2021 was the biggest year in history for the food eCommerce industry. The market ballooned in size, swelling 23.2% CAGR to a $31.25 billion empire. Both fresh and packaged foods are increasingly demanded from consumers, who now purchase nearly 50% of their groceries through online delivery. In light of these numbers, experts suggest the online grocery industry may become a $100 billion dollar business.
Food eCommerce companies have more competition than ever before, and with such rapid growth within the past two years, their continued success is heavily reliant on staying abreast of food industry trends. Many of 2021’s greatest breakthroughs are projected to remain constant, although there are several new developments beginning to materialize in 2022. Social media shopping, mobile phone use, and direct to consumer (D2C) products are becoming bastions of the food eCommerce industry. What trends will remain to define the year, and what new ideas will become important for growing food and beverage businesses?
This article will explore this question, evaluating current, consumer, and product trends specific to the food and beverage industry, and how they will impact the eCommerce field moving forward. Let’s look at the food trends 2022 is likely to bring.
Current Trends in Food and Beverage Industry
Trends in the food and beverage industry are rapidly evolving. Sustainability remains a major factor for 77% of consumers, including sources, packaging, and presentation. Subscription business models like meal kits and other delivered groceries continue to see steady gains, up to 11% in Q2 last year. Interestingly, meat production challenges have not inhibited a growing consumer demand, despite the 3% price hikes year over year.
Trends established during the COVID-19 pandemic continued into 2021, namely with a notable increase in mobile grocery shopping. Research suggests that 2022 will see nearly 70% of consumers buying groceries online, 54% of which will make purchases via mobile phones. In order to adapt to changing consumer trends, food and beverage brands are investigating new ways of managing cocooning behaviors with contactless delivery options.
Customer experience is also being taken into account. Businesses focusing on UX and UI concerns outperform competitors by 80%, and generate 5.7 times more revenue with superior customer services. To do this effectively, brands have begun investing more time and effort into communication commerce channels, integrating chatbots, AI, and messaging software to provide comprehensive answers at the customer’s point of need.
Consumer Trends in Food Industry
Apart from food and its delivery, food and beverage consumers are also beginning to alter their behaviors in response to the pandemic.
In 2021, there were more people living alone than ever before and 31 million single person households spent roughly $200 to $400 a month on grocery costs. Not wanting to go out and eat by themselves, single member households may prefer to order groceries and meal kits that they can cook and eat alone.
There is a growing number of consumers looking for innovative ways to eat without the added effort of physical shopping or meal planning. Meal service subscriptions are increasingly on the rise, up to $2.4 billion in 2021. That number is projected to more than double by 2025 and significantly outperform other business models.
Food eCommerce brands should also pay attention to the growing global health trend: 66% of modern households demand quality ingredients in their chosen brands, and are disinterested in spending exorbitant amounts of money to access them. Most consumers prefer to shop within a few miles of their home, leading them to rely on digital suppliers and online marketplaces for their health foods of choice.
Food Industry Trends to Look Out for in 2022
As 2022 enters the picture, five food industry trends will become apparent. Cocooning households will increase their social media shopping to access direct to consumer products, with increased focus on transparency and flexible payment options. We will explore each of these trends in greater detail below.
Increase in Social Media Shopping
Food and beverage consumers are projected to use social media much more heavily in 2022. Performing research, browsing profiles, and investigating brand offerings, two thirds of modern shoppers have used social media as a decision-making strategy for major purchases.
Food and beverage brands should expect consumers to take an extremely active stance in their purchasing decisions, carefully evaluating the commercial social media presence, viewing featured photos and videos, reading comments, and watching livestreams. Many consumers will expect a brand presence on more than one social channel.
In 2022, food and beverage businesses should focus on creating a cohesive brand image across all platforms, developing a meaningful message involving their USP. With more than 90% of consumers searching for authenticity in their chosen brands, social media shoppers will critically evaluate your company’s image and values through publicly available information.
Named by Faith Popcorn in 1981, the term cocooning refers to the isolative tendency of consumer behavior since the COVID-19 pandemic. Due to lockdown laws and quarantining requirements, more people are inclined to stay indoors than in previous years. Consumers would rather remain in the comfort of their own home than spend their days outside, stocking up on items through online purchases and deliveries.
Three-quarters of cocooning consumers avoid sit-down and fast casual restaurants, opting instead for the privacy of their home. This provides food and beverage eCommerce companies with enormous opportunities, opening inroads for true connection and relationships. Food and beverage brands should support these cocooning ideals, creating online communities that increase word-of-mouth (WOM) and positive consumer interactions.
Direct to Consumer (D2C)
Direct to consumer products refer to products that are sold to customers without the intervention of third parties, including retailers, wholesalers, or middlemen. 2019 saw a 45.5% increase in direct to consumer products on the market, as subscription services and mobile grocery shopping continued to pique customer interest. In 2021, the consumer’s interest in subscription services had spiked to 25% by Q4.
Brands in pre-launch stages are encouraged to consider subscription business models, as well as their mobile shopping capabilities. Easier access to food and recurring shipments may instill consumer confidence, prompting return purchases over time. Because a customer retention of 5% can increase profits by 95%, direct to consumer models are quickly becoming the eCommerce model of choice.
Flexible Payment Options
The great pivot of 2020 affected much more than consumer buying habits. Today, buyers expect nothing but flexibility in their online shopping decisions, including an increase in payment options. Some of the most favorable payment options of the past year included providers like Afterpay, Zip, Quadpay, Splitit, and Openpay.
Interestingly, payment flexibility also encourages additional consumer spending. Recent surveys found that fractional payment systems increased conversions by 20%, and boosted AOVs by 65%. At least 35% of consumers have admitted to spending more money with flexible payment capabilities. For this reason, ‘Buy now, pay later’ systems have been coined recession resistant retail programs for a post-COVID world.
Today’s consumers expect a much higher amount of transparency regarding their food, its ingredients, and their sustainable shopping process. More than 40% of consumers consider themselves to be sustainable shoppers, while 8 out of every 10 Americans use sustainability as a brand differentiator.
Online shopping in particular calls for a much more transparent ingredient list, with consumers searching for reviews and product nutrition facts online. eCommerce food brands are advised to implement transparency throughout all stages of their business model, particularly focusing on:
- Local, sustainable packaging and sourcing
- Enhanced shipping and product tracking capabilities
- Email and text alerts for streamlined, open communication
Because 94% of consumers say that complete brand transparency earns their loyalty, this 2022 trend is likely one of the most important ones to consider for an established food eCommerce company.