Today, consumer perceptions are redefining the convenience retail stores’ sales around the world. So, the retailers are obsessed with customer behavior and taking every attainable measure to enhance their experience. Changing consumer habits and preferences towards convenience food and their ingredients along with the innovation, driven by increasing competition among the grocery and convenience stores are further boosting the growth of the convenience food retail market. Convenience is one of the topmost factors driving the food purchasing decision of the consumers. Also, the survey summarized that 1 out of 4 consumers keenly look for health benefits from the food they consume. This implies that the consumers are more inclined to buy food products that are healthy and the products whose labels are listed. They crave a deeper understanding of the food products whether the ingredients can constitute for their digestive health, weight loss, energy, and heart health. These kinds of changes are observed across every demographic group of the globe. Thus, this customer indulgence in enlisting healthy food ingredients is enabling the manufacturers to reshape and reformulate the use of natural and organic products in the convenience foods. This, in turn, enables them to carry out their operations in a sophisticated way which benefits the entire organization’s food value chain. As a result, grab-n-go, shelf-stable foods, ready to eat food, dairy snacks, and no or minimal prep-time foods are gaining consumer attention with the inclusion of natural and organic products. Consequently, this offers a huge opportunity to the brick and mortar retailers where exploring fresh food is prevalent and rising further. Therefore, the convenience food retail market sales are thriving with the changing consumer buying patterns and rising healthy ingredients usage in convenience foods.
The global convenience food retail market size attained a value of $848.5 billion in 2018. Furthermore, the revenue is experiencing an uptick with a CAGR of 4% over the forecast period 2019-2025.
Innovations Promoting Ease Are Driving the Convenience Food Market in Retail Space
E-commerce has been a disruptive force lately growing with the increasing customer demands. In the world of digital convenience and online shopping, customers are inclined towards interactive experiences. So, the convenience stores are cashing on this trend with the help of innovations that offer ease to the customers. For instance, Durham Co-op Market of the U.S. observed that the consumers are not interested to spend time in slicing turkey or ham. So the team took the initiative to cut the meat and other cheese products ahead of the time to meet with the customer demands. This instance boosted the meat sales by 4 times after offering hand-cut and packed food products to the customers. Such illustrations which enable ease of access for packed and fresh foods are dominating the convenience food retail market.
Cognitive Technologies Suggesting Assortment of Customer’s Shopping Cart Trending in the Convenience Food Retail Market
To stay ahead of their peers, the retailers are also embracing technological innovations to enhance their operations to attract consumers. Retail stores such as hypermarkets and supermarkets are leveraging on AI to strengthen their customer reach while taking the plans to automate, expedite, and optimize the shopping experience. In 2019, Microsoft along with Kroger announced data-driven connected stores in Washington and Ohio. They set a long-term plan to expand their horizon and sales along with their customer reach with the help of Microsoft’s Azure cloud platform utilized by Kroger stores. Subsequently, this instance has increased the interest of other similar startups to cater to the automation demand among supermarket chains. Integration of sensors, cameras, and cognitive technologies are intelligently suggesting customers in assortment of their shopping cart. Few of these technologies are also paving the way to cashier-less stores which are benefitting the retailers and attracting the customers simultaneously. Thus, these technologies are engaging a large customer-base to the convenience food and grocery stores as they are offering ease, speed, and convenience to the customers. Therefore, the demand for the convenience food retail market is thriving with the emergence of cognitive technologies in retail stores.
Digital Presence of Retail Stores Boosting the Convenience Food Retail Market Growth
Physical stores are increasing their digital presence to boost their presence in the convenience food market. The consumer-facing technology engaged by the stores enables the shoppers to research enough about the food and buy it. For instance, mobile applications that guide customers during shopping which is similar to their in-store experience and the shopping cart data of the customers are used as powerful tools by the retailers to stay ahead of the online competitors. Innovations as such by the players are surging their presence, profits, and businesses on the whole. Thus, the growing digital presence of retailers is engaging potential customers of the convenience food retail market and surging the sales.
Food Safety in APAC Driving the Demand for the Convenience Food Retail Market
APAC is one of the major regions in the global convenience food retail market as of 2018. Huge population growth and rising urbanization coupled with changes in lifestyle are increasing the consciousness of consumers towards food safety. Thus, the region is experiencing a huge growth of healthy foods that are ready-to-eat which are often integrated with their local cuisine. For instance, western cheese with cream is used in local cuisine foods of Asia. Subsequently, convenience stores are surging at a rapid pace in Asia owing to their fresh food offered when compared to online stores. The increasing sales experienced by these markets are allowing them to explore foods that aimed to promote frequent customer visits. Furthermore, countries such as Malaysia, Thailand, and Indonesia along with Japan are experiencing rampant sales of ready-to-eat meals such as rice and noodles owing to their popularity as holiday destinations. These ready-to-eat meals which can offer proteins and carbohydrates in a single meal are gaining significance among the Asians. Along with that, stringent food regulations in India and China are driving the convenience food retail stores to include properly labeled and packaged food products. As a result, the convenience food retail market demand is increasing in APAC.
Ready-To-Eat Segment Is Experiencing Lucrative Opportunities in the Convenience Food Retail Industry
The ready-to-eat segment is the fastest-growing category in the global convenience food retail market rising at a CAGR of 2.9% over the aforementioned period. Increasing millennial population along with their busy lives which became too hectic to cook are propelling the growth of ready-to-eat food market. These foods need little or no processing duration and have good shelf-stable life which requires minimal or no heating. They include packed food products and retort processed foods with a wide range of products including bakery, dairy, snacks, and desserts. Besides, taste and price are the two major factors driving the sales of these ready-to-eat products around the world. Consequently, simple food which offers good nutritious values and cost-effective are favored by the people when shopping in the retail stores.
Furthermore, more than half of the consumers snack at least once in a day and 1 in every 4 reported that they snack multiple times in a day. Also, they suggested that frequent snack-eaters are susceptible to cravings, convenience, and habit. These figures demonstrate that the demand for ready-to-eat food is predominant around the world. Retailers are winning this space as they offer freshly prepared foods when compared to their peers. Therefore, the ready-to-eat market is experiencing lucrative opportunities in the global convenience food retail market.
Convenience Food Retail Market – Key Players
Companies such as Nestle S.A., Pepsico Inc., Unilever, Kellogg’s Company, General Mills, Kraft Food Group Inc., WH Group, Mondelez International Inc., Tyson Foods Inc., and JBS SA held a significant part of the global convenience food retail market share.
Few of the key strategies taken ahead by the dominant players of the global convenience food retail market include:
Expansion - In 2019, 7-Eleven, Inc., Japanese-American international chain and the world’s largest convenience (retail) store chain signed an agreement with Future Group, an Indian company predominant in retail and fashion sectors. As part of this agreement, SHME Food Brands, a retail subsidiary of Future group will open new stores and convert the already existing stores under the 7-Eleven brand name. This strategic relationship between 7-Eleven and Future Group allows the former to bring their convenience and iconic products and penetrate their business models into India and localize as per the Indian consumers’ demands. These products mainly include snacks, fresh foods with local recipes, and beverages which are available as part of their initial convenience offering.
Product Launch - In 2019, Target Corporation, one of the largest retailers in the U.S, introduced Good & Gather which marks the company’s new flagship food and beverage brand. The Good & Gather brand is made up of no synthetic colors, artificial sweeteners and flavors, and high-fructose corn syrup. Focusing mainly on children, signature, and organic lines, the product portfolio includes avocado toast salad kits, milk, cheese, eggs, and beet hummus. Supposedly, the company will include more than 2000 products by the end of 2020.
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