Having a well-stocked, friendly neighborhood supermarket nearby has always been essential. But the events of 2020 demonstrated in no uncertain terms just how important a service U.S. grocery stores provide.
U.S. grocery-sector revenue rose by as much as 10% year-over-year in 2020, according to a Bain & Co. report published last November. As the country settles into a new year, savvy grocers will understand how the trends of 2020—plus others percolating long before—continue to shape shoppers’ choices. And that should help them shape their product selections to match.
Shelley Balanko, Ph.D., senior vice president of The Hartman Group, keeps a close eye on supermarket trends. She sees “positive signs all around—for grocery in general, and in particular for natural and specialty outlets” because consumers continue to buy most of their food from retail stores, she says. Although the consultancy’s Compass Database showed a year-over-year decline in the proportion of eating occasions sourced from foodservice in 2020 (from 21% to 19%), its recent Food Sourcing in America 2020 study showed that retail, natural and specialty grocers enjoyed especially robust growth as the year progressed.
Change for the better
The key theme animating consumers’ grocery purchases in the last year is a renewed focus on health and wellness.
“With so much still uncertain, prioritizing health and wellness remains a mission with shoppers,” says Jeffrey Crumpton, a retail business consultant with SPINS. “Retailers are picking up on that, as we continue to see natural, wellness-oriented products outperforming their more conventional counterparts across channels.”
Among the pandemic’s long-term effects on food retailing might be a sustained change in category focus. Consumers continue to demand more items that they believe will improve their health and hygiene, according to Deloitte’s “Understanding the Impact of COVID-19 – Grocery & Food Retail” report.
Balanko believes this shift will persist. “The pandemic has been a lesson in prevention and resilience,” she says. “At [its] onset, 30% of consumers told us that immunity had become a greater concern. As we move further into 2021, we anticipate seeing strong continued interest in eating with immunity in mind—a prevention mindset.”
When today’s consumers purchase better-for-you products, they’re not just thinking about their own health; they’re acting in the interest of the planet’s as well. “Making environmentally friendly choices is likely to prevail even when shopping behaviors return to normal, as the lockdown and the pandemic have given many consumers a chance to pause and rethink their own consumption patterns,” Deloitte reports.
Yet conscious consumption “is about more than a price-quantity calculus,” Balanko says. “Our Food Sourcing in America 2020 study shows that community-oriented considerations have risen in importance since 2017, with 8% of shoppers listing ‘environmental/ethical concerns’ and 6% including ‘social justice’ among their top five purchase influencers.” Subjective elements of value, such as experience and relevance” are becoming priorities for consumers, she adds.
Closely allied with sustainable shopping is the trend among consumers—including omnivores—of putting more plant-based products in their baskets. “As consumers become more health conscious and turn to foods with wellness benefits, they’re choosing vegetarian and plant-based foods at higher rates than ever before,” says Xavier Unkovic, president and CEO of Amy’s. “What was once fringe is now mainstream.”
“While plant-based eating appeals to consumers up and down the age scale, it’s a veritable movement among younger consumers, millennials and even GenXers,” Unkovic adds.
None of which comes as a surprise to Crumpton. “We continue to see innovation in response to how consumers prioritize food,” he says. “They’re becoming educated about plant-based and understand its benefits. As a result, we’re looking at 20% to 30% growth within the plant-based space.”
As the category matures, “consumers will be savvier shoppers of plant-based meat and dairy analogs,” Balanko says, “and will look for sustainably and ethically sourced ingredients, minimal processing and products that meet their needs for exploration and discovery.”
That translates into “more-authentic offerings” that reflect cultures where plant-based eating is de rigueur. “Southeast Asian cuisines, for example, traditionally deliver highly in that regard,” she explains. “As plant-based mainstreams and consumer preferences evolve, the offerings must evolve accordingly.”
Amy’s plant-based products “have always reflected flavors and cuisines from around the world,” Unkovic points out. “Many of our dishes are inspired by our founders’ travels to places like Mexico and India. We also collaborate with local chefs and cooks to come up with our recipes and ensure that authenticity. This year, we’re exploring more international offerings and looking to regions across Asia, South America and Africa for inspiration.”
Enabling smart choices
Grocers can stock products in a way to reflect these and other prevailing trends.
For one, they can turn to convenient, sustainably produced frozen options that meet consumers’ needs on all fronts.
Crumpton calls the frozen sector a “bright spot” in supermarket sales, noting that frozen options offer consumers an easy way to eat healthfully, mindfully and without much prep. “You can pick them up, put them in the freezer and source them for a quick, nutritious dinner.”
Balanko agrees, noting that the pandemic helped consumers “rediscover and experience the frozen aisle in a new way, with many of the innovations that occurred in the space over the past few years really resonating,” she adds.
Retailers can also point consumers toward products and brands that share their values by leveraging in-store communication and building end caps that promote those brands. “This makes the shopping process easier and clearer for this growing conscious consumer base,” Unkovic says.
Leveraging the reputation of B Corp certification is “another great indicator for consumers seeking socially responsible and ethical companies,” he continues. “We’ve seen some early success with retailers who call out B Corps among their selection. By curating this excitement within a routine shopping aisle, retailers not only simplify mindful shopping but enable the discovery of other like-minded brands and products.”
The lesson: There’s no reason for grocers to let this moment pass. “Retailers are one step closer to consumers than brands are,” Balanko says, “Retailers can be trusted partners in consumers’ lives if they demonstrate that they share consumers’ values.”
And if they stock their shelves accordingly. Convenient, sustainable, nutrient-rich options from Amy’s Kitchen check conscious consumers’ most important boxes across dayparts. From vegan and kosher to gluten-, dairy- and soy-free, Amy’s Kitchen has offerings to suit a variety of needs and preferences—and the flavor and quality that keeps shoppers coming back for more with some of the highest repeat purchase rates across the category. To learn more about Amy’s offerings, current trends and opportunities for category growth, visit tradeinsights.amys.com