This is Part 4 of 4 in a series of posts looking at how food companies, retailers and foodservice operators can reach four key consumer archetypes that are shaping the industry today. If you missed it, check out Part 1, Part 2 and Part 3.
In some ways, the pandemic has made life more inconvenient for Americans than at any time in recent history, but it’s also been a growth driver for convenience when it comes to how we buy our food from restaurants and retailers. Drive-thrus, curbside pickup, mobile ordering and other tech tools have surged in popularity and startups focused on those tools have raised significant venture capital investment this year.
Alongside an evolving definition of convenience, consumers have been seeking out comfort foods more often in recent months. While the old standbys have remained available for consumers when it comes to comfort food, many companies, and restaurants, are also being forced to innovate within the category to remain relevant and satisfy all of today’s consumers’ changing needs.
These conveniences and comfort food options were all available before COVID-19, but they’ve surged in use and popularity as the pandemic changed everything and, in many cases, they’re likely to remain popular once the health storm calms.
Convenience means buying our food where, when and how we want
To meet consumers where, when and how they want to shop, merchants in all segments of retail, including grocery, have increasingly focused on omnichannel efforts, and that trend has become more pronounced amid the pandemic as safety suddenly rivaled convenience as a key factor in consumers’ decisions on where and how to shop.
In the US, online food and beverage sales were on the rise even before COVID-19 hit, and the pandemic has only accelerated growth. Online grocery sales hit $17 billion two years ago and were on track to grow 32% annually through 2023, according to a Packaged Facts report published in June.
And, while e-commerce is still a relatively small channel compared to overall grocery sales, it’s increasingly a field food retailers must play on to stay competitive as Amazon continues to expand its presence in the grocery space.
Last year, Instacart added a click-and-collect option for customers who preferred to order online and pick up curbside or in stores, an increasingly popular option during the pandemic.
Target has seen its digital grocery sales soar with curbside pickup and delivery via Shipt. Like Instacart, Target-owned Shipt sends shoppers to stores to fulfill orders placed online or via the Shipt app for delivery or pickup.
In August, Target reported a 273% surge in same-day delivery and pickup orders for the second quarter and a record 24.3% increase in overall comparable sales, fueled in large part by a 195% jump in digital comparables.
All this is to meet the changing convenience-oriented consumer, but keeping loyal customers is more challenging in the digital age — omnichannel shoppers are four times less likely to be loyal to a single retailer than non-digital shoppers, according to S2G Ventures report, The Future of Food.
“Going online, the friction points are so much lower and there’s less buy-in as a consumer,” said S2G Vice President Audre Kapacinskas.
That means retailers need to think about engaging consumers in new ways to encourage them to remain loyal, often going beyond the convenience factor. Loyalty programs have been around for a long time, but retailers are now finding new ways to add value by personalizing the experience, she said.
Amazon announced recently that it now offers Amazon Prime members the option of free one-hour curbside pickup at all its 487 of its US Whole Foods Market stores. Unlike Instacart and Shipt, Amazon has Whole Foods pick and pack the orders and hand them off to an Amazon driver for delivery.
The e-commerce giant also recently designated one of its Whole Foods locations as a “dark store” that would be dedicated solely to fulfilling digital orders, and other grocers are beginning to experiment with that concept as well.
Convenience has been playing another key role in consumers’ dining habits as they search for stability amid all the uncertainty of 2020, NPD Group’s Darren Seifer said. Now, more than ever, restaurants are also focusing on meeting demand for convenience — and safe dining — with a focus on off-premises options.
Chains including Burger King, Del Taco and Starbucks are all working on smaller formats that have little or no dine-in space but make room for more drive-thru lanes, food pickup and outdoor dining.
And a growing number are also experimenting with delivery only banners, dubbed ghost kitchens, which offer lower overhead, flexibility and the ability to test out new concepts.
Outback Steakhouse parent Bloomin’ Brands has debuted a virtual chicken concept called Tender Shack in the Tampa Bay, Fla. area, with food cooked in Outback and Carabba’s Italian Grill restaurant kitchens and delivered via DoorDash.
The ghost kitchen concept has attracted investors this year, including Uber founder Travis Kalanick who has spent a reported $130 million to buy 40 properties in nearly 24 US cities for his ghost kitchen startup CloudKitchens. The properties include warehouses and shuttered restaurants, The Wall Street Journal reported.
Comfort foods mean different things to different people
Since the start of the pandemic, many consumers have shifted their focus from healthy dining habits to feeding their cravings for comfort food, said Seifer.
“We’ve been continuing to look at these trends month by month and we’re still seeing evidence that consumers are putting nutrition on pause for the moment,” he said.
The trend was a boon to iconic processed food makers like Campbell’s Soup and Chef Boyardee and familiar snack brands like Pepperidge Farm and Cheetos, The New York Times reported in early April.
Sales of older products that had been waning in popularity before the pandemic were suddenly booking double-digit growth. Kraft Heinz, which had written down the value of its Oscar Mayer Cold Cuts and Kraft cheese brands last year amid waning demand, reported running some factories round the clock to churn out comfort — and convenient — favorites like Kraft Macaroni & Cheese.
For consumers that crave comfort foods, but are still paying attention to nutrition and specialty diets, new brands like Magic Spoon have come on the scene. The brand’s cereals come in flavors like fruity, cocoa and peanut butter, but they’re gluten-free, keto friendly and made with no added sugars.
Consumers have also been finding comfort in homemade treats, including sweet baked goods that not only filled the craving for comfort but also gave parents and kids something to do together, NPD’s Seifer said.
At-home meal consumption grew in the May through July period, but convenience was still a factor, especially at lunch. Families were home together working and schooling so restaurant takeout and one-dish options like soup or sandwiches proved popular at the midday meal, mirroring many of the lunches people now working from home would previously have eaten at the office.
“[T]he burden fell on people to make more meals at home,” he said. “A lot of them probably were thinking ‘I need to just get through the day, I’m not sure if I can necessarily be worried about health at the moment.”
Snacking habits have changed among consumers as well, Seifer said. Pre-pandemic, snacking in the morning on healthful options like fruit and yogurt was growing in popularity. Now, we’re snacking later in the day and cookies, ice cream and other indulgent options are on the menu, he said.
An analysis of Google search data backs up that trend, Forbes reported in August. The report showed comfort food keywords including “ice cream” “burgers” and “cookies” were up from March through August over the same period last year, while “salads” and “veggies” dropped in popularity.
Sales of appliances like air fryers and Instant Pots also rose, Seifer said, as consumers sought new ways of easily feeding their cravings at home, further exemplifying how convenience and comfort have converged in new ways as a result of the pandemic.
If you enjoyed this article, you can sign up for the FMI dailyLead, ProChef SmartBrief or Restaurant SmartBrief to get news like this in your inbox. For even more great news content, sign up for any of SmartBrief’s 275+ free email newsletters today, free.