What and how shoppers consume is changing. Health & Wellness, two factors that have been impacting on the beauty & cosmetics sector already are being felt in the grocery sector. Clean eating habits have seen changes in consumption patterns, while the number of people following a plant-based diet is growing, as they either switch completely to a vegan or vegetarian diet or do so in a flexible way. The market for organic products is growing as well.
In France, new products have just six months to prove themselves on the shelves of supermarkets before being replaced with something else. If they are not healthy they also stand less chance of being introduced to customers in the first place. The Nutri-Score, which is included on packaged goods, holds sway in the country with grocery buyers not giving consideration to products that do need meet a certain health score. (France’s Nutri-Score gives an A-E ranking based on the amount of ingredients to avoid, such as sugar, saturated fats and salt, compared to the positive ones of fibre, protein, fruit, vegetables, nuts of oils. In this way, consumers can see easily which products offer the most benefit.)
HelloFresh, and other meal kit companies, offer an easy way for people to eat differently without having to shop for alternative ingredients. The growth of these companies is not slowing down. In fact, HelloFresh is in the process of doubling its tech team, taking on 1,000 people and testing meals based on different dietary requirements and price points. This is on top of expanding into delivery of general grocery items.
Following huge growth in 2020, which saw revenues doubling, HelloFresh posted strong results of €1.56bn revenue growth and more than 30 million orders for the second quarter of 2021.
The company highlights how the demand for meal kits remains high despite pandemic measures being overturned.
This increase of different companies and new models taking incremental sales away from the major grocers is making them look differently at their overall offering in terms of what they sell and how it is sold.
The move towards Health & Wellness may not be new – Rewe has been selling fresh and healthy ready-to-eat products since 2009. It’s Rewe To Go chain offers an alternative to fast food restaurants, takeaways and bakeries – but it is a trend that is not going away. In fact, it has been emphasised by the pandemic, as has consumer concern for the environment. Together these factors complement each other and are being bought into a single sustainability umbrella by grocers.
For example, at the start of 2021, ICA launched a programme covering physical well-being, mental well-being and the use of antibiotics in animals. This is on top of new climate targets as the grocer has already reduced its greenhouse gas emissions by 76%, against a base year of 2006. Its ongoing innovations in plant-based food production will contribute towards the group’s ambition to halve the impact of customers’ grocery purchases by 2030.
This feature was originally published in the Grocery 2021 report. Download the full version here for bespoke insight into the wider Grocery sector, including growth vectors, leading retailers and case studies.
