This briefing provides updates on Euromonitor’s March 2021 forecast restatement for the packaged food industry, deciphering how the industry is navigating the pandemic, changes from baseline projections and highlighting future risks and opportunities.
This report comes in PPT.
Euromonitor’s 2021-2025 baseline forecast for the packaged food industry, published in October 2020, has been revised in line with the new macroeconomic update. The global industry forecast over the next five years remains largely in line with initial expectations, albeit a slight CAGR downgrade of -0.1pp between 2020 and 2025.
Category-wise, milk formula has recorded the largest forecast upgrade this quarter, mainly driven by Hong Kong, given the better forecast recovery than expected as cross-border activities with mainland China reopen. In terms of downgrades, savoury snacks has recorded the biggest change. The US and India are the key markets driving this adjustment.
The increase in home-cooking seen during 2020 is expected to be maintained in the coming years to some degree, which is set to benefit cooking aids such as sauces, dressings and condiments. Convenience is king though, and ready meals and convenient meal solutions have a bright future ahead. Investments by strongholds in the industry, such as Nestlé in DTC meal kits and prepared meal businesses, shows the interest in this space.
Consumers are increasingly demanding targeted functionality as a key component of wellbeing, which is set to continue to benefit functional foods, with a key focus on immunity, gut health and mood-enhancement. Plant-based trends will also continue to disrupt the packaged food industry, spurring innovation across categories.
Together with this, e-commerce is accelerating at an all-time rate, and food players are prioritising this channel at the top of their corporate strategies, including DTC models and partnerships with third-party delivery businesses.
In packaged food we consider two aspects of food sales: 1) Retail sales. 2) Foodservice. Retail sales is defined as sales through establishments primarily engaged in the sale of fresh, packaged and prepared foods for home preparation and consumption. This excludes hotels, restaurant, cafés, duty free sales and institutional sales (canteens, prisons/jails, hospitals, army, etc). Our retail definition EXCLUDES the purchase of food products from foodservice outlets for consumption off-premises, eg impulse confectionery bought from counters of cafés/bars. This falls under foodservice sales. For foodservice, we capture all sales to foodservice outlets, regardless of whether the products are eventually consumed on-premise or off-premise. Foodservice sales is defined as sales to consumer foodservice outlets that serve the general public in a non-captive environment. Outlets include cafés/bars, FSR (full-service restaurants), fast food, 100% home delivery/takeaway, self-service cafeterias and street stalls/kiosks. Sales to semicaptive foodservice outlets are also included. This describes outlets located in leisure, travel and retail environments. 1) Retail refers to units located in retail outlets such as department stores, shopping malls, shopping centres, super/hypermarkets etc. 2) Leisure refers to units located in leisure establishments such as museums, health clubs, cinemas, theatres, theme parks and sports stadiums. 3) Travel refers to units located in based in airports, rail stations, coach stations, motorway service stations offering gas facilities etc. Beyond the scope of the foodservice research are captive foodservice units that serve captive populations around institutions such as hospitals, schools, and prisons. This is also known as institutional sales.
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