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Retail

Experimental Eating – How Food Brands Can Ride The Innovation Wave

By Steve Wynne-Jones
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Experimental Eating – How Food Brands Can Ride The Innovation Wave

Kim De Maeseneer, Head of Accenture’s Consumer Goods & Services industry group in Europe and Laurent Thoumine, Head of Accenture’s Retail industry group in Europe, examine why food brands and retailers should ride the innovation wave to emerge stronger post-pandemic. This article first appeared in ESM Issue 5 2021.

Food brands and retailers have had to adapt to a dramatically different trading environment this past year. The pandemic has created so much uncertainty—and continues to do so—and the ripple effects will be felt across the industry for some time.

However, as patterns of consumer behaviour start to settle and new habits become entrenched, clarity about the future shape of the industry is starting to emerge. So what can we say about the priorities for both brands and retailers?

What Will Post-Pandemic Consumers Want?

The huge acceleration in digital engagement has already been much discussed, with online sales booming and set to remain above pre-pandemic levels for the foreseeable future.

Among new or low-frequency e-commerce shoppers, for instance, purchases for food to cook at home grew by 333% over the course of the pandemic.

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It’s important to recognise how this step change in digital shopping goes hand in hand with a series of other behavioural shifts, especially when it comes to food choices. For example, Accenture’s research shows shoppers are more conscious of the sustainability of their consumption. Over half say they’re now more focused on the environment than they were before the pandemic.

They’re also looking for food companies to help them make the right choices—over two-thirds want brands to make it easier to consume more consciously, for example. Being able to have a genuine two-way conversation with consumers across digital channels is a key way of doing that.

In addition, there has been a big push towards healthier living, with consumers taking a more holistic view of the connection between consumption and their mental and physical wellbeing. A large majority (70%) of people say they’re looking to make a fundamental change in their approach to their health.

But this needs to be seen in context—most people are still seeking a little comfort and indulgence in the food they buy, and all the more so after the difficult 18 months they’ve just been through.

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Future Trends In Food Innovation

The impact of this evolution in consumer priorities can be seen in the growing popularity of innovative business models and consumer engagement strategies in the food and beverage sector.

Accenture has been tracking these trends since 2016, and in all cases the proportion of consumers for whom these are influential factors in their buying decisions has increased dramatically—especially in the last year.

For example, replenishment subscription models are now a key consideration for a quarter of consumers (double the proportion in 2016). This can be seen as part of the broader wellness drive, with regular deliveries helping control consumption and keep temptations at bay. India’s Milk Basket doorstep deliveries are a great example of the huge global potential here.

'Do it myself' models, such as meal kits, are another rapidly growing trend, with over 60% of consumers now considering them at least occasionally. Nestlé, for instance, invested in Mindful Chef, which provides convenient chef-inspired meal kits with the added benefit of no-waste ingredients.

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Convenience Still Rules, But…

Of course, convenience remains a key factor for grocery shoppers. You can see this with the increasing popularity of the 'do it for me' concept, where established or up-and-coming restaurants offer carry-outs and/or deliveries. But it’s the combination of convenience with other benefits like sustainability that seems to be particularly powerful.

This is evident in the rise of grocery services like Imperfect Foods. The company selects 'ugly' fruits and vegetables that have been rejected by grocers, but which are otherwise perfectly good to eat, and delivers them directly to customers’ doors—meeting consumer needs for affordability and sustainability, as well as convenience.

Deliveroo is another great example. The company is bringing a healthy eating concept to its established food delivery platform. Its ecosystem has broadened to include food brands and supermarkets with no previous direct route to consumer homes, as well as healthy food start-ups like the UK-based Clean Kitchen Club.

...Digital Solutions Will Predominate For Now

As well as being at the forefront of the drive to expand direct-to-consumer channels, subscription models, and smart home-delivery options, food brands and retailers are also leading in areas like digital chat services and video tutorials. These kinds of services will be just as important after the pandemic subsides.

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Of course, physical retail will still be a key part of business strategy, but we should expect to see a lot of activity in the fusion of digital and physical experiences.

Accenture’s Business Futures report found that retailers and brands are doubling down on virtual technologies to create 'Real Virtualities', defined as digital environments that are increasingly realistic, engage all senses, and create a greater connection to the physical world. Nine out of 10 C-suite executives of retail and consumer goods companies said they are investing in technologies to create virtual environments, and plan to invest further.

Going forward, we can expect to see food brands and retailers looking for ways to drive a much stronger sense of digitally-added value in high-street retail locations. By using technology to personalise the experience—think personal health analysis and individually tailored products, for example—brands can provide a more 'science-driven' answer to consumer needs.

Decode The Signals And Ride The Innovation Wave

As to the key to capitalising on emerging trends like these? Being able to spot and decode the behavioural signals around changing consumer attitudes to food and beverage products as they happen. And then, to use data insights and digital technology to rethink products and services for a new set of consumer priorities.

Ultimately, it’s this ability to move quickly, innovate at pace, and live up to the brand purpose, that will see food brands through the present uncertainty and help them emerge stronger on the other side. The goal is to combine traditional benefits like convenience with new consumer needs in areas like natural resource efficiency, nutrient goodness, social awareness, and ethical practices.

Above all, it’s worth remembering that times of great disruption can also be times of great innovation, as businesses are forced to radically rethink the way they operate. That’s where the food and beverage industry finds itself today. There are huge opportunities for those that have enough organisational agility to ride the food innovation wave and respond quickly to changing consumer needs.

© 2021 European Supermarket Magazine. Article by Kim De Maeseneer and Laurent Thoumine. For more Retail news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.

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