September 21, 2022

Digital technology plays a role in every aspect of consumers’ relationship with food, SIAL has found.

The Kantar Insights Food 360 Study 2022 has shown just how the global pandemic has helped introduce new habits related to food consumption, leading people to eat healthier, safer and in more sustainable ways. The results of the survey are outlined by SIAL Insights, ahead of the SIAL Paris show this October.

Digital platforms offer more ways to access products

The global pandemic forced consumers to be confined in their home. Thus, consumers used online shopping platforms to find essential household products. Digital technology gives consumers the opportunity to shop regularly while being safe and maintaining social distancing.

This will reportedly continue as the global situation improves, with new customers even in regions like Asia, where the the digital delivery market is advanced. In fact, Asia accounted for 45% of total online sales for consumer products in 2022. That is nearly double the amount in the United States and Western Europe.

In Western countries, innovative services like subscription boxes and meal kits, and improved accessibility to said services, helped keep online shopping platforms popular, according to the SIAL report.

Digital sector continues in popularity

A study from Kantar showed that the digital sector was unscathed by the pandemic. There was a 2.1 percentage point increase in the overall growth of the global food market, when comparing 2021 and 2020. There was also a 15.8% increase in global food product e-commerce during the same period.

Furthermore, an increasing number of consumers (40%) are using e-commerce platforms. Said consumers are using e-commerce more frequently, over ten times a year. In 2019, 31.6% of respondents used e-commerce, 6.9 times per year.

China and South Korea have been identified as two of the biggest users of e-commerce. There is a 88.8% and 87.1% usage rate in China and South Korea respectively, while usage rates are reported to be around 35% in Western Europe.

Quick commerce offers instant satisfaction. But what is the cost?

The report notes that quick commerce services such as Gorillas, Cajoo and Getir are flourishing in major European cities, with a sizable market for consumers who want to satisfy a particular craving, are missing an ingredient or just need some emergency shopping. In France, quick commerce makes up a 12% market share of groceries delivered to the home, and a 39% market share of groceries delivered to consumers aged under 28.

Asia is observed to be once again ahead of the curve in this sector, with certain services offering deliveries in less than 10 minutes. However, market growth is apparently slowing down, with the effects of the global pandemic being less felt in 2022. With high level of investment required for this service, there is more attention towards profitability in quick commerce.

The answer to this concern could be consolidation, the report explains. In France, the recent acquisition of Cajoo by Germany’s Flink has reduced the number of meaningful players to a handful, and not one of them a national brand. The only one to register a positive balance sheet in the country was Getir.

Traditional retailers were found to be prepared to compete with quick commerce outfits such as Gorillas and Gopuff. Said retailers are observed as being experts in brand-consumer relations, and furthermore their multichannel, “phygital” model can also be executed within quick commerce.

The SIAL report states that consumer concerns regarding corporate social responsibility, such as the place of local retail, as well as questions about the environmental impact of deliveries and the economic status of delivery staff, all strengthen the position of traditional retailers in the world of quick commerce.

Online information allows for transparency and traceability

Half of survey respondents said they actively seek out information about the food they are eating, with the internet being a crucial platform, especially through certain apps that specialise with this purpose.

Apps that analyse food labels have proved to be particularly successful with consumers. The focus is no longer on just the product, but also accompanying information that proves decisive when a customer makes a purchase. Brands and retailers know this, and have adapted by offering on-pack information that mentions supply, source and quality of ingredients.

In the future, it is thought that consumers will receive as much information as possible about the supply chain, with production and livestock conditions all to feature at the forefront of a product’s messaging.

Can the blockchain be a key asset in the agrifood transition?

With consumers becoming more and more informed, and sometimes having doubts, about the guarantees and certifications in the food industry, is there an opportunity for the blockchain to be a key asset?The blockchain offers unforgeable data that is updated in real time at every stage of a product’s lifecycle. It is a database of transaction history, distributed among users with no requirement for a “middleman”. The blockchain is also decentralised, guaranteeing end-to-end authenticity, SIAL Insights has found.

Digital blockchain solutions are already starting to emerge in the food industry, in the form of QR codes and other dedicated software. Said solutions encompass every primary product category, like eggs and milk, paving the way for the same treatment regarding more processed products.

The blockchain may develop into a key resource the agrifood transition. As leading industry figures commit to responsible practices along the supply chain, there will be a commitment to explain this in simple terms for consumers. The blockchain may be the platform where this is achieved.

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