Welcome To Industrysourcing
      
Home >News>News Details

In the midst of global upheaval: Three key trends impacting the F&B landscape

Source:Simon-Kucher & Partners     Date:2022-04-11
Share to Wechat



Exclusive report for Food Manufacturing Journal-Middle East

Input from:  

Farah Thalji, Director, Dubai office, Simon-Kucher & Partners

Mohit Agrawal, Manager, Dubai office, Simon-Kucher & Partners



The world is changing quickly. From the Covid-19 pandemic to the Russian invasion of Ukraine, there have been several significant moments of global upheaval in the past few years alone. Couple this rapidly changing landscape with accordingly evolving consumer values, players operating across the F&B value chain are being forced to adapt just as fast.


Against the backdrop of global crises, Simon-Kucher and Partners discuss how we can expect to see pivotal change reflected in the F&B landscape in upcoming years.

 

Conscious living and eating

Where does our food come from? How is it grown? Who are we paying to get it? Questions like these are being posed more and more often by discerning consumers at every level of the F&B value chain. Conversations about the climate crisis, animal welfare and ethical practice are getting louder. Consequently, consumers are looking to alternative diets – the number of vegans in Europe is estimated to have doubled in the four years to 2020.


Meanwhile, the Russia-Ukraine crisis has sparked fears of a global food crisis, disrupting the production of essential commodities like fertiliser and wheat, and driving up food prices worldwide. Russia and Ukraine collectively accounted for nearly a quarter of the world’s grain exports in 2021-22. Countries are now reviewing their supply options, turning to other wheat producers like Argentina.


Photo_Simon-Kucher & Partners.jpg

(Photo courtesy: Simin-Kucher)


But the crisis is already threatening food shortages in many countries in North Africa and Middle East that are particularly reliant on Ukrainian agricultural exports. About 80% of Lebanon’s wheat comes from Ukraine, while half of Egypt’s sunflower oil is imported from there.


As the desire for healthier, environmentally-friendly food products increases, so too do their prices. The F&B industry needs to address these issues in order to find the balance between consumer desires and a sustainable price point.

 

Swift technological advancement

Not only do consumers expect their food to be fairly sourced, fresh, and affordable, they expect it to be delivered quickly. Cloud or “ghost” kitchens are becoming more prevalent in order to match the pace of food technology advancements, and have proved an aggressive competitor to traditional models. Lower startup costs, cheap rent, increased efficiency and the ability to host multiple brands are just some of the benefits cloud kitchens offer delivery services.


Food providers are changing the way they operate in response to demand for food delivery in the wake of the pandemic. A shift toward working from home, as well as major financial losses for sit-in eateries and company caterers, has seen even more investment in food delivery services. The global cloud kitchen industry is expected to grow by over USD 70 billion by 2027.


Competition in the food service sector is becoming ever fiercer, and traditional restaurants and kitchens may struggle to keep up. They should explore in-house or outsourced cloud kitchens in order to strike a viable financial balance between overhead costs and the revenue opportunities presented by lean service models. And as the impact of the Russia-Ukraine crisis on the food chain implores both consumers and F&B players to examine their expenditure more closely, these revenue opportunities have never been more attractive.

 

Increasing demand for personalisation

From product recommendations to targeted promotions and direct lines of communication, consumers have come to expect a personalised experience when interacting with companies. This trend has already changed the relationship between F&B players and consumers – with the explosion of online grocery shopping, customised ready-meal subscriptions and social media campaigns.

Over 90% of global consumers say they are more likely to shop from brands who value them and offer personalised recommendations and promotions. But finding the balance between leveraging collected data to better target customers and using data irresponsibly in a way that turns consumers off is tricky.


90% of consumers say they would willingly share their data with companies if it makes their online experience easier and quicker. However, 87% say they would not interact with a company if they do not trust their security practices. Similarly, while customers appreciate tailored communications, most are quickly frustrated by irrelevant emails.


Data usage is inevitably discussed in the same breath as data leaks and broader cyber security. Particularly during times of conflict, consumer trust can be lowered. F&B businesses need to invest in their modes of personalisation while ensuring they do not overstep boundaries. Customer centricity is imperative.


Turning risks into opportunities

While the F&B industry is affected on many levels by the swiftly changing global circumstances, players can also take advantage of certain opportunities for growth. Learning to adapt to the obstacles presented by events and conflicts that affect the food chain worldwide will be invaluable as these trends are likely to become even more established in 2022.



Simon-Kucher & Partners, Strategy & Marketing Consultants:

Simon-Kucher & Partners is a global consulting firm with more than 1,600 professionals in 42 offices worldwide focusing on TopLine Power®. Founded in 1985, the company has 35 years of experience providing strategy and marketing consulting and is regarded as the world’s leading pricing advisor.







Member Login
Back To The Top