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Which lasting effects of the COVID-19 crisis will food manufacturers factor into 2021 planning?

The food industry is near the top of any list of those most directly affected by the coronavirus pandemic. The entire food supply chain -- from farming and processing to distribution and consumption -- has been disrupted, in many cases dramatically.

While some effects may be short-term – brought about by high-risk labor pools or behavior tied to fear, health policy and social distancing that will ease as the threat is reduced – other changes will linger, perhaps even permanently.

Food manufacturers are sorting through this confusion to ensure they are well-positioned to operate effectively and take advantage of new opportunities. As they look ahead to 2021, several expected long-term effects will factor into their planning:

WHERE we eat will affect food manufacturing

Before COVID-19, Americans were spending more than half their food budgets on meals eaten outside the home. Shutdowns to restaurants, workplaces and institutions forced a drastic shift to groceries or packaged meals. While this will begin to swing back as businesses reopen, most studies indicate some of the change will endure. For example, a recent study by Hunter, a food and beverage consultancy, reports that during the pandemic, over half of American consumers (54%) are cooking more, and almost as many are baking more (46%). Importantly, more than half (51%) of those who are cooking more, reported that they will continue to do so when the coronavirus crisis comes to an end.

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WHAT we eat will affect food manufacturing

The change in where food is consumed is already having a major impact on what Americans are eating. Pre-crisis trends for fresh and healthy food were bolstered by a robust economy which has been quickly thrown into recession. Now, Americans are forced to stock up on food to avoid restaurants and repeat visits to the store, which means they are purchasing more shelf stable products. According to a report from New York-based Marcum public accounting and advisory firm, fresh produce sales in grocery stores rose just 3% from March 2019 to March 2020, compared with a 10% increase to packaged goods.

Moreover, as consumers seek solace from the crisis, they are flocking to trusted and familiar comfort food, such as peanut butter, spaghetti sauce, rice, canned beans and pretzels. With forecasters describing an economic recovery in terms of years, not weeks or months, such consumer behavior is likely to continue.

This chart from FTI Consulting, predicts the impact of COVID-19 on key food categories:


Winners Frozen will replace center-aisle staples to some extent. Center-aisle basics are often stocked in the home pantry but not quickly consumed. Frozen is easy to cook with minimal preparation.
Processed Food and Brands are back, especially if simple to cook.
Eggs will continue to receive a surge in demand because they have a relatively long shelf life and are the easiest protein to cook.
Losers Fresh is the biggest loser across the board, due to short shelf life. Too many grocery trips, too much time required to cook at home. Health and wellness will be traded off for comfort foods.
Organic is a big loser along with foods making dubious health claims not backed by science. Organic won’t fit the “fast and frugal” nature of buying.
“Free from” was a trend that assumed the consumer was skeptical of science. COVID-19 restores trust in science; expect a move away from generalized claims and certifications.
Startup brands will struggle as consumers shift from print/media to digital ads. Survival depends on ability to build new product awareness digitally.
Mixed Results
Private Label where the store has invested in a trusted platform like Great Value will win big during times of comfort and recession.
Private Label where there is no brand platform will do poorly, as these products rely on instore comparison. With quicker in-and-out shopping patterns, the consumer will shift to trusted brands.
Mindful Connection or Sustainability will bifurcate between value buyers and high disposable income buyers, but consumers will want data, not claims.

The impact on brand preferences

Consumers find comfort in brands as well, so the crisis has been a boon to some big, trusted names. Campbell’s soup, Pepperidge Farm Goldfish crackers and Prego pasta sauce saw double-digit jumps in sales. Mondelez saw demand for Oreos, Ritz, Triscuits and others grow. Big brands will surely seek to capitalize on this going forward, perhaps by more aggressively developing new products or product extensions.

However, other brands are finding new customer bases, too. A survey by Shopkick found that with so many consumers finding products out of stock, 69% bought brands new to them when their favorites were sold out. And with 29% of US consumers saying they will increase their long-term use of digital channels due to COVID-19, savvy food marketers are finding success online in generating awareness, trial and new customers for their products.

As food manufacturers plan for 2021 and beyond, some will concentrate on expanding throughput to meet rising demand. Others will focus on any and every path to improve operational efficiency. But for all of them, the implications of the coronavirus crisis are front and center.

Lee’s application engineers are experts in food processing. We can help you explore your options and develop the right equipment plan for your specific needs and objectives. Connect with us here.


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