Don’t you just love those old fashioned advertisements that pluck at our heart strings regaling us about how we used to shop and put meals on the table for the family. The classic 1970s Hovis advertisement turned out to be prescient – the boy on the bike morphing into the Tesco deliveryman and the deliveroo guy!
Within 5 years, ageing Millennials and Generation Zers will be shaking their heads and chuckling at YouTube clips of “Supermarket Shoppers as Mules” queueing endlessly to purchase groceries and, then, ferrying them across carparks fraught with danger.
Around the world, traditional supermarkets are under siege and leaking grocery market share. The antagonists are a motley crew, including:
- on-line specialists like Amazon, Alibaba, JD.com who are also taking aim at the offline side with shops that appeal to urban consumers because of their speed (Amazon Go) or the theatre and experience (Alibaba’s Freshippo);
- basic but effective hard discounters like Aldi and Lidl, and “dollar stores” (e.g. Dollar General) in the USA expanding their food offer and adding in fresh produce;
- small format convenience stores personified by the impressive 7-Eleven chain;
- “food-to-go” specialists such as Pret, itsu and EAT. in the UK (and USA) ;
- restaurants teaming up with on-line food ordering and delivery services such as Just Eat and Uber Eats, and for those appalled at food waste, the app Too Good To Go as a means of buying food that would otherwise be thrown out and is good for the pocket and for the environment;
- meal kit providers à la mass market Hello Fresh and niche Mindful Chef;
- specialty vendors of all kinds of foods linking primary producers directly to consumers (e.g. Crowd Cow in the USA with its “craft meat” offer, Abel and Cole in the UK selling premium organic ingredients, or the likes of Odd Box, another UK initiative that delivers “ugly” fruits and vegetables direct to consumers’ homes.);
- non-food retailers adding a food section – e.g. the Walgreens Boots Alliance in the USA and, of course, Boots UK has long been a significant player in food-to-go (as has news agent & book seller WHSmith), and the increasingly sophisticated convenience food and drink product ranges in petrol/gas stations (who’d of thought of buying a chocolate croissant and fancy coffee from the greasy-handed pump attendant of the 1970s?!);
- more modest local initiatives allowing us to use apps to connect with each other and swop (or unload) food that’s surplus to family requirements;
- and coming to a home near you shortly, cool 3D printers that will produce intricate fancy cakes and cookies and magic up custom-designed, multi-coloured spaghetti and pizzas.
Globally, consumers are cooking less and buying more prepared meals and snacks, and eating out more. Euromonitor International note that “the bond between consumers and meal facilitators is becoming stronger”. This is particularly the case among younger consumers who report far less time and inclination to cook than previous generations. They use their mobile phones as extensions of their bodies and as the first port-of-call for help/assistance. What’s more, they are astonishingly impatient – whatever they want, they want it RIGHT NOW! This isn’t just a smart aleck London/NYC consumer trend, it’s a global pandemic! Indeed, with regard to frequency of eating out, the “Western” world is following emerging Asia rather than leading: 60% of Thais eat out 3 or more times per week and are loathe to pop out of their home for snacks when Line Man is on hand (established in 2016 as a WhatsApp look-alike, it exceeded 1 million Bangkok customers by mid-2018 as it expanded the range of services it was offering).
This preference for uber-convenience is particularly expressed by younger consumers who view meal preparation as a very low order priority (“who has the time when there is so much to keep up with on social media?”). Of course, the dark irony is that “food and dining is becoming even more of a lifestyle, to be discussed, explored and used to define ourselves”. The preface to a meal is not a prayer of thanksgiving, it’s taking a photo of the plate to share with friends on Instagram! So, consumer interest in food, its story, food trends, and the willingness to pay a premium for food with status is growing even as the time to shop for and prepare food is being compressed. This has enormous implications for the global food and drink industry.
Demand for convenience in meal preparation isn’t a 21st century phenomenon. In the 1950s, David’s Mum would magic up Instant Whip dessert for a mid-week treat (Angel Delight in the USA). But, then, making instant pudding became too time-consuming! The last 70 years of the history of “Big Food” has been a journey of adding convenience (including extension of shelf life). In fact, this unrelenting journey has been part responsible for bringing “Big Food” to its current uncomfortable place – one characterised by slow sales growth, dwindling margins and the perception by many Millennial mummies that Big Food makes yesterday’s food.
Big Food’s megabrands have been assaulted by upstart new age food producers who cosy up to their customers with convenient, tasty products and heart-winning stories about their values and how these are commensurate with those of 21st century consumers. And of course, how “natural” and “clean” they are in many cases, and that they leave the planet much better than they found it! Just as traditional supermarket retailers are under siege, so are traditional fmcg food companies and BOTH are being attacked from all sides. An “on demand” freshly prepared food economy is emerging at the double turning fresh ingredients into meals and snacks whenever and wherever consumers require them. For Big Food’s billion dollar mega-brands, “one size fitted all” – now, the challenge is to be faster, fresher, more personalised, artisan-like but using AI and automation, and emulating fast fashion wizard Zara in shortening supply chains, and working much closer with producers.
When the focus is on providing consumers with meal and snack solutions rather than ingredients for them to prepare, power in the food industry shifts “to a new generation of companies and brands, from delivery aggregators and meal kit providers to next generation retailers, restaurant operators, and cooking equipment manufacturers, all striving to offer a wider range of prepared meal (and snack) solutions, across a wider range of occasions than ever.” (Euromonitor International). Led by Marks & Spencer (with a 50 year history of producing high quality chilled prepared meals, meal components and snacks), UK traditional supermarket companies are significantly further ahead than, for example, US supermarket retailers in responding to this challenge. For them, it’s making sure that their meal and snack products are immediately available when and where the customer wants to purchase and consume them. Proximity of store to the customer is helpful but not the end game. McDonald’s were comforted by the fact that 1 billion consumers were within 10 minutes of a Golden Arches outlet. The view was “that’s handy, it’s not far for them to drop by our restaurant”. Current senior management interpreted the proximity more perceptively as being “very handy, it’s not far for us to deliver whatever they want, whenever they want”!
Increasingly, we want more “experiences” when we buy products and services, particularly when we are in leisure mode. But, to reiterate, whatever we want, we want it NOW! Our demand for food is more complex: when we are in a food-as-fuel frame of mind, convenience is paramount (convenient to buy/prepare/consume/dispose). Our requirements are modified when food is the centre piece of a memorable gathering with friends or family. For a very few meal occasions in our week, we may well be willing, God forbid, to try out newly honed cooking skills garnered from watching cooking programmes. Then, food preparation and consumption is about celebrating the stories associated with the meal.
The decline of home cooking is not indicative of moral decay. It does reflect the reality of, in particular, urban life across the globe. Smaller households are burgeoning – single person households will increase by 30% between now and 2030, whereas those with 2 parents and children will expand by half that rate. In high income urban markets, the single person household is the dominant unit. The 1 person family isn’t going to pop home after a long working day and prepare and cook a satisfying slow-cooked shoulder of lamb! They’re more likely to eat out, buy something prepared on the way home, drop into the Amazon Go which will be at the foot of every apartment building, order something in and have it delivered, or maybe heat up some leftovers in the microwave. Then, it’s either slump in front of the screen to surf the internet, watch a lifestyle cooking programme/dream of your “Escape to the Country” (i.e. rural idyll) or some intense moments perusing a dating app – hope triumphing over experience – with the prospect that you might find a compatible mate!
Happy Easter holidays from the two of us. Miguel’s off to South Korea (he’s a kimchi aficionado and has to feed back his clients with the latest Asian trends). David is hot foot for a 6 week talking tour in SE Asia and Australia/NZ.