Food and drink trends 2021: a cautious look at what’s next

Who’d want to be a food trends expert right now? Covid-19 has massively disrupted consumer behaviour, upending long-engrained shopping habits and preferences virtually overnight.

That the country now faces prolonged economic hardship further complicates the picture. How will trends such as plant-based and premium non-alcoholic spirits fare once purse strings are tightened? How much will consumers really be willing to spend on products with health or sustainability credentials once the recession bites?

In this fast-shifting climate, it’s never been harder to predict what’s next. Still, amid the noise, a handful of recurring themes and signals are coming to the fore. Here’s our pick of five key trends that we believe will define the food and drink sector in 2021.

Trend 1: Resilience shapes everything

Supply chain resilience was a common industry theme in the wake of Covid, but in 2021 we’ll see resilience take on a wider, and more consumer-facing, dimension. This will include greater emphasis on local sourcing and support for local high streets and businesses, but also health-focused products that boost immunity and improve resilience to viruses.

We also expect consumers to continue to focus on their own households’ resilience to disruption through meal planning and mild forms of stockpiling, such as keeping a well-stocked pantry of essentials at all times. The continued drive towards online shopping – which makes bulk buying easier – will further facilitate this trend.

Trend 2: Plant-based gets a value edge

Recent developments such as Tesco’s commitment to a 300% increase in plant-based meat alternatives and Asda’s launch of an ambient vegan aisle show the plant-based trend is here to stay.

To date, lots of excitement around the category has come from startups, challenger brands and premium products. But as shoppers become more price-conscious in the wake of Covid, plant-based products will increasingly need to compete on value as well as values.

Going into 2021, we therefore expect retailers and brands to start emphasising plant-based’s price advantage vis-à-vis animal-based products. Veganuary will be the first high-profile opportunity to do so, and Tesco’s pledge to “continue to invest in value so that affordability is not a barrier to buying plant-based meat alternatives” shows the direction of travel.

Trend 3: Mini occasions take centre stage

With big gatherings out, consumers will be looking to create a sense of occasion on a smaller scale. Marks & Spencer’s focus on ‘Mini-mas’ for Christmas 2020 speaks to this, and it’s a trend that will continue to play out in 2021.

Targeting mini occasions – and engineering price points down to an accessible level – will help suppliers of premium products remain in shoppers’ repertoire once household budgets are being tightened. Those that already offer products in a range of portion sizes are especially well positioned to benefit.

Trend 4: The frozen renaissance continues

Frozen has been a key beneficiary of the Covid crisis, with retail sales rising by £285m in the 12 weeks after the coronavirus outbreak. Latest data from Kantar and the British Frozen Food Federation shows this trend is continuing apace, with sales increasing by a further £221m in the three months to September.

As economic hardship looms, frozen’s affordable price points, long shelf life and low waste levels will continue to be highly compelling to consumers.

New premium entrants, including the likes of Leon, and on-trend NPD such as Birds Eye’s Green Cuisine range are also helping to dispel the category’s reputation as outdated and ‘cheap’.

Trend 5: Meal kits satisfy restaurant cravings

Storm clouds continue to gather for the hospitality sector, with the government’s new three-tier system spelling prolonged uncertainty for restaurants, pubs and cafés. Eating out in this climate will remain a challenging experience.

Meal kit services are perfectly placed to satisfy consumers’ desire for ambitious dishes and restaurant-quality ingredients in the comfort of their own homes, while also tapping the trend for scratch-cooking.

We expect to see more tie-ups between meal kit providers and restaurant brands, giving consumers everything they need to recreate favourite dishes at home. Recent media reports indicating buyer interest in Mindful Chef also suggest that major grocery brands continue to see the sector as a big opportunity.

At the same time, direct-to-consumer channels will remain essential for restaurants and chefs. The online marketplace recently launched by James Martin, providing a showcase for smaller producers supplying the restaurant trade, speaks to this, while ‘virtual restaurant experiences’ and live cookalongs will allow hospitality businesses to stay connected to customers while restrictions are in place.

Food for thought

Spotting interesting trends and finding noteworthy food facts and figures is a big part of what we do at Ceres. Here are 10 recent articles, reports and long reads that made us stop and think.

Shrink a growing problem: ‘Shrink’ – that is, product loss from factors such as damage and expiry – is soaring in the wake of Covid. Before the pandemic, shrink consumed 2-3% of a typical grocer’s revenue, according to McKinsey, but is rising in categories where shopper needs and preferences are changing rapidly. “In ready-to-eat and ready-to-heat, for example, shrink has risen to 5-15% of revenues, significantly eating into profits.” [Source: McKinsey]

A spotlight on hunger: 2019 was the hungriest year on record and 2020 is set to be even worse thanks to the coronavirus crisis. The UN’s World Food Programme, which has just been awarded the 2020 Nobel Peace prize for its efforts to fight global hunger, estimates the number of hungry people worldwide could double from 135 million in 2019 to 265 million at the end of this year. [The Economist]

4 for Life: Fifty percent of the UK’s veg intake comes from just four varieties – tomatoes, carrots, peas and onions. That’s according to the British Nutrition Foundation, which is encouraging UK consumers to eat a greater variety of veg. Leafy green veg in particular are absent from many people’s diets. [BBC Food]

Rise of insect protein: The worldwide market for edible insects was worth $112m in 2019 and is projected to reach more than $1.5bn by 2026, according to Global Market Insights. Nine million Europeans tried eating insect products in 2019, according to the International Platform of Insects for Food and Feed (IPIFF). [Source: FT]

Retail innovation labs: As retailers and fmcg brands seek to adapt to new ways of shopping, many are using dedicated retail innovation labs to experiment with new digital formats. This is a useful overview of notable examples, including Coca-Cola’s KOLab Collaboration Centre, Walmart Global Tech and Tesco Labs. [Source: CB Insights]

Spud history: Most potatoes on sale in supermarkets today can be traced back to a single Chilean island. [Source: 1843 Magazine]

Troublesome honey: Honey is the world’s third-most-faked food, after milk and olive oil, according to the Food Fraud Database run by compliance management company Decernis. The Honey Authenticity Project puts the proportion of fake or adulterated honey at 33%, while a 2018 study of honey sold in Australia found 27% of products were faked or adulterated. [Source: Insider]

Kombucha has growth appeal: The European kombucha market was worth £180m in 2019, according to Market Data Forecast. By 2025, it’s expected to be worth £580m, with the UK a strong driver of growth. [Source: The Grocer]

The lure of CBD: A growing number of venture capitalists are leaving tech for higher growth opportunities in CBD. The European CBD market is worth €450m at the moment, according to Orian Research Group, but expected to grow to at last €1.5bn by 2023. [Source: Sifted]

Gender gap in the meat sector: Women make up just 36% of the meat industry workforce and are under-represented at every level above junior positions, a new independent report across the UK, Ireland, USA, New Zealand and Australia has found. Crucially, women hold just 14% of board-level director roles and only 5% of chief executive roles. [Source: Meat Business Women]

Get the next edition of our Ceres Newsletter

FRESH