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Global markets to see 200 per cent growth in online food shopping
New research launched today by research organisation IGD in association with The Consumer Goods Forum anticipates transformation ahead for online food and grocery retailing. Across three critical markets it forecasts the following growth rates:
- UK: online grocery sales to grow by 48 per cent by 2022 and account for 7.5 per cent of the total UK grocery market
- China: online grocery sales to grow by 286 per cent by 2022 and account for 11.1 per cent of the total Chinese grocery market
- US: online grocery sales to grow by 129per cent by 2022 and account for two per cent of the total US grocery market
Due to be highlighted at The Consumer Goods Forum’s annual Global Summit in Singapore in June, the latest insights argue there are three main reasons why no grocery retailer or supplier can afford to downplay online retail:
- Across most of the world, online is already a fast-growing channel
- Online and offline are merging, with an online store vital to complement physical stores
- The digital world evolves faster than the physical one and online stores will become increasingly compelling
With over half (54 per cent) of food and grocery businesses only just starting to prepare for tomorrow’s digital transformation and 11% yet to begin, IGD has set out its vision of the online store of the future and what it will mean for retailers and manufacturers.
Based on a survey of 223 senior industry members across 42 different markets and a series of in-depth interviews, digital experts expect to see dramatic changes in the competitive landscape.
Seventy-eight per cent of respondents think shoppers will use online price comparison services more regularly to switch to the cheapest retailer, while 67 per cent believe shoppers will be able to choose from a wide range of specialist online retailers underpinned by a common and consistent delivery service. Additionally, 75 per cent expect more manufacturers to sell directly to consumers online.
Combining industry input with IGD’s global team of experts, the research concludes that the online store of the future will contain five key features:
- It will be a shopper’s personal micro store offering individualised and online-exclusive products, personalised promotions, recommendations, advertising and loyalty schemes. 69 per cent of respondents believe some retailers will apply personalised pricing and promotions in future. An additional 77 per cent think almost all digital communication to consumers by retailers will be personal.
- It will act as a smart personal assistant, connecting with various devices, preventing shoppers from running out of products and supporting their lifestyle goals. Nearly two thirds (60 per cent) of the experts surveyed predict that smart devices automatically re-ordering products will become a firmly established way of shopping for many people. The shopping experience will also be more inspirational, through personalised planners and sophisticated digital assistants like chatbots. 71 per cent of respondents expect some retailers to provide a service to offer personalised dietary guidance.
- It will be more efficient for shoppers, easier and quicker to order products. Login and payment will be available through facial, voice or touch recognition technology. Shoppers will incur less waste, with a greater choice of pack sizes and meal planners to help manage quantities and advise on using leftovers. A better fulfilment service will be on offer with more deliveries, on time and in full and products delivered at the right quality and freshness.
- It will help give shoppers a frictionless combined offline and online shopping experience. People will switch seamlessly from shopping online and instore with data cross-referenced between the two. This will help bring more personalisation to the physical store and help shoppers find their favourite products quickly and discover new ones. This is an opportunity that many companies need to work on with over half (53%) survey respondents saying they haven’t or have only just started to integrate their online and offline teams.
- It will at times be invisible, with shoppers buying products from shoppable digital content such as videos, photos and social media. In the future, people can be shopping at any time. There will be no limits to when you can be shopping. China has been leading the merging of media, entertainment and shopping, and Europe and North America will follow.
Food and grocery sector driving Australian manufacturing
The food and grocery sector is 30 per cent more valuable to Australian manufacturing than it was 10 years ago, according to new research by consulting firm EY.
This is largely a result of Asia’s growing middle class and the demand for Australia’s produce, according to the research. The sector has been aided in recent years by Australia’s strong export ties, particularly the 2015 China-Australia free trade agreement.
Australia’s reputation for producing clean and green products is also key in the sector’s growth, according to EY agribusiness partner Andrew Metcalfe.
“While domestic conditions remain challenging, food and grocery processing is an area of strong export growth with an 11 per cent surge in food and beverage exports to $26b last year,” Australian Food and Grocery Council chief executive Tanya Barden told The Australian.
“The results show a huge potential for huge growth.”
The food and grocery manufacturing sector is currently worth $126 billion, and employs over 300,000 Australians. Its growth over the past year was almost three times higher than that of the next-largest manufacturing sector, machinery and equipment and fabricated metal.
Coopers continues strong growth
Coopers brewery has ended the 2015 calendar year in record territory, boosted by strong sales of Coopers Original Pale Ale and Mild Ale 3.5 per cent.
For the 12 months ending on the December 31, 2015, Coopers sold a record 80.7 million litres, a 4.4 per cent increase on the 77.3 million litres sold in calendar year 2014.
Coopers’ flagship product, Coopers Original Pale Ale, continued to perform strongly, with national sales rising 3.2 per cent during the year. It now accounts for 52 per cent of Coopers’ total beer sales.
Mild Ale 3.5 per cent enjoyed a 13.7 per cent increase in sales during 2015 and is now Coopers’ third largest product by volume behind Sparkling Ale, which recorded growth of 1.8 per cent for the year. Coopers Stout sales rose by 8 percent for the year.
According to Coopers Managing Director Tim Cooper, the 2015 results had been especially pleasing, given the continued overall fall in beer consumption in Australia.
“While Australia’s total beer consumption has fallen almost 10 per cent in the past six years, despite a growing population, Coopers’ sales have been on a solid growth trajectory for the past 22 years,” Cooper said.
“The latest results mean Coopers now has 5 per cent of the total Australian market. The eastern states continue to be Coopers’ major area of growth, with total sales in Victoria, NSW and Queensland growing by 7.4 per cent during 2015. Western Australian sales grew 5.5 per cent.”
An agreement with US craft brewer, Brooklyn Brewing came into effect late in 2015, but had only had a minor impact on results, although early sales had been strong.
Sales of Thatchers Gold cider, which is distributed in Australia by Coopers, rose 37 per cent during the 2015 calendar year.
For the six months to December 2015, Coopers sales grew 4.5 per cent over the previous corresponding period.
Dr Cooper said Coopers was looking forward to achieving 23 years of growth by the end of the current financial year.
This would also be supported by the release of Carlsberg 3.5 per cent mid-strength lager in February, adding further to the strong international beer portfolio already in place.
Coopers lager packaging will also be refreshed to stimulate interest on the back of the packaging upgrade of Coopers Clear in 2015 which has been well received by consumers.