As part of our 10th-anniversary celebrations, the Food Strategy Associates team have reflected on 10 key changes within the Food & Drink industry since our foundation.
1. Rise of the Discounters
Aldi and Lidl have grown share from 5% to 16% over 10 years in the UK, with many more store openings planned. These retailers have >40% share in Germany.
2. The Plant-based Boom
Global plant-based meat retail sales were $5.6bn in 2021, up 100% since 2017. Plant-based milk in the US is worth $2.6bn, with household penetration of 42%
3. Small, Insurgent Brands
Share growth from small brands through lower barriers to entry (digital, channel proliferation, contract manufacturing & a ready pool of venture capital) and a mindset of meeting changing consumer needs more quickly than major brands.
4. Strength of Private Label
UK retailer private label is at 52% market share, the highest it has ever been. The US has also seen RTB growth but share is below 18%.
5. New Distribution Channels
Online Grocery doubled share in the UK over the last 10 years to 12%. Meal Kits and Rapid Delivery have blurred the boundaries between retail and foodservice.
6. Increased State Intervention
As obesity increases, with associated health care costs, governments have shown an increased willingness to intervene with policy measures. The introduction of a sugar tax in 2018, and HFSS regulations in 2022 are examples in the UK.
7. Focus on Sustainability
Eco Actives (the most sustainable shoppers) account for 18% of the global population, spending $376bn in the FMCG market. Carbon-neutral manufacturing emerged – i.e. innocent drinks’ recently-opened Rotterdam factory.
8. Plastic Packaging Shift
PET has grown share rapidly (>30% CAGR) but Attenborough’s Blue Planet 2 (Dec 2017) slowed momentum, triggering more consumers and retailers to become anti-plastic.
9. Functionality Becomes Key
Consumers increasingly seeking products that provide functional benefits (i.e. energy, protein, gut health). Grenade, Huel and Red Bull are all examples of strong functional brand growth in the UK.
10. Rise of No / Low Alcohol
30% of UK households have now purchased no/low alcohol products. This is one example of the changing habits of younger generations influencing industry innovation.