The COVID-19 pandemic has changed life as we know it, especially for consumers. Although identifying consumer buying trends during or after the pandemic is difficult, indications are that buying trends in the food industry have changed rapidly and drastically.

Everyone in the agricultural sector has had to adjust to these changes in food consumption. This was also the topic of many webinars hosted by sector role-players such as McKinsey & Company (McKinsey) and the Produce Marketing Association (PMA).

Earlier this year, McKinsey hosted a webinar focusing on several economic challenges caused by the COVID-19 pandemic. One of the topics discussed was the change in consumer sentiment. The information they shared was gathered from a survey conducted in June this year on consumer sentiment in South Africa. The results revealed that consumers remain uncertain about the future, so they save their money instead of spending it.

Consumer sentiment in South Africa

The survey highlighted the fact that South African consumers are pessimistic compared to those in other countries, and they are among the least confident globally. Those who took part in the survey indicated that their spending would remain the same as previous months. Others indicated that their spending would increase slightly, because they had cut back on their budgets as much as they could.

While consumer spending decreased in all categories, groceries were the most resilient. This is good news for the agrofood industry.

However, the nature of consumption is changing as people are buying from different food categories. Pantry loading and bulk packs have been trending due to the pandemic and ensuing restrictions. E-commerce saw a massive upswing, especially in the food category, with a lack of supply rather than demand slowing this trend down. Although e-commerce and purchasing food via these platforms used to be a slowly developing trend, the COVID-19 pandemic has been accelerating it.

E-commerce for the win

The acceleration of online food purchases was a hot topic of PMA’s regular webinar, PMA Talks. This platform was introduced following the national lockdown to keep members informed of the pandemic’s influence on the fresh produce industry.

In one of these webinars, Kantar shared the findings of a one-of-a-kind study that focused on how COVID-19 influences consumer behaviour, attitudes and expectations. Online shopping was one of the major changes in consumer behaviour due to COVID-19. Kantar’s C19 barometer study is the largest of its kind, including information from over 50 markets and 45 000 consumers.

According to Karin du Chenne, chief growth officer for Kantar in Africa and the Middle East, COVID-19 has changed the retail industry for the long haul.

“This force is changing the way we buy and shop today, and after the crisis. Today, shoppers continue to shop in physical stores, but they are now also increasingly shopping online. This accelerated adoption of digital channels has changed the game and will continue to do so after the crisis,” she says.

Consumer trends during COVID-19

The statistics Kantar shared include:

  • 70% of consumers have reduced their shopping trips to a physical store.
  • 20% of consumers have started shopping more online.
  • 51% of consumers buy food or beverages online.
  • 57% of South Africans say shopping online is more convenient than shopping at a store.
  • 73% of consumers avoid superstores and big malls.
  • 66% of consumers are shopping online more often.
  • 17% make more use of delivery services after ordering by phone.
  • 78% of South African shoppers are paying more attention to products that are on sale.

Other trends the survey revealed include that shopping has become more localised with an increase in cashless payments. Consumers are also more focused on wellbeing than ever before. In response to the abovementioned trends, retailers have jumped aboard the delivery service trend, with many superstores introducing new platforms for ordering groceries online and having it delivered at home.

New focus on wellness

Welmar Ras, CEO of the RSA Group, says consumers have started buying only necessities and this trend will become more prevalent as unemployment keeps rising. “The public is more price conscious. People cook and bake at home more often than before the pandemic.”

He also says there is much greater awareness regarding healthy food and fresh produce, with spending having increased exponentially. This has led to trends in the popularity of specific products, especially in the fresh produce industry. The leading products in this category have remained the same during the pandemic, with ginger and garlic taking top spot for their immune-boosting properties.

The demand for citrus has soared since the outbreak of COVID-19. Lemons, grapefruit and oranges are high in vitamin C, which is an excellent immune booster. He says the popularity of these citrus products has now been overtaken by easy-peeling soft citrus.

According to Welmar, the impact of the pandemic and lockdown could also be felt at the fresh produce markets, which he refers to as the ‘ground zero’ of the consumer value chain. “The markets are where produce prices are set. These prices then serve as a reference price for selling to the end consumer.

“We were particularly affected by the lack of demand from the hospitality industry. This is because most hotels, guest houses, lodges, or companies that prepare meals for flights usually buy fresh produce directly or indirectly from the market. This includes produce such as lettuce, apples and citrus. Other more specialised product lines such as certain herbs and fancy leaf vegetables, are still severely affected.

“The potato industry was also hit hard worldwide with tons of potatoes dumped globally due to reduced processing and demand from restaurants and take-away establishments,” says Welmar.

Changes in produce trends

The fresh produce industry has seen many changes in consumption, notably the trends observed in the potato industry. Potatoes SA releases regular updates on the impact of COVID-19 on the potato industry. In August they released an overview of the effect lockdown has had on the industry over the past four months.

The report revealed that approximately 4,7 million fewer 10kg bags of potatoes were sold at fresh produce markets between January and July this year, compared to the same period in 2019. Since the beginning of lockdown until August, the bags sold at markets dropped by six million. This decline is attributed to the lack of sales to restaurants for two consecutive months, and restricted trade that commenced on 18 June.

Quick-service restaurants were permitted to deliver food as of 2 May and customers could collect their orders from 1 June. However, some of the largest quick-service restaurants are only back to 50% of pre-lockdown volumes.

The sales volume of potatoes increased from January to March, but declined again between April and July when compared to the same period in 2019. The first four months of lockdown (April to July) saw lower sales volumes at lower prices compared to the same period in 2019.

In April this year, the first month of lockdown, potato prices deviated from the usual prices and sales volume movements for this time of year. Sales volumes as well as prices were lower during lockdown, indicating the lockdown’s dampening effect.

The lower demand from the restaurant and food service sector since the beginning of lockdown, put downward pressure on the average price of large potatoes. This is directly linked to the closing of restaurants and the food service sector during alert levels 4 and 5.

These sectors are mainly responsible for buying large potatoes, which make up 20% of all potatoes on the markets.

Staying up to date

It is of the utmost importance that producers and retailers remain up to date with fast-changing consumer buying trends. The sale of produce and food products online has rapidly increased and is likely to become more popular. Affordability is also more important than ever.

Furthermore, fresh produce remains an essential part of agricultural production and supply. It will continue to grow in popularity as consumers become more health conscious. However, producers should nevertheless remember that consumption channels can change quickly, as is evident in the potato industry. – Ursula Human, FarmBiz