Feature

The biggest driver of sales growth in 2016: Convenience

Data shows products that touched on this and other top food trends found their way into more shopping carts

Manufacturers, retailers and trend-spotters placed their bets on what would drive the food and beverage industry in 2016. Looking back at the year in sales growth, were those wagers wise?

Convenience is among the most common themes across the fastest-growing categories by dollar sales. But other factors, ranging from niche trends and unsuspecting winners, also impact these final results.

The common theme? Convenience

Looking at the categories in food and beverage posting the highest sales growth in 2016, most have one overarching thing in common: convenience. According to Nielsen data provided to Food Dive, the fastest-growing food and beverage categories with more than $10 million in sales in the 52 weeks leading up to Oct. 29 included:

  • Refrigerated breakfast entrée (82.3% dollar sales growth)
  • Frozen gravy and sauce (42.2%)
  • Frozen meal starters (33.6%)
  • Refrigerated appetizer (27.2%)
  • Liquid tea (19.8%)
  • Sushi (16.1%)
  • Liquid coffee (14.2%)
  • Lunch combination (13.8%)

In the case of prepared foods — like sushi or refrigerated appetizers and breakfast entrees — the meal or snack is essentially ready to eat. Categories like frozen meal starters and sauces make meal preparation faster and easier. Liquid coffee and tea are easier to transport and drink on the go.

“Convenience is driving a lot of what we're seeing to be flying off the shelves in stores,” Jordan Rost, VP of consumer insights at Nielsen, told Food Dive. “It's really shifting a lot of the balance of power, and this is a trend that has continued for a little while now.”

A recent report from the U.S. Department of Agriculture supports these insights and sales statistics.

Convenience also intersects more frequently with better-for-you foods and beverages, such as healthier snacks or value-added produce.

“It really speaks to people want to live more healthfully and eat more healthfully, and fruit that's already cut up for them is a great and convenient way to do that,” said Rost. “Consumers still want all the other things they are looking for in food, but that extra layer of convenience is still a priority.”

The rise of sushi and retailers’ prepared foods

The convenience factor across these categories comes from more than manufacturers looking for ways to make meal preparation and consumption faster and easier. Retailers play a critical role too, particularly through their deli and prepared foods departments. Grocery prepared foods can be a middle ground for consumers between going out to eat and enjoying a meal prepared at home.

sushi
 

Sushi, which aligns with consumers’ desire for convenience, fish-based protein and multicultural flavors, is emblematic of all of these trends.

“So many different consumers are going to the deli department and looking for the prepared sushi selection, and that's not just a niche offering,” Rost said. “It really has become much more of a mainstream experience, and I think it does speak to the changing nature of the multicultural landscape of the way that we're all eating. …(Sushi) is not that exotic thing anymore. It really does become a bigger, more widely accepted part of all the things that we're eating.”

How niche trends can drive category growth

Liquid RTD tea and coffee are also aligned with the convenience of many of the fastest-growing categories. However, niche trends may be driving their growth even more.

cold brew coffee
 

“You're seeing things like kombucha or cold brew coffee really drive those categories,” said Rost. “There's a lot of innovation happening there, and they say that does relate to health and wellness. But you really do get to see those trends that show up in terms of having a material impact on growth and fundamentally redefining the different categories.”

When niche trends become more mainstream, category growth flourishes.

“We probably have seen cold brew go a bit more mainstream than kombucha at this point," Rost said. "But that's something we will be looking at in the next year to see to what degree do these trends actually make their way across more of America and start to become more mainstream.”

Why frozen foods are among both the winning and losing categories of 2016

Frozen foods were an intriguing dichotomy in 2016, appearing with both the winning and losing categories of the year. Frozen foods had lost market share in recent years, in part because of a perception they were highly processed foods with fewer healthy ingredients.

Responding to this backlash, several frozen foods brands — from Nestle’s Lean Cuisine and Pinnacle’s Birds Eye to B&G’s Green Giant — have made efforts to turn around the category through ingredient and marketing innovations.

But certain fundamental components about the frozen category have made these products both slow- and fast-growing.

“Being frozen appeals to the idea of convenience, especially in the case of meal starters — you can get dinner together more quickly,” said Rost. “What we're seeing is that frozen is still great way to get a meal going, and then you can incorporate other ingredients, maybe fresh produce, or other parts of the store that round out that meal.”

frozen dinner
 

While many frozen category sales growth stats may suggest the eventual death of this category, many experts don’t feel the same way. The frozen products that find a way to be healthy and convenient meals, while dodging common criticisms from health-conscious consumers, may have staying — and growing — potential.

“There is definitely not a wholesale shift away from frozen, but in fact we're seeing growth within frozen of things like natural and organic,” said Rost. “You do start to see less of a departmental-wide change and much more of a nuance appeal that each individual category, each individual product, does offer to different consumers.”

Looking at these sales statistics and product category growth doesn’t always demonstrate the entire picture of the food and beverage industry.

“Many of the categories that we see there [at the bottom] are really being hit by deflation,” said Rost. “A lot of the declines we're seeing is not necessarily because of consumer demand declining but really just because of the economics of how those departments — their margins are thinning.”

“There is opportunity within meat and dairy and all the other categories where we have seen decline, above and beyond frozen, to start winning back some of that share because consumers are actually able to buy more of those things because prices have gone down from the consumer perspective,” said Rost. “We'll start to see a really interesting shift into next year as supply and price pressures potentially start to level off. We'll have to see what next year brings.”

Filed Under: Manufacturing Grocery
Top image credit: maklay62