Food Industry and E-Commerce: 5 Year Outlook

By 2024, 70% of consumers will likely utilize online grocery shopping, up from 25% now. (FMI and Nielsen, 2018) See what food manufacturers are doing to prepare for this growth.

Food Industry and E-Commerce: 5 Year Outlook
Food Industry and E-Commerce: 5 Year Outlook

A 2018 consumer survey by LEK Consulting forecasts that e-commerce will account for 15%-20% of the food and beverage sector’s overall sales by 2025 — a potential tenfold increase over 2016’s 2% share.

Millennials currently comprise 49% of all people who purchase groceries online, followed closely by Gen X at 39%, and Boomers at 25%.

And, according to “2019 Trends and Advances in Food Packaging and Processing,” a report by PMMI Business Intelligence, this trend is creating change not only in food packaging, but in processing and delivery as well.

Areas in operations where food companies are actively rethinking their approach: 

           Individual units

           Variety packs

           Durable materials

           Protective packaging

           Specific labeling

           Machine re-tooling

           Upscaling operations

           Graphic online imaging

           Order fulfillment

           Delivery challenges and costs

           Third party handling

One packaging systems development engineer at a leading bakery and snacks company said, “E-commerce is driving growth in multiple packaging formats to appeal to consumer preferences while still surviving the rigors of the supply chain.”

What strategies can manufacturers take while implementing these changes? The report says to “Think clean labeling, design for clear visibility of the product, and package for convenience in use and disposal.”

The LEK Consulting survey also said that “Food companies are forming teams and committees to instigate change and are working on cost effective and consumer centric solutions to better serve both online and instore customers.”

Specific trends to emerge include grocery chain meal kit delivery. According to the PMMI report, “While meal kit delivery companies have struggled, grocery chains have started to offer meal kits directly. It is likely this trend will continue as companies seek to diversify their online offerings and expand retail location options.”

What are food manufacturers saying about e-commerce in their operations?

INDIVIDUAL UNITS AND VARIETY PACKS

In order to participate in e-commerce sales, we have added variety packs and individual units with added calcium and electrolytes. - Director of Engineering Services, Perishables

DURABLE AND PROTECTIVE PACKAGING

Overnight e-commerce shipments demand durability of the primary package and greater protection for the secondary package. - Packaging Engineer, Beverage

FRESH, SAFE, ACCURATE

The challenge is to get the freshest product to consumers and maintain security and accuracy; it takes fast decision making. - Corporate Engineering Manager, Leader in Food

UPSCALING OPERATIONS

We have a new e-commerce initiative selling a small amount of products now, with plans to increase in the future. - Principle Packaging Engineer, Canned

FROZEN FOODS CHALLENGE E-COMMERCE

We have a team working on finding a cost-effective solution to distribute frozen foods via e-commerce. - Packaging and Processing Expert, Frozen Foods Leader

Source: PMMI Business Intelligence “2019 Trends and Advances in Food Packaging and Processing”

Download the FREE Executive Summary below, or PMMI Members can download the entire report here.

Make plans to visit PACK EXPO East in Philadelphia, March 3-5, to see on-trend e-commerce food processing and packaging machinery and materials.


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