Home Blog 2020 COVID Accelerates the Food Industry Digital Evolution
Jul 8, 2020

COVID Accelerates the Digital Evolution in Food and Foodservice Industries

Subscribe to our blog

The COVID-19 pandemic has brought about a myriad of behavioral changes, and among the behaviors most interesting to me was the rapid escalation of using technology to order groceries and from a restaurant. I remember standing before an audience a few years back talking about e-commerce across retail and how the food and restaurant industries were just in the early stages of the digital era.  I asked the audience to imagine a world five or six years into the future when grocery and restaurant orders would be double what they were that day. No one in the room that day, including me, thought we’d get there so soon, but because of the coronavirus, we did. 

For grocery shopping, online ordering for both pick-up and delivery was growing before the crisis.  As consumers looked to minimize exposure outside of their homes during the pandemic, this trend picked up considerable momentum. By mid-April, online grocery buying was about 77% higher than before the crisis and in May, 40% ordered groceries online for delivery or carry-out compared to 28% same month year ago. This has the potential to reshape the grocery retail landscape. Retailers who are more developed in their digital capabilities and have strategic partnerships with third-party platforms will likely emerge from this crisis stronger than their peers.

Digital foodservice orders represented 5% of foodservice visits in January 2018 and by April 2020 the share of digital orders increased to 20%. Digital restaurant orders increased by 138% in May. Certainly this growth was accelerated by the mandated dine-in closures that happened across the country in March. Overnight the U.S. restaurant industry, for the most part, became totally reliant on carry-out, delivery, and drive-thru operations to stay in business, and digital ordering became the linchpin. Digital ordering through restaurant and third-party apps as well as restaurant websites enabled restaurants to quickly pivot and provided consumers with the safer option of remote ordering and delivery. Not only did the necessity of the time accelerate digital orderings, but it also brought in new users. For example, new users currently represent 48% of third-party foodservice delivery app users. 

Over the last three months restaurant operators, grocery retailers, and third-party platforms have all expanded their capacity for digital and delivery during the pandemic.  The consumer also learned during this time new capabilities for frictionless and contactless food acquisition. These benefits aren’t likely to be shelved just because the pandemic fades.  While we may settle down to a more normal pattern, I expect these behaviors to remain.



Upcoming Event


Foodservice Equipment & Design Global Thought Leadership series

Presentation title: The Foodservice State of the Industry
Date & Time: October 27, 1:00pm - 2:00pm Central
Location: Virtual
Description: NPD’s Industry Advisory David Portalatin answers questions on  consumer trends, the long term potential impact of the pandemic, and how the restaurant industry may be forever changed. David is joined by Hudson Riehle,
SVP, Research & Knowledge Group National Restaurant Association.  

Register Now

Stay current in your industry
SUBSCRIBE

Related Content

Tagged: Food Consumption , Foodservice


Bread Cookbooks Rise in the Time of COVID-19, The NPD Group Says
Bread Cookbooks Rise in the Time of COVID-19, The NPD Group Says

Print unit sales for bread cookbooks in the U.S. grew 145 percent year over year, for the nine months ending September 2020. As the COVID-19 pandemic shelter at home orders were instituted and restaurants closed, more people cooked at home more and many turned to baking and bread-making as a way to pass the time and learn a new cooking skill.

Eating Patterns in America Take a Sharp Turn
Eating Patterns in America Take a Sharp Turn

In mid-March, the daily rhythms of our lives were suddenly disrupted by the COVID-19 outbreak and that includes our eating patterns.

Explore What’s Inside America’s Kitchens
Explore What’s Inside America’s Kitchens

Learn more about generational shifts, new in-home behaviors, and uncover deep insights with Inside America’s Kitchens.

H1 2020 Foodservice Market Performance in China
H1 2020 Foodservice Market Performance in China

In the first half of 2020, China’s total foodservice market declined -26% in spending and -26% in traffic, due to the impact of COVID-19.

Newsletter

Subscribe and get key market trends and insights relevant to your industry each month.

We will not sell your information. View privacy notice. | Cookie Settings

Follow Us

© 2020 The NPD Group, Inc.