For a significant number of customers, food is considered as the fundamental component of overall health and well-being. Grocery customers are not just searching for clean-label, "free-from" foods, they're likewise looking for items with included medical advantages, for example, disease prevention, and weight reduction.
Food retail has impacted positively because of consumer demands for better-for-you products. The research firm Packaged Facts has tracked these improvements intently in various market studies on food retail. In light of this research, here are three grocery industry patterns to watch, as we look forward to what's ahead in the future.
1. Inclination towards Non-GMO and Organic Foods
With the growing priority of health and well-being for several consumers, it’s evident that the natural and organic foods market segment is witnessing a considerable growth, which is worth nearly USD 70 billion.
The U.S. retail sales for natural and organic foods heightened to a CAGR of 7% from 2012 to 2016, and by 2021, the growth is expected to double.
Non-GMO foods form a part of this trend. As per studies, all organic foods are non-GMO, but not all non-GMO foods are organic. The demand for non-GMO products can be attributed to an increasing consumer preference for healthy foods that have fewer artificial ingredients.
While the demand for such food products is increasing, food retailers are likely to face various challenges over the coming years, such as heavy discounting, industry mergers, and increased competition from Lidl, ALDI, and Amazon.
2. Probiotics Capture Interest of Millennials
In 2017, the national consumer survey stated that approximately 25% of U.S. adults prefer foods and beverages with high amounts of prebiotics and probiotics.
Probiotics are live bacteria that live in the intestines or can be found in certain fermented foods or supplements, while prebiotics are a special kind of dietary fiber that feeds the live microorganisms in the intestine. Probiotics are often found in kefir, yogurt, and kombucha. Probiotic strains can further be found in juices, snack bars, cheese, cereal, chocolate, meal shakes, and chips.
As compared to the aging population or baby boomers, the youth have a higher interest in functional foods with health-promoting properties. Additionally, probiotics are usually preferred by consumers who shop in natural food stores.
3. Significant Demand for Fresh Produce Market
In order to avoid processed, pre-packaged foods, consumers are often asked to shop the perimeter of a grocery store. As more and more people embrace this lifestyle change, foot traffic has increased along the outer aisles where fresh vegetables and fruits are sold.
In between the time period 2011 and 2016, the consumption of fresh foods grew about 1.3%. The growth of this market can be attributed to the increasing disposable income with enhanced food marketing strategies that focus on health and taste of food products.
Certain age groups can be targeted to increased sales, including parents of young children who prefer healthy foods to prevent childhood obesity. Individuals who depend on a semi-vegetarian, plant-based diet are also likely to consume more fruits and vegetables.