Online meal kits and more direct to consumer sales expected

The manner in which groceries are bought and sold is undergoing a swift and significant transition. In fact, a new report from the RaboResearch Food and & Agribusiness group, finds that of food purchased for in-home consumption, approximately 20% will be purchased online by 2025. These online purchases include not only traditionally packaged groceries but also complete meals packaged for home preparation in the meal kit category.

“Changes in where consumers buy groceries, when they buy, and what they buy will inevitably force changes all the way through the supply chain. Nowhere will these changes be more dramatic than in perishables such as meat,” suggests RaboResearch Food & Agribusiness Senior Protein Analyst Don Close. 

Close sees some positives from these changes. He notes that meal kits may help introduce consumers to new beef cuts and recipes – and give them step-by-step instructions for cooking to ensure a great eating experience. The online grocery experience also allows a means for telling more story about the products and production practices – something consumers are seeking.

Additionally, Phil Lempert, anticipates consumers are seeking more multi-sensory options – in products, packaging and in-store. He points to varying food colors, textures, even sounds, as part of the multi-sensory experience. Specifically, Lempert says poke bowl restaurants – typically serving bowls of rice with a variety of seafood and vegetable toppings – are growing quickly and offer a variety of colors and textures in their food options. This model is challenging fast food and quick service restaurant formats.

Changes in farming

Just as the way food is packaged and marketed is changing, so too is agriculture production going to change – dramatically, says Lempert.

With 65% of the population living in urban areas, Lempert says the direct farm-to-consumer connection trend will only increase as communities strive to get closer to nature. He points to apps helping make that happen. One example: the FreshFoodNY app, which is a virtual farmers’ market allowing New Yorkers to purchase local food directly from farmers and fishermen. 

Another change Lempert is predicting – younger farmers entering the field. He reports the USDA’s latest Census of Agriculture reports that the number of farmers under 35 is increasing, and this is only the second time that has happened since 1900. Interestingly, among these “new” farmers, 69% have college degrees, which is nearly 30% higher than the 40% incidence in the general population. Of this, Lempert says, “Younger, smarter farmers will bring us into a new era of agriculture.”

Two other trends that are likely to impact agriculture according to Lempert include growing popularity of plant based diets and growing investment in vertical indoor farming. Lempert reports that in 2020 a multi-use building will open in Sweden with a mix of 16 stories of farms and offices. It is said this vertical farm building will save 1,100 tons of CO2 emissions and 13 million gallons of water. He shares that Bill Gates is also investing a new “smart city” model that would incorporate vertical farming along with other cutting-edge technology.

Food and health

As health risks among American’s continue to skyrocket, particularly obesity, Lempert says renewed efforts are being made to better match an individual’s food choices to health. He explains that neuro-nutrition is being researched to further study how different foods affect our brains, while biohacking is another emerging trend designed to use science to create individualized nutrition and products matched to a person’s nutritional and health needs. 

Technology’s impact

Going forward, Lempert emphasizes that technology will continue to shape the future of food. He points to digital assistants like Alexa, Google Home and others ushering in a new, automated way to easily reorder from Amazon or other retailers.

His data reveals that in just two years, there will be 55 million smart devices in our homes, making that the biggest supermarket chain on the planet. But Lempert believes the auto-purchases will primarily be for paper products and non-perishable items – leaving supermarkets to specialize in fresh foods, artisan foods, and prepared foods.

Technology will also continue to impact food transparency. Lempert reiterates, “Today, people want a connection with the foods they eat; they want to know where foods come from.” He suggests technology will likely have an increasing role in helping consumers learn about food and make healthier food choices.

Finally, Lempert says he is most excited about the new “thought leaders” coming into the food industry. He reports that over the past two years, 17 CEOs of large food companies have been replaced with fresh-thinking exes. He points to retailers like Hy-Vee who are hiring graduates from Stanford and Harvard. He concludes, “It’s a new food world. The new retail model must be built around the consumer, with the foundation that someone else thought through the way people want to acquire foods, and create an environment that empowers consumers and makes their lives easier, healthier and more enjoyable.”
Source: Cattle Business Weekly By Kindra Gordon

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