2020. This crazy, no Fs to give year left no stone, no person, and no way of life or business untouched. For the food and beverage industry, the ride was, and still is, full of constant ups and downs.
Changes and shifts that were in the works in 2019 such as dark stores and e-commerce options were pushed ahead faster than anyone expected. Shortages and supply chain weaknesses that had long lurked underneath were blatantly exposed. Consumer habits swung back and forth from healthy options to comfort snacks to big food standards to new alternatives.
Yet the pandemic has also brought about much innovation within the food and beverage ecosystem, from product types to packaging styles to shipping logistics and of course, buying behavior. Further, how the industry responded to the challenges it faced in 2020, has set up what will continue to advance in 2021.
Below are a few trends that we’ve been seeing, watching, and talking about here at Foodboro.
2021 FOOD AND BEVERAGE TRENDS
Return of the Emerging Brands: Emerging brands were on the up and up in the years preceding the pandemic. Yet once Covid-19 forced everyone indoors, customers began seeking comfort in big food snack brands. Fiona Lee, COO and co-founder of Pod Foods, said the gains emerging brands had made before Covid were seemingly erased at the start of the pandemic. But as the pandemic wore on, people began to get bored of what they were eating and started to buy more interesting snacks to try. Also at a play was the shift in the idea of affordable luxury where people substitute their real world splurges with food splurges, she said. “If you can’t go to the movies and spend your money there, maybe you would buy a better brand of popcorn.” (Hear more of Fiona’s trends here.)
Health is Wealth: Already an explosive category before 2020, wellness products, particularly ones that promise to boost or strengthen your immune systems, will continue to flourish next year. That includes the plant-based items which are increasingly being placed next to meat items in grocery stores, functional beverages, better-for-you snacks, frozen foods, and even upcycled foods as a healthy planet is just as important too.
Shoptainment: Social media continued to be a huge driver for e-commerce in the pandemic (see what Tiktok has done for food and beverage brands here), yet this will evolve in 2021, possibly into more shoptainment, which is already huge in China. Simply put: Entertainment + Commerce + Content = Shoptainment. We know what you’re thinking, is this the modern-day infomercial for the internet age? Kinda but cooler. Think of it more like an extension of a popular YouTube channel. Either way, food and beverage commerce will move far beyond just propping up some fun-looking products against a cool background.
Next-Level Micro-warehousing: 2020 has changed grocery habits like no other and catapulted us forward 10 years in 10 months. Here in the US, the trend that appears ready to take hold in 2021 is micro-warehousing coupled with curbside pickup. Expect to see the “experience” of curbside go next level, especially in grocery & c*store and the logistics of these experience will be fueled by micro-warehousing data and logistics, which will allow urban and ex-urban locations to quickly and efficiently power these “new store” experiences.
Sustainable Packaging: After nearly a year of ordering more and more F&B digitally, consumers are growing tired of plastic bags, bottles, packing peanuts & more so look for alt-packaging to go mainstream. (Right now we are pulling for mushrooms!) Amanda DeVries, owner of Eye Candy Design, said the move towards fully compostable does have some hurdles, as packaging companies have yet to catch up to the demand, and it can be difficult to source suppliers. Also, the cost is typically higher, she said, so the margins often don’t make sense for startups. But may 2021 be the year that begins to change.
BIPOC Products: A product with a local story or background is now table stakes, according to Fiona at Pod Foods. What retailers are now looking for are products made by BIPOC founders and makers, even go so far as to prominently display them. Organizations like the 15 Percent Pledge are already asking major retailers to stock their stores with 15 percent black-owned business items, thereby encouraging other retailers, large and small, to do the same.
Digital Marketplaces: How long can consumers be expected to go 10 different D2C websites to get the new F&B products they crave? AOV needs to go up, consumers are willing and wanting bundles, so brands and marketplaces just need to come together and figure out a way where it works for both sides. Who could and should build this successfully for F&B? Shopify! They have long stayed away from marketplaces but the rebels need an organized alliance….
Corporate Wellness Programs: Travel and expense budgets were frozen all throughout 2020, and corporations have dabbled with SnackMagic gifts and food for specific digital events, but next year, corporations should have a budget line to address this, which is something WFH employees will absolutely love—programs that focus on physical and emotional well-being and which include better-for-you food and beverage options.
CloudRetail: When Travis K. launched Cloud Kitchens it was known that Cloud Retail was not only on their road map, but it was a recognized business unit. In 2021, Cloud Retail will usher in the full-blown trend of CPG micro-fulfillment and delivery. Big Food (Unilver) and Emerging Brands (Raw Juicery) have both partnered with CSS Cloud Retail and will be going up against goPuff, FoxTrot, and yes, DoorDash in trying to aggregate consumers in this space. This opens the door for F&B brands to really add cloud retail (get a rack in these physical spaces, cold storage or dry) and fulfill many orders day of in local markets where these players exists. Think of this space as 3PLs but with a 2 hour delivery instead of 2 days.
Robotics: It wouldn’t be a trend list without a mention of robots, right? So this trend may not be fully realized in 2021 (after all, we’re still trying to pull out from a worldwide pandemic) yet using robots to pull together parts of food and beverage products is on the horizon. One such food robotics company, Karakuri, has raised a considerable amount of funding. Its initial intent was to build breakfast bowls, but can be programmed to do so much more. Other food and beverage makers, particularly big food, might utilize similar robots to streamline their operations as well.
Retail Everywhere: We’ve long been saying omnichannel is the way forward but expect this to explode even further in 2021 now that everyone’s already begun to shop through different outlets, both online and off. Since the pandemic has drastically changed the way we shop and where we shop, more brick and mortar retail spaces have begun to open up their spaces to other partners for new cross-selling opportunities. What could this look like? Getting convenience store goodies from Doordash, buying cuts of meat from your favorite restaurant to prepare at home, or ordering a case of wine from the small boutique where you buy your clothes.