2021 Food and Beverage Trends

Food and Beverage Trends are Constantly Changing!

Consumer tastes and trends are constantly changing and companies must be flexible in order to adapt to stay competitive. The start of a new year is a good time to reflect on the year prior and see what trends are will likely continue, and what is likely to change for the next year.

This is especially relevant as we step into 2021 with significant implications for the food and beverage industry. The shift from food-service to home cooking is likely to continue, as well as an increasing focus on health.

Here’s a glance at some of the most prevalent food trends to look out for this year.

The Retail and E-Commerce Take Over Continues

Over the past 5 years, spending on food between retail outlets like grocery stores and food-service like restaurants and schools were about equal was about equal. However, when COVID-19 hit, food-service spending declined 27% while retail spending on food increased by 29%. Furthermore, social distancing protocol has contributed to a rapid increase in the way consumers shop for groceries, with e-commerce now accounting for 10-15% of total grocery spend (1).

The shift from dining out to home cooking is likely to continue throughout 2021, with restaurants limited to outdoor dining or takeout only and stay-at-home orders still in place. According to Instacart’s new Harris Poll survey, 47% of all Americans (47%) say they still like to cook most, if not all of their meals, from home (2). With more and more individuals working from home, breakfast has seen a particular upsurge in popularity, with a 50% spike in search interest for breakfast recipes last year (3). Food and beverage companies now need to consider how to appeal to individual consumers and distribute products to retail locations, rather than distribution methods focused on bulk orders to restaurants, schools, and other food-service organizations.

Functional Foods For the Win

With the onset of the virus, demand for healthy foods and ingredients skyrocketed. Strong immunity remains a shared objective for consumers worldwide, with three out of ten people purchasing items tailored to improving specific health issues and 48% reporting that they plan to purchase more products related to health and wellness (4). Consumer interest in immune-boosting food and beverage is up 23 percent month over month, consumer interest in vitamin and prebiotic-rich foods and drinks are up 7 percent, and interest in gut health is up 2.5 percent (with a significant 40 percent boost in the last year) (5).

The intensifying demand for healthy foods challenges food and beverage manufacturers to develop products with ample nutrients and health benefits, while also maintaining the aesthetics of their brand and keeping costs low.

Home Cooking Gets Creative

With consumers limited to staying home, many are looking to spice up their day to day meals with unique ingredients and recipes. With the lack of restaurant dining, consumers are looking to introduce new experiences and moments of indulgence into their lives at home. Home cooks are introducing worldly flavors into their usual recipe repertoire. Early data reveals that in 2021, over one in five Americans (21%) say they have been more adventurous with home cooking by introducing exotic spices and flavors into their cooking this year, and Instacart data shows a significant spike in spices and condiments such as Piri Piri Sauce (up 725%) (2). Food manufacturers are churning out new and exciting ingredients and sauces as home-cook palates become more adventurous.

Sustainability and Consumer Connection Take Center Stage

Consumers have become increasingly concerned with the environmental impact of their product choices, and this trend expands to the food and beverage industry. People now expect to know far more about the products they purchase than what is government-required for labels. Healthline reports a 30% increase in search interest around sustainable eating, including topics like beef carbon footprint and climate change food calculator (3). Almost half of the consumers report an increase in environmental concern, with approximately 50% more Millennials, and Gen X consumers rated ‘environmentally-friendly’ among their top four food-purchasing criteria throughout 2020 (6).

This places pressure on food and beverage companies to improve their environmental impact with sustainable packaging, locally sources supply chains and upcycled ingredients. Furthermore, brands must also prove to consumers that their brands recognize the role they play in sustainability. 60% of consumers are interested in knowing more about their foods’ origin (7), making greater visibility into supply chains and sourcing more important for food and beverage professionals.

Plant-Based Products Power Up

Both movements towards sustainability and health-enhancing food and beverage products have contributed to monumental growth in the plant-based food market. Plant-based meat sales increased 38% while plant-based milk sales now represent 14% of the dairy category (8). This foreshadows the continued growth of plant-based products in 2021. In fact, the market had an estimated value of $5billion in 2019 and is expected to grow to an $85billion industry by 2030 (8).

According to ADM, 18% of U.S. consumers bought their first plant-based protein products during the pandemic. And almost all of them — 92% — say they will continue buying these products (4).  As environmentally friendly, more healthful diets prevail, the plant-based industry is likely to see healthy sales growth from not only vegans and vegetarians, but meat-eaters looking for healthy, sustainable, or adventurous alternatives. Food and beverage manufacturers are looking to introduce or expand plant-based product lines in order to remain relevant in the 2021 marketplace.

Consumer Connection and Social Responsibility

With social distancing still the norm, consumers are looking for a sense of personal connection with the brands that they are purchasing. People are seeking products that spark positive memories, celebrate diversity, and give them a sense of togetherness. Making a difference in their community is now more of a priority, and they are looking to purchase products that have a positive social impact. Beyond environmental implications, consumers want to know that the products they consume are ethically sourced and support local brands. Nearly a quarter of Americans (23%) having researched brands that are locally run or owned this year and 14% have researched both women- and BIPOC-owned brands (2). Food and beverage companies must prove to customers that they are sourcing ingredients with their social footprint in mind, with greater visibility and traceability across the entire supply chain.

Conclusion

Food and beverage companies need to keep a pulse on consumer trends and constantly innovate in order to succeed in an ever-changing marketplace. Insight into demand trends can help you identify areas of growth and improvement. Furthermore, the increasing pressures from consumers to know exactly where their food is coming from and how it is made makes supply chain visibility a top priority for 2021. Enterprise Resource Planning (ERP) technology can help solve both of these challenges and more.

Sources:

1. McKinsey: US food supply chain: Disruptions and implications from COVID-19
2. Instacart Releases First “New Year, New Cart” 2021 Grocery Trends Report
3. Healthline: 2021 Food & Nutrition Forecast
4. FoodDive: Better-for-you Trendline
5. Real Simple: 21 (Delicious) Food and Dining Trends Coming Your Way in 2021, According to Food Experts
6. 7 Food Trends You’ll See (and Taste) Everywhere in 2021
7. 5 trends fueling food and beverage innovation in 2021
8. The growth of plant-based foods