At the onset of the coronavirus pandemic in March 2020, consumers and businesses couldn’t have predicted the long-lasting impact it would have on nearly every global industry.
From the supercharged growth of ecommerce to the supply chain crisis that’s making it difficult for products to get created and shipped, the effects have ranged from negative to positive for different industries.
For the food and beverage sector, the past two years have been a wild ride. In this article, we’ll dive into the most recent ecommerce stats and data for this industry, how the COVID-19 pandemic and supply chain issues have impacted this industry, and trends and strategies food and beverage brands should know about to beat the competition in 2022.
COVID-19 Impacts on the Food & Beverage Industry
In 2019, US ecommerce food and beverage revenue was $13 billion. The pandemic propelled sales forward significantly – and last year, sales surpassed $21 billion.
By 2025, revenue from online food and beverage sales will reach $26.7 billion – more than double what it was in 2019 before the pandemic started.
Online grocery sales skyrocketed last year in light of the pandemic. In 2022, online grocery sales will make up 11.1% of all grocery sales, more than triple what penetration was in 2019 pre-pandemic.
By 2026, more than 1 in every 5 grocery sales will happen online.
US grocery delivery and pickup sales have also seen exceptional growth since the onset of the coronavirus pandemic. In August 2019, grocery delivery and pickup brought in $1.2 billion. In October 2021, that number was $6.2 billion. That $5 billion growth amounts to a 416.7% increase in sales for grocery delivery and pickup!
Online food and beverage sales are predicted to account for 4.4% of total US retail ecommerce sales in 2022, up from 3.1% in 2019.
Supply Chain Concerns for the Food & Beverage Industry
The food and beverage industry has not been immune to the supply chain issues that have been straining production and shipping around the globe. Paired with rising consumer prices, the supply chain is currently posing a cause for concern for the food and beverage industry.
Farms and other food production plants rely on workers to get food ready for customers, but those farmers can’t work if they fall sick with COVID-19, and plants end up having to shut down. Economic uncertainty at the onset of the pandemic also led many companies to cutting back on unnecessary costs and producing smaller yields.
For consumers, food costs are on the rise. Grocery store food prices were up 6.4% in November 2021 compared to November 2020. Grocery store food costs are expected to increase 1.5-2.5% overall year-over-year in 2022 after rising 2.5-3.5% in 2021. Restaurant prices will increase 3-4% this year after increasing 4-5% in 2021.
2022 Ecommerce Predictions for the Food & Beverage Industry
Ecommerce food and beverage revenue is expected to grow another 10% in 2022 to reach $23.5 billion, with growth slowing but still happening in the years after that.
Before the pandemic, experts predicted that ecommerce penetration into the food and beverage industry would reach 3.01% for 2020 – but that number ended up being almost an entire percentage point higher at 3.94%. Now, pre-pandemic estimates and current estimates are leveling out. In 2022, ecommerce penetration into the overall food and beverage industry is expected to hit 4.36%, a minimal increase from the pre-pandemic estimate of 4.31%.
Food delivery apps will continue to be a major driver of ecommerce revenue for the food and beverage industry. In 2019, there were approximately 95 million food delivery app users. That grew to 111 million in 2020. Food delivery apps are projected to bring $30 billion in revenue in 2022, up from $28 billion in 2021 and up from $22 billion before the pandemic in 2019.
Trends & Strategies for Food & Beverage Industry Brands
The consumer packaged goods (CPG) sector has been on the rise for years, but the pandemic spurred that growth forward more than what was previously expected.
Consumer packaged goods (CPG): Any items that consumers use almost daily and replace frequently, including food and beverage, personal care items, and household products.
CPG and online grocery appeal to consumers because they provide pandemic-safe options for purchasing essential items. With the pandemic causing health and safety concerns, this category surged as a safe and efficient way to get essential items.
Grocery overtook health and beauty to become the top online CPG category in 2021, making up 44% of digital CPG sales compared to 38% for health and beauty. That amounts to 125% year-over-year growth for online CPG grocery items.
Brands in the food and beverage industry that haven’t tapped into CPG certainly have the opportunity to do so successfully in 2022. Consider how you can expand your current product line to be CPG-friendly without having to create entirely new products.
There’s also an opportunity for grocers to focus on non-food item sales to boost revenue since food sales have grown so much. If you’re a food and beverage brand that has grown over the course of the past two years and you want to make sure that your growth doesn’t become stagnant, how can you emphasize other parts of your already-existing product line to profit even more?
Whatever the case, you’ll want to make sure that your brand’s site and/or app are fully optimized to run smoothly and push shoppers toward a purchase. 90% of shoppers say they often or occasionally place orders through a grocery retailer’s website and 73% say they do so through an app.
And since research from The Food Industry Association and NielsenIQ predicts that in 2022, every household will spend an average of $850 on online food and beverage purchases, you’ll want to make sure that your brand is ready to reap the rewards.
Boosting Conversions for Food & Beverage Brands
If you’re a brand in the food and beverage industry, are you prepared to get as many conversions as you can from your site and app visitors? The conversion rate optimization experts at ROI Revolution can help. We conduct A/B tests, run conversion-focused site audits, and more to help large and growing brands get more conversions online. Reach out today to see how we can help.