Can you believe Y2K and the fears surrounding it happened two full decades ago? The world has changed, the consumer has changed, and the sales process has changed—could you imagine today’s landscape back then? The market moves faster. The consumer has more options and more say. As we enter the third decade of this century, you are expected to be more flexible and in tune with customer expectations.
Brace for Growth: $2.2 Trillion More in Grocery Sales by 2024
One of the best things about the food and beverage industry? It’s built to grow. An expanding population, a growing middle class, and growth in urban and suburban markets means you reach an ever-expanding market.
In fact, within four years, the global grocery retail market will generate an additional US$2.2 trillion in sales, growing by 24%, according to the latest forecast from international research organization IGD. Driven by Asian consumers, responsible for 50% of all new sales produced between 2019 and 2024, North American and European markets will see significant growth as well, producing 12 and 16 percent of new sales, respectively.
Consumer Grocery Spending: Online Retail, Discounters, and Premium
Even for those operating strictly in a single, established market like the US or Europe, you’re looking at a piece of $300-400 billion in new money being spent in each. However, to grasp even part of this market, you still need to focus on what the consumer wants.
For example, in Western Europe and North America, customers are divergent. The rise of discount chains is pulling customers in one direction, while rising expectations pull customers in the opposite. Pair this with the rise of online retailers and manufacturers are getting pulled in three different directions.
Discounters and Deliveries Grabbing Healthy Share of Supermarkets
“Discounters and the online channel are set to be the key drivers of growth to 2024, with both gaining share versus established channels like hypermarkets and supermarkets,” according to the report. Paired with growth in online grocery fueled by improved supply chain and delivery networks, and it’s on manufacturers to understand what this means for them:
- Online retail will drive new expectations in packaging. With products going from warehouse to consumer, companies will need to think less about schematics and shelf space and more about shipping.
- To survive or thrive in discount or dollar store operations, many companies need to rethink how they will package their products. Whether that’s creating new sizes for dollar stores or working with discount stores that have more control over schematics than traditional retailers, it’s an era of change.
Higher Expectations Drive Changes in Food and Beverage
On the other end, an evolving middle class and increasing concerns about sourcing, sustainability, and health have pulled customers in the opposite direction as well. Organic options, meat-free products, and natural ingredients are becoming more popular; for example, consumers expect more from bakers and frozen food manufacturers than ever, demanding higher quality and better presentation.
Consumers Demand Sustainability and Change
If you’ve seen anything over the past five years, it’s this: Customers demand sustainability, and they have a powerful tool to make their voices heard. According to a Mintel report on the next decade of food and drink trends,
“Consumers will be hungry for leadership and demonstrable change on environmental issues, ethical business practices, public health, and other important causes. Consumers will reward brands that take action and improve important societal issues. The companies that will win in the next 10 years will be those that fuel the new era of conscious consumption. Tomorrow’s conscious consumers will be looking for eco-friendly packaging and products, while also seeking guidance on how to make their diets more sustainable.”
Sustainability has long been at the top of mind for businesses, but now that you’ve swapped out your lightbulbs for energy-efficient ones, you have to do more.
An Evolution in Packaging
“The industry fully recognizes that the production, use, and disposal of plastics and other packaging is having a real and growing impact on the global environment.” As noted in a Santander/FDF report, global consumers expect their producers to commit fully to sustainability, and this often means a new look at your packaging.
Decreased use of plastic, increased use of flexible packaging, and the use of new materials will be among the top expectations. In the coming decade, you’re going to need to understand how to balance product protection with environmental protection, lest regulators do it for you.
Demands for Environmental Sustainability
With new expectations and new demands, your consumers still expect you to do the basics right as well. Even if you can completely rebuild your packaging and deliver on consumer demands, you still need to keep your production processes pollution-free.
Any change you make to the way you operate will require you to evaluate the environmental impact. Change out the packaging, ink, or process, and you will need to make sure your pollution control equipment is able to handle it—an EPA penalty is the worst thing that can happen when you’re in the middle of a sustainability campaign.
Here for You: the CMM Group
Whether you need products designed for moving, producing, packaging, or controlling pollution, The CMM Group is there for you. Since 2001, The CMM Group is committed to providing personalized, expert advice and competitively priced solutions to a variety of equipment needs including Thermal Oxidizers, Energy Recovery Systems, Ovens and Dryers, Air Pollution Control Systems, Production Machinery and Ancillary Systems and Components.