ALFRED INSIGHTS: THE SHIFTING LANDSCAPE FOOD AND DRINK LANDSCAPE
In recent years, every industry has felt the impact of global events and political instability, and the food, drink, and FMCG sectors are no exception.
We wanted to explore these shifts and the fluctuating consumer attitudes to the food and drink space as well as external factors that are impacting the world of FMCG – from inflation, to the after-effects of Covid and the growing influence of TikTok.
To summarise these shifts,Lucie RhoadesandEloise Cantellohave outlined eight key trends that we see consistently across the space impacting food, drink and hospitality, and how brands can navigate these changes.
First up, is ‘Living Local’. The pandemic fostered a renewed appreciation for local shops and produce. Despite post-pandemic challenges, the trend of supporting local businesses has remained strong, influenced by the rising cost of living and the struggle of local farmers against supermarket pricing. UK hospitality also faces severe challenges due to rising energy bills, interest rates, and supplier costs, leading to closures of pubs and restaurants. However, there's hope in the rise of pop-ups and street food vendors.
Next, we have a ‘Boom of Brand Partnerships’ - unexpected brand partnerships have gained traction. From Greggs x Primark to Liquid Death x Elf cosmetics these have successfully captured consumer interest - these collaborations allow brands to create limited edition products and experiences that drive conversations and expand their audience reach.
‘Polarised Voices, Audiences, and Trends’ - brands like Innocent and Oatly have thrived by adopting bold, unique voices. However, this can polarise consumers, and require a deep audience understanding. Gen Z is also having a big impact with their shift towards wellness and moderation and there has been a huge rise in low and no-alcohol options. You need to know your audience beyond data, and get out into the world to gather insights about what they’re really thinking day-to-day if you want to cut through and earn attention..
The potential introduction of HFSS regulations has pushed brands to reconsider their product formulations which brings us to trend four: ‘HFSS, Processed Food, and the Death of Indulgence’. This is compounded by growing consumer scepticism towards processed foods and brands have been under the microscope when it comes to health. The real debate here is about where we draw the line around what processed really means, and do we find the balance between our health and the health of the climate?
This links closely to ‘Plant-Based Pressure’ where the demand for plant-based products continues to grow, driven by environmental concerns. However, the market faces pressure to innovate and offer better-tasting and less processed alternatives so there needs to be compromise.
In the drinks world, ‘Changing Our Cocktails’ is now key. There is a noticeable shift in the market towards healthier, low-sugar options. Brands are innovating with new flavours and sustainable practices to meet evolving consumer preferences, impacting how brands need to promote their new products.
Younger generations are driving change with their preferences for sustainability and wellness which brings us to ‘The Next Re-Generation’. Brands need to engage with this demographic through meaningful and authentic interactions and not token pieces of activity.
Last but not least ‘As Seen on TikTok’. Whether you’re on social media everyday or you dip in and out, TikTok trends are significantly impacting consumer behaviour. Not only is social media shaping what we eat, it’s also shaping where we eat. It has also changed how we find food recommendations, with TikTok now operating as a search function, so it’s vital to be included on their pages alongside SEO.
In summary, adaptability and innovation for brands in the food, drink, and hospitality sectors are key. By understanding and responding to these trends, brands can effectively navigate the complexities of the current market landscape and foster deeper connections with their audiences.
Read the full report online HERE and if you would like to hear more, drop us an email eloise.cantello@alfredlondon.com.