How market trends have evolved during COVID-19
Market trends do not appear all of a sudden. Neither do significant trends fade in the short term. While the COVID-19 pandemic has affected us to a great degree during a relatively short period of time, many of the trends that it has affected were present before the outbreak. However, COVID-19 has accelerated some previously existing trends enormously. Developments that before the pandemic were expected to take years, have taken place in just a couple of months.
Consumer dietary lifestyles influenced by health matters, the environment and COVID-19
Unsurprisingly COVID-19 remains among the key influences on consumers’ lifestyle as we move further into 2021. Interest in “preventative health” is steering consumers towards healthy eating patterns. A new major global study by Bord Bia across nine key markets, including Ireland, highlights the macro themes driving dietary lifestyles. These are:
- Back to Basics
- The Environment
Balance underpins these five themes.
Dairy sales in Ireland keep growing strongly during COVID-19
Market researchers NielsenIQ noted a 13% value growth for Irish consumer packaged goods in 2020 after very strong Christmas sales. Going into 2021, we are still seeing significant growth trends, with some dairy categories performing well. Over the 52 weeks to 31st January, Milk grew by 10% while both Cheese and Yellow Fats (butter, margarine and vegetable oils) recorded 15% year-on-year growth. However, in March/April it is likely that we will see a slowdown as the effects of COVID-19 on the market with movement restrictions and school closures annualise.
Food and drink retail growth globally
Most food retail markets across the globe experienced accelerated growth during 2020 as consumer spending on food and drink shifted from out-of-home to at-home. Several factors have underpinned and maintained a degree of elevated growth:
- The surge of demand that occurred at the start of 2020
- Restaurant and foodservice closures
- Periodical lockdowns and second/third waves of the pandemic
A high degree of volatility and uncertainty will continue to characterise the next two years. Looking at the global picture, grocery sales are expected to show continued growth in 2021, albeit at a slower pace than in 2020, before returning to pre-COVID growth in 2022.*
Irish consumers are interested in supporting local and sustainable
Over the last year, we have seen several reports highlighting how the pandemic has changed Irish consumers’ shopping habits. Supporting local shops and businesses is one of the major changes pinpointed. Increased focus on sustainability is another one. According to NielsenIQ, 67% of Irish shoppers agree/strongly agree that they try to choose products made in Ireland. More than 60% say that they try to choose products from the regions where they live.
The online grocery sales boom
One of the major trends during COVID-19 has been the rise of online grocery shopping. Adults of all ages, including many over 65s, discovered this channel particularly in the first half of 2020. Online grocery shopping continues to grow with penetration among Irish adults reaching a new high of 21% in January 2021 according to Empathy Research. This represents a significant increase from the 11% level in mid-April 2020.
Market players, including Glanbia Ireland with its mymilkman.ie offering, had to adapt quickly to the signing up of large numbers of new customers and provide delivery slots for everyone. Many of the new online grocery customers discovered the safety and convenience of having food and drink delivered to their doorstep.
Outlook for 2021 and beyond
Without a doubt, COVID-19 has changed the way we live permanently. Some of the trends that accelerated quickly in 2020 will slow down once vaccines are rolled out and markets open up again. We might not see trends like home cooking and baking continue into 2022 but consumer focus on health, natural products and the environment is likely to remain for a long time.
Also, consumers have discovered that supporting local/regional brands and businesses is a good thing. In consumers’ minds, dairy remains as a key and versatile source of nutrients. And (of course), online grocery shopping is so far showing no sign of slowing down.