As food delivery apps and online ordering proliferate, the trend may eventually lead to significantly fewer people cooking at home. According to a UBS report cited by Business Insider, online food delivery may eventually comprise 10% of the total food services market, which would mean a jump from $35 billion in market share today to $365 billion by 2030.
Millennials are three times more likely to order food for consumption at home than their parents due to the convenience factor, the report noted, especially as more restaurants have the option of delivering food. But, as costs drop, especially if delivery drones and robots are used, ordering in may become so cheap that nobody will be making their own meals.
The business publication noted that UBS said companies that rely on ingredient sales to individual consumers would be the hardest hit. The report noted that General Mills and Kraft Heinz, which produce ready to eat meals, entrées and desserts, could feel significant pain if they do not overhaul their operations.
Food consumption patterns are rapidly changing, and it seems that as fast as the big players try to adapt, they can't keep up. Those manufacturers that are able to widen their footprint and diversify by adding online grocery and quick service restaurants to their client base would benefit, the report suggested. Doubling down on convenient, grab-and-go offerings also may appeal to busy millennials who want flavorful and interesting meals but don't want to take the time to make them. In short, food companies need to find ways to get their products to where consumer food habits are going.
Some CPG companies — Nestlé's Lean Cuisine, Pinnacle Foods' Birds Eye and Gardein brands and B&G Foods' Green Giant among them — have already started innovating by introducing one-bowl meals, larger entrées and more spicy and flavorful items.
Conagra's Banquet brand, which its CEO said had "packaging that looked like it was from the 80s," was refreshed, and a new premium "mega" tier for people with big appetites, especially popular among the millennial crowd, was added. It also introduced cheeseburger and hot chicken sliders to cater to the on-the-go consumer craving protein. The strategy paid off — Banquet sales jumped 6% from the prior year.
Other ways to keep millennial customers interested are salad bars, deli offerings, ready-to eat-snacks and already prepped vegetables to provide that all-important convenience factor. Food companies will have to work harder to keep their products fresh and relevant to complete with restaurant offerings, so it will be important to monitor social media channels such as Facebook, YouTube and Instagram to track what millennials are buying and eating.
They also might have to take a chapter from food retailers, such as Wegmans, Publix and Kroger, which have found ways to compete with restaurant delivery by making ready-to-eat meals and groceries available in the same location. Millennials may find it just as easy and convenient to stop by their local supermarket and grab something tasty and interesting as it is to access an app, find a restaurant that delivers and order food everyone can agree on.