumer food habits in a social distancing economy.
In-store grocery shopping has become an enduring task that everyone clamors to complete as strategically, cost-effectively, and quickly as possible. The frequency of grocery shopping has declined due to the fear of the virus. Assuming comparable costs, consumers overwhelmingly prefer shopping online with home delivery as their first choice, and drive-by or curbside pickup as their second choice.
Stay at home conditions have changed people’s eating and snacking habits. People tend to eat more to cope up with stress or boredom. Some have turned to a healthier path, consuming more vegan products or organic vegetables, fruits with meat, poultry, and dairy products on the side, while others have turned to sweets and quick to make meals. The marketing strategies will have to wait and adapt throughout the next year as consumers decide which habits to keep and which to “return to normal”.
Gourmet street foods have been an affordable, tasty option for people in the less developed sections of the society. But with hygiene concerns rising, street foods will not be the preferred option for the people for months to come. This may be an increase in the organized sector of cheap food, coupled with great taste and the convenience of delivery.
With people fearing that the virus may spread through meat, they are moving to switch from an animal-based diet to a plant-based one. Herein comes the scope for the popularisation of mock meat and meat alternatives. As already seen, mock meat provides enough protein to satisfy the dietary requirement of a person. This industry has already seen the great potential, and if appropriately explored, it is yet to give more benefits.
As governments enforced lockdowns strictly, people found a new way to explore their creative sides by refining their culinary skills. These ‘At Home Experiences’ will pave the way for a growing sector that will focus on providing catering services, with the option to cook at home.
Kitchen devices have also seen a rise in demand during this stay at home period. As people try out new dishes and recipes, many may have already purchased or plan to purchase small kitchen appliances.
A restaurant’s profitability and social culture have always been driven by alcohol. With different rules around alcohol sales and delivery, brands find themselves in an interesting spot trying to turn the situation around as they set up online sales and hire out-of-work bartenders as online mixologists for easy-to-make home cocktails. With more time spent at home, people are consuming even more alcoholic beverages at home now than they were before.
These findings provide an opportunity for marketers of alcohol brands and services to capitalize on a market that hasn’t yet quite taken off. With such dramatic changes on the food front for the consumers, the big question is which trends are a fad and which are here to stay. Predicting which trends will fail or accelerate will secure the future of the food industry as everyone tries to grapple and come to terms with the new reality of the world.
