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  1. Analysis
November 12, 2019

Keeping it real – plotting the likely UK food industry trends of 2020

Andy Coyne asks key UK food industry influencers and analysts for their predictions of what we are likely to see in the sector in 2020.

By Leonie Barrie

Andy Coyne asks key UK food industry influencers and analysts for their predictions of what we are likely to see in the sector in 2020.

Free Whitepaper
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What is the impact of historically high inflation on the UK consumer landscape?

The average UK consumer is experiencing a severe cost-of living crisis as inflation surges to a forty-year high and the price of goods continues to rise. This shock is the result of the sharply increasing costs of commodities, energy, and the ongoing conflict in Ukraine, and is threatening FMCG manufacturers, retailers, and foodservice operators’ ability to survive and grow. Inflation will have a profound effect on many consumer-facing industries in 2022 and beyond. Consult GlobalData’s new whitepaper, Inflation in the UK: The Impact of Historically High Inflation on the UK Consumer Landscape, to better understand shifts in consumer behavior and their impact on spending patterns, as well as the implications for UK businesses. This whitepaper covers:  
  • Why has global inflation returned with a vengeance?
  • What is the current inflation situation in the UK?
  • What impact is inflation having on UK retail sales?
  • What tactics are businesses relying on to tackle the effects of high inflation?
  • How are consumers changing their behaviors to cope with the higher cost of living?
  • Which industry sectors are most vulnerable to reduced consumer demand?
  • How is the government responding to high inflation?
  • How long will high inflation last in the UK?
  • How can your company survive and thrive in a high inflation environment?
Enter your details here to receive your free whitepaper and ready your business for these increasingly uncertain times.
by GD50 Custom
Enter your details here to receive your free Whitepaper.

Food companies don’t start with a blank piece of paper on 1 January and nor do food trends fit neatly into calendar years.

They emerge, evolve and overlap from one year to the next and manufacturers and retailers will take the consumer temperature to work out which trends are quirky, which may have a chance of succeeding and which are simply too hot to ignore.

Trends are often linked to product innovation but that product innovation may in turn be linked to mega-trends such as health and wellness and sustainability which are likely to be with us, in one form or another, for years, or more likely decades, to come.

But a number of market watchers believe manufacturers linked to some of the trends we have seen in the UK this year – plant-based products and the rise of flexitarianism, products promoting better-for-you credentials and sustainability linked to packaging, for example – will have to work harder in 2020 to prove their bona fides to increasingly astute consumers. Transparency and authenticity and are likely to be buzz words next year.

Here are some of the predicted UK food industry trends for 2020 picked out by out panel of experts.

More UK consumers “waking up” to health

While health and wellness will of course remain a huge trend in UK food in 2020, analysts see some subtle changes emerging.

Katie Page, a content director for the consumer sectors, at research and analysis group GlobalData, says: “Health and wellness is still a macro trend. It’s definitely a bit of a perennial but I see it becoming even more holistic. People have woken up to their food ingredients with regards to sugar and fat etc. People are better informed and the onus is on manufacturers to think about their products.

“We may see flavouring from natural sources migrating from drinks to food and an emphasis on ‘no nasties’. But I don’t think we should overstate it. Most consumers are fairly laissez-faire even if some are looking at labels, forcing manufacturers to be more transparent.”

Chris Green, co-founder of London-based Young Foodies, a network for food industry small and medium-sized enterprises, believes companies will have to work harder to demonstrate their health and wellness credentials.

“We’ve now got conscious consumers who want clean labels and transparency,” he says. “When it comes to true, healthy, clean-label, well-being products, a lot of products say they are but that’s not always the case.

“I think this will be consumer-driven. There needs to be a catalyst for change. Gen Z [a demographic term denoting people born since the mid-1990s] is taking the whole authenticity thing to the next level.”

The relentless rise of plant-based and vegan

Consumer scrutiny of plant-based products is likely to increase – after all not all plant-based products are healthy, as sometimes assumed, and there is an argument that soy is used too widely as an ingredient – but our analysts don’t expect to see any slowdown in the phenomenal growth of this category.

Hamish Renton, managing director at UK food and drink consultancy HRA Global, says: “We’ve got to keep talking about vegan, which is getting into convenience and major distributors. I see a move towards pea protein. We will see the decline of soy, which is an allergen.”

Renton adds: “Texturing is a pain in plant-based. Equipment makers need to keep up with the process. But they will get there.”

Page at GlobalData says: “People have incorporated plant-based meals into their lives. For me the big game changer was Greggs’ vegan sausage rolls. For a long time, people were saying that a vegan and vegetarian diet was not providing the same culinary experience [as a meat-based diet] but Greggs’ sausage rolls proved that not to be the case. That will drive up the number who are flexitarian.”

But is there room in the market for such a large number of plant-based products?

John Stapleton, a UK food entrepreneur who has built up and sold food brands New Covent Garden Soup Co. and Little Dish, says: “I would ask that about all these categories – ready-to-drink, healthy snack bars, CBD – everyone rushes in and it becomes very confusing for the consumer. Everyone is saying ‘I’m different from the next guy’. Consumers are buying things based on promotion so there is no brand loyalty. There could be a period of consolidation.”

Indeed, some in the UK plant-based sector have been predicting a shake-out.

Getting personal

As technology improves and consumers become more attuned to seeking out food that fits their health and well-being profile, personalisation is likely to grow.

Stapleton says: “I think we are going to see more around personalisation, especially in the context of nutritional benefits, whether it is DNA, medical history or lifestyle. It’s about putting theory into practice and linking that directly with consumers with consumers imparting information about themselves.”

But can personalisation – by its very nature bespoke – be scaled up?

“That’s the big question, but if you look at online muesli, for example, it offers a range of products. You can choose your own combination of ingredients,” Stapleton says.

He also gives the example of Manchester-based Nourish Fit Food, which delivers food prepared by its chefs to a customer’s door twice a week.

Buying opportunities

So will there be a period of consolidation in plant-based and other innovative product areas, as Stapleton suggests?

Yes, says Page at GlobalData, not least with the growth challenges the largest manufacturers in the industry are facing. “Bigger brands will absolutely be trying to understand how they can diversify their portfolios,” she says.

“The middle ground is a bit safe and boring so the bigger brands have to either innovate or, more likely, acquire challenger brands. But they will then need to give them autonomy as ‘let’s champion the little guy’ is the message from consumers.”

Renton at HRA is unsure whether we will see consolidation in these areas next year.

“It’s still a gold rush so at the moment there’s room for everyone,” he says. “But a couple of the minnows will make it through to compete and the big boys will either have to buy them or create their own versions.”

At Young Foodies, Green suggests deal-making could be focus on investments, rather than outright acquisitions, a strategy largely seen in North America with Big Food snapping up stakes in smaller companies through in-house, VC-style arms.

“With the attention challenger brands have had in the last few years, Big Food has been looking at it, trying to work out their model. My feel is that big food businesses won’t be able to take the risk on early-stage brands.

“No FMCG company wants to miss out but often these businesses are at an early stage and that is much riskier. I don’t think there will be many outright acquisitions but perhaps some kind of different finance model, some kind of professional arrangement to help nurture and unlock value without taking ownership.”

The right package

Packaging has risen rapidly up the consumer agenda in the UK in the wake of the broadcast in 2018 of the Blue Planet II series by the BBC.

Several major manufacturers and retailers reacted by announcing pledges on packaging – and these commitments have continued in 2019. 

The UK’s largest supermarket, Tesco, even warned in August it will take the amount of plastic packaging used into account when selecting which products to stock.

Our market-watchers say packaging will continue to be a hot issue for manufacturers.

Renton says: “I can see cans being used more in things like flavoured milk. Cans are understood by consumers as a format that can be crushed and recycled.

“Tetra Pak-type packaging is plastic-free but not recyclable [in many parts of the UK at present] – it’s still a one-shot use. But, from a recyclable perspective, cans are different.

“I see packaging moving towards easily recyclable credentials rather than sustainable sources.”

GlobalData’s Page adds: “I don’t think the whole landscape will change. There is a place for plastic packaging.

“Consumers are fairly realistic and it needs to be linked to government support and household waste recycling. There is definitely a move amongst consumers to look at alternatives. There are grass-root movements and packaging-free trials.”

Stapleton says the way food products are packaged “has come in for a lot of criticism”, adding: “The packaging industry working with food has not acted fast enough. New brands can adapt more quickly to new types of packaging.”

He can see the introduction before long of a marking system on products which scores a company’s environmental efforts in their entirety.

“The time is right for some sort of climate mark which consumers can relate to. Not just packaging but a brand’s overall green credentials. It would have to get definitions right. And it has to be understood by the consumer.”

Challenger brands and the mainstream

Green at Young Foodies suggests the momentum behind challenger or disruptor brands will see some of them breaking through into the mainstream.

“These brands are the future of the consumer industry,” he says. “We have a campaign to be a bit more vocal and to stress that there is still not a level playing field when it comes to retailers, wholesalers and third party logistics providers.

“There are more challenger brands in existence than there have ever been. Some retailers have opened their doors and adopted these models faster than others. But it is still an industry that is created to work with FMCG multinationals. But challenger brands are too important to ignore them.”

Page at GlobalData also sees movement in this area.

“It’s very hard for small brands to get a foothold in supermarkets but smaller challenger brands do present great opportunities for innovation,” she says. “A lot of new things are coming from small family-run brands. This is coming through in areas such as veganism and product innovation around things such as insects and seaweed.”

The product segments to watch

When it comes to likely product innovation in 2020, our analysts see the hot sauce category continuing its surge.

Stapleton says: “It was a very stale, sleepy category with brands that had been there forever. Disruption has come in with more exciting flavours and pack designs.

“The only issue here is whether the flavour or spice is meant to be there when added to other things. But people are cooking more for themselves and using these sauces so the category ripe for the picking.”

“Renton agrees, suggesting UK consumer appetite for ‘heat’ is being seen across categories. “It’s getting more adventurous. That’s a one way ticket as it’s ready meals, sauces, spices,” he says. “The league table of cuisines is still getting stronger. What was exotic five years ago is mainstream now.”

Renton also sees growth in fermented products – sauerkraut, pickles, miso – and artisan bread but his big tip is the rapid rise of CBD in food.

“We are definitely going to see CBD coming in in a meaningful way. The taste of it is not for everybody but I see it coming in in different things and there will more of  focus on the strength of it,” he says.

Stapleton agrees. “It is huge in the States. It is coming, especially in drinks. It is a cross-category trend. But the legislation has to catch up and it’s not there yet. It will take off in 2020,” he says.

Related Companies

Free Whitepaper
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What is the impact of historically high inflation on the UK consumer landscape?

The average UK consumer is experiencing a severe cost-of living crisis as inflation surges to a forty-year high and the price of goods continues to rise. This shock is the result of the sharply increasing costs of commodities, energy, and the ongoing conflict in Ukraine, and is threatening FMCG manufacturers, retailers, and foodservice operators’ ability to survive and grow. Inflation will have a profound effect on many consumer-facing industries in 2022 and beyond. Consult GlobalData’s new whitepaper, Inflation in the UK: The Impact of Historically High Inflation on the UK Consumer Landscape, to better understand shifts in consumer behavior and their impact on spending patterns, as well as the implications for UK businesses. This whitepaper covers:  
  • Why has global inflation returned with a vengeance?
  • What is the current inflation situation in the UK?
  • What impact is inflation having on UK retail sales?
  • What tactics are businesses relying on to tackle the effects of high inflation?
  • How are consumers changing their behaviors to cope with the higher cost of living?
  • Which industry sectors are most vulnerable to reduced consumer demand?
  • How is the government responding to high inflation?
  • How long will high inflation last in the UK?
  • How can your company survive and thrive in a high inflation environment?
Enter your details here to receive your free whitepaper and ready your business for these increasingly uncertain times.
by GD50 Custom
Enter your details here to receive your free Whitepaper.

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