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Jan 5, 2021

2021 Outlook for the U.S. Food and Beverage Industry

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You don’t have to be an expert in, well anything, to know 2020 was a year like no other. Words like “unprecedented” were heard on a daily basis. Families and loved ones were kept apart. A simple trip to a store became complicated by social distancing and personal protective equipment. And since the pandemic came on suddenly, consumers had to discover ways to adapt after the fact versus making preparations.

Given the record-breaking daily new cases at the end of 2020 and the projected length of time needed to get the general public vaccinated, it appears COVID-19 will be with us well into 2021. We certainly can’t forecast the spread of the virus, but NPD’s rich history of tracking food and beverage consumption trends enables us to make predictions on how consumers will behave in reaction to the situation. Look for the following overarching behaviors in 2021:

A New Normalization

Since the COVID-19 pandemic and ensuing shelter-in-place orders came on suddenly, consumers had to quickly adapt to a new home life, including home schooling children, making more meals in their homes, and relying heavily on digital means to obtain foods and beverages. To cope with these new in-home stressors, consumers stocked up on staples like bread, eggs, and cereal, as well as household items like toilet paper and paper towels, resulting in supply shortages. Consumers also took a break from nutrition as stress eating led to increased consumption of sweet baked goods, ice cream, alcohol, and other indulgent categories.

Now that consumers have had time to adapt to life under restrictions, panic buying has ceased but using digital sources for both restaurants and retail remain elevated compared to pre-pandemic times. We should see consumers settling into this new normal as it helps them remain distanced while saving them trips to the store given the extra in-home responsibilities they now face. It’s important to note that many consumers who are using digital ordering during the pandemic were solely offline users pre-COVID, and they now realize the convenience online ordering provides – more evidence we’ll see online remain elevated into 2021.

Nutrition took a back seat in 2020 because consumers were trying to figure out how to handle one day from the next and planning for health became more of luxury for many. Now that consumers have found new routines and more ways to pass time, we should also see stress eating relax as consumers are settling into their new realities. Look for a return to morning snacking and reduced consumption of indulgent categories.

Convenience Elevated

What won’t go away, however, are the appliances consumers purchased to make in-home foods easier to prepare. Air fryers and multi-cookers, for example, posted double-digit dollar sales growth over the last year, meaning many households now have these appliances on hand. According to NPD’s Kitchen Audit, as of July 2020, 37% of homes have air fryers and 26% have multi-cookers, and as more consumers purchased these appliances usage increased. These appliances were purchased for convenience and consumers will continue to expect that. Look for more products that are specifically made for these appliances or existing products that now show cooking instructions or recipes that include them as well.

A Longing for Experiences

Before the pandemic, consumers were increasingly shifting their dollars toward experiences like travel, movies, and entertainment, but that nearly came to a grinding halt. Consumers are feeling empty spaces in their lives normally filled with activities that provided memories and entertained the family. Restaurants can provide some of the experiences they miss but many areas of the U.S. still have them under tight restrictions. As more municipalities eased restrictions for on-premises dining in 2020, there was an immediate increase in restaurant transactions. Consumers will be looking for the first signs they can safely return to restaurants in their neighborhoods throughout 2021 as they already have this year.

Entertainment is still top of mind as consumers are staying home more, whether that means finding new ways to connect with others or keeping themselves and their families busy. They stocked up on meal preparation devices, connected home devices, and bakeware and will be ready to entertain guests when they get the green light. Last summer more than 40% of consumers went to someone else’s backyard for entertainment and another third grilled outside. Even in colder weather households found ways to eat and entertain outdoors.

In the absence of other forms of entertainment, look for consumers to make up the difference by grilling outside their homes and engaging in more cooking activities that include multiple family members. We should also see more digitally-delivered restaurant meals to ease the in-home burden of cooking and provide the restaurant experience in the home. As restaurants try to recapture lost traffic, they will likely offer in-home food preparation in the form of meal kits or curated specialty grocery items.

There is no doubt that 2021 will continue to bring challenges, but it also brings hope. Consumers’ eating attitudes and behaviors will shift accordingly to whatever the new year brings, and we’ll be continually monitoring these eating behaviors to keep you in the know.

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