- Half of food and beverage leaders said manufacturers will emerge from the coronavirus pandemic stronger, according to a survey conducted by food innovation lab Mattson. Respondents said consumers rediscovering cooking at home, coupled with the streamlining of supply chains necessary to get products out at this time, create a net positive for the industry.
- Innovation is still going strong, with two-thirds working on new concepts and 65% working on new products. But many of those new products are taking longer to get to store shelves, with 57% of launches for products already developed being delayed and 53% of launches for products under development getting postponed.
- Almost half of respondents think retailers will bring in new products immediately after the threat from the pandemic subsides. On the consumer side, respondents think 39% will be looking for new products as soon as the system returns to normal. Mattson noted it has done its own research among consumers, and 58% said they will immediately be ready to purchase new products.
While most executives, food scientists and product developers are sidelined during the pandemic and working from their homes, they're obviously keeping busy. This research shows they'll emerge from the situation ready to bring new products to consumers who are anxiously awaiting them.
Mattson conducted this survey by soliciting input from industry professionals who get its weekly newsletter as well as through a couple of other trade publications. The 185 responses came in between April 8-19.
According to the survey, eight in 10 people said their companies are able to continue working on innovation and new products in home kitchens, offices and labs. Ingredients innovators including Motif FoodWorks have been successful in moving that work home, meaning once they return to the labs, they will be ready to keep moving forward.
While the study showed consumers are also ready to welcome these new products — whenever they may make it to shelves, considering many launches are being delayed — they also are rediscovering old favorites. Two-thirds of respondents said the pandemic has given a lot of legacy brands the boost they have been looking for.
But this is more than just how manufacturers feel. It's a trend that has been evident in earnings reports and balance sheets of legacy companies. In its earnings report released Tuesday night, Mondelez reported 6.4% organic net revenue growth in its first quarter.
"Our trusted brands and our taste of the nation brands bring a sense of normalcy, and we can give the consumer that normalcy with our brands around the world," CEO Dirk Van de Put said in a call with analysts.
While many consumer researchers said shoppers shifted from panic buying mode — with people clearing the shelves as many lock downs started in mid-March — into buying groceries just for the week, Big Food is continuing to reap the rewards. Comparing the last four weeks of this year with the same time last year, Bank of America analysts found large growth rates for many legacy brands. To name a few, Campbell Soup's sales are up 25.6%, Hormel's sales increased 38.2%, Conagra has seen a 30.5% bump, and Kraft Heinz sales jumped 24.7%.
But while 43% of Mattson's respondents felt nostalgia would be a top lasting food trend after the pandemic, consumers are unlikely to forget about other things they cared about before coronavirus. Clean label products have been growing in popularity with consumers. There have been some manufacturers who have worked to reformulate many of their legacy products — some almost completely behind the scenes — to replace ingredients with ones more palatable for consumers. Manufacturers who have made this investment will see it pay off after the pandemic, Mattson said.
Companies expect consumers also will be looking for products that are a good value. Mattson said 49% fall into this category, which makes sense, considering the large unemployment numbers due to businesses closing up due to the pandemic. But 27% said they also think plant based will continue to be a popular trend in food. Many plant-based manufacturers have told Food Dive their sales have been through the roof during the pandemic, while manufacturers like Impossible Foods and Just have continued with planned retail expansions.
While much of the recent sales growth for manufacturers has come out of consumer necessity — and not necessarily innovation — things will eventually begin to more closely reflect how they were before the virus even if it's clear to everyone that nothing will go back to the way it was.