Everything is changing. The way we eat, technology, people’s expectations — the knock-on effect of this is revolutionising much of the food industry, from the ingredients we buy to the food manufacturing software we use.
So what are the food processing trends to watch out for in 2021?
1. Safety standards in a post-Covid-19 world
People need to eat, and that’s made food processing an essential industry around the world despite the pandemic. But the other side of the coin to remaining open is that 2020 had to be a year of increasingly tight restrictions and precautions.
While the rolling out of the Covid-19 vaccine is highly positive and experts anticipate the pandemic will be largely over by the end of 2021, precautions remain in place and that makes safety a key and hugely important trend for the next 12 months.
Food processing plants should expect physical inspections to become more frequent again this year, with the easing of social distancing measures around the globe allowing inspectors to recommence their work. Tied with those tighter precautions, workers should be ready for a string of tough assessment criteria and the potential for further disruption.
Consumers care about sustainability when it comes to their food. In fact, 54% of survey respondents to the International Food Information Council (IFIC) said they believe sustainability is very or somewhat important.
The global food industry may not be responsible for as many greenhouse gas emissions as certain other industries, but it’s high — releasing about 3.3 billion tonnes of CO2 each year, according to the UN’s Food and Agricultural Organisation. And it also accounts for a huge portion of the world’s land usage, an increasingly hot topic to environmentalists.
A subset of food sustainability to watch out for is food wastage. Globally, says the UN, about 1.6 billion tonnes of “primary product equivalent” food is wasted, while 28 per cent of the world’s agricultural land produces food that is lost or wasted. Combined, this creates an economic impact of about US$750 billion per year.
We will cover sustainability again later in this article when we talk about product transparency — a way for companies to show that they are acting in a sustainable manner.
Sustainability is increasingly important to consumers
3. Changing habits: The rise of plant-based foods
Plant-based products are increasingly all the rage, taking over supermarket shelves and freezers around the globe. Indeed, in the US alone the plant-based meat market is worth over US$900 million, and 14% of US households say they purchase plant-based meat (Good Food Institute).
These substitutes were once the domain of vegans, but vegetarians, flexitarians and general omnivores now make up a large portion of potential customers and are driving growth in the market. People think these options are healthier, and as we’ll explore further in this article, health is another major concern of the modern consumer.
Of course, sustainability is also a key factor. Consumers are regularly bombarded with stories of animal abuse in the agriculture sector, and worry about the long-term sustainability of meat-based food products over plant-based alternatives. This has spurred serious short-term growth in the sector: according to Nielsen data (gathered by FoodDive), meat alternative sales were up 129% during the pandemic, compared to the same time in 2019.
No matter where this growth goes in future, it’s clear that 2021 will be another strong year for plant-based food manufacturers.
4. Changing habits: Healthy food, healthy body
Health foods have been a craze for a long time, but the pandemic put a whole new emphasis on eating to stay healthy.
For example, changes to consumer behaviour show that people are thinking more and more about their immune system, and how their eating habits can impact it. 57% of global consumers say they are now more concerned about their immunity as a result of Covid-19 (AMD). This is leading to a market uplift for products containing probiotics, prebiotics and postbiotics.
AMD also highlights that the immune system is not all that people are concerned about. Concerns with cardiovascular disease, weight management, personal nutrition, and mental health are all pushing behavioural shifts which are having a knock-on effect on product growth. To put that in numbers, nearly 50% of consumers plan to purchase food items relating to their health and wellbeing, and 31% are already purchasing items tailored for their unique health and nutrition.
When you look at this in conjunction with the rise of plant-based foods (again, seen as healthier options) and the importance of sustainability, ‘green’ foods that appear healthy are shaping up to have a strong year.
Consumers are paying closer attention to their health and wellbeing
5. Changing habits: Purchasing food that lasts
Covid-19 changed consumer habits quite drastically, and while it’s unlikely that these behaviours will linger long after the pandemic ebbs, experts predict they are here to stay for 2021 at least (and possibly longer).
One such behavioural change is a switch from fresh foods to frozen or processed foods — those centre-store items that last. According to Deloitte, 28% of consumers will switch to a frozen or processed alternative when faced with a stockout of the fresh item they intended to purchase. This is coupled with sources suggesting customers are shopping for groceries less than they used to:
- Customers who previously shopped for fresh food multiple times a week dropped in half
- 40% of consumers are shopping less often than they did pre-pandemic
“While fresh items will always have their appeal,” Shopkick general manager Dave Fisch said, “it’s center-store that has simply become more practical, a trend that looks like it’s here for the long-term.”
Perishables could be in trouble if their manufacturers can’t maintain a consistent supply and keep up their attraction to stressed customers. When Deloitte asked respondents about their stockout replacements, about half said they sometimes prefer the replacement item and don’t intend to go back.
6. The disruption of JIT
The just-in-time supply chain model has dominated the food industry for decades, helping organisations upstream and down eliminate waste and manage costs. However, under the severe strain of Covid-19, this model has proven too brittle for the modern era.
Experts are predicting — and witnessing — a large-scale shift across food sectors away from JIT towards just-in-case. This, of course, requires a major overhaul of the supply chain; while there are benefits (upstream partners face less pressure to produce goods at the same frantic pace while downstream partners build resilience to supply chain disruption), this comes at a cost. Larger inventories, for examples, could lead to a greater risk of shrinkage.
Technology, therefore, is a key investment for food processors to consider in 2021 — anything that will help them automate, monitor and analyse their key processes, such as inventory management, to maintain visibility over operations and mitigate the risk of excess shrinkage.
Other solutions include:
- Introduction of new suppliers
- Dual sourcing strategies
- Greater sourcing diversity
- Product redesigns
7. Greater investments in food manufacturing software
Costs are high enough without getting higher due to changes in consumer behaviour and supply chain methodologies. One way many food manufacturers are helping to mitigate — or at least manage — those costs is with advanced food manufacturing software.
Tools of this nature are all about gaining visibility and control of your inventory as it enters and exits your warehouse. For example, food inventory management software is designed to accurately track every item as it passes through your business, from purchase to sale. It can monitor the age of stock, where it’s located, custom recipes, how products are selling — any aspect of the business.
This transparency leads to better business intelligence, which in turn can help you make informed, evidence-based business decisions (perhaps a particular product is selling poorly, or certain raw ingredients are growing more difficult to acquire).
Business intelligence is critical to success in the modern era. Visibility and real-time monitoring help an organisation accurately control its costs, giving it the breathing room to make adjustments based on emerging trends.
8. Greater investments in automation
In addition to software, 2021 may be the year to invest in physical technology – namely, automation.
Now, automation can be a difficult subject to discuss and it isn’t right for every organisation. However, some experts predict it will be the saving grace for food manufacturers trying to recover from Covid-19 (among other major economic changes, such as Brexit) amidst crippling worker shortages.
For example, in Canada leaders in the food manufacturing sector are warning of a predicted near-25% gap between available workers and the demand for workers by 2025. Organisations in Canada are asking for support in updating their technology to help alleviate these vacancies with streamlining and automation.
Meanwhile, experts in the UK are suggesting the same thing in order to handle Brexit.
Of course, all investments in automation must be balanced with the needs of human workers and what role they might play in your future business. This isn’t one to rush headlong into.
As we mentioned earlier, food label transparency is shaping up to be a key trend of 2021, and a way for manufacturers to show off their sustainability and healthy eating initiatives.
According to the IFIC survey referenced above, consumers struggle to recognise environmentally sustainable sources in their food. 60% said they don’t know which of their food choices are environmentally friendly, and 63% say it would have a greater influence on their purchase decision if it were easier.
In addition, an Innova survey found that six in 10 global consumers have a genuine interest in knowing where their food comes from.
This puts great emphasis on clean product packaging that tells a clear story. Information on animal welfare, sustainable and fair sourcing, supply chain transparency and clear ingredients could all have a big impact on product desirability this year.
No complaints when it comes to having your pet food delivered straight to your door
10. Pet food: Going direct to consumers
For pet food manufacturers in particular, the direct-to-consumer trend that has taken the rest of the food sector by storm (especially in 2020) has not left pet food untouched.
“[One of the top trends] is a continued push towards everything being digital in the pet food environment,” Jared Koerten, Euromonitor International’s head of pet care research, told Pet Food Industry magazine.
Mr Koerten, among other experts interviewed by Pet Food Industry, believes that this growth in eCommerce sales will be sticky even after the pandemic ends and consumers feel more able to visit their old brick and mortar stores.
“While it’s possible that some consumers may swing back to purchasing their pet’s food in stores,” agreed Melissa Hartley, senior market manager at FONA International, “many will continue to embrace the convenience and benefits of having food delivered to their front door.”
As a result, pet food brands will have to do more to attract online sales.
2020 was a year of change and disruption. Consumers are increasingly taking control of the food that they desire, leaving manufacturers with little option but to bow to the new demand. This coupled with the need for technological innovation will likely lead to 2021 being a year of upgrades and R&D — especially for those nations still battling the pandemic.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.