What 2021's Grocery Trends Mean for Food and Beverage Brands
For those of us whose businesses depend on a reliable supply chain, “the new normal” is a comfortless phrase. The pandemic left no industry untouched by supply chain disruption, and it has left businesses wondering what hoops they will have to jump through next to stay competitive. For businesses that supply food and beverages to grocery retailers, this is doubly true.
Every aspect of the grocery industry’s supply chain has been challenged since 2020 and food and beverage producers have had to be agile to respond. It has made many food producers reexamine their view of their supply chain and reinvent their processes to cope with uncertainty. But looking forward, it is equally important for these businesses to prepare for the one thing that is certain: grocery shoppers have changed their behaviors. Trends have emerged in 2021 that will impact the strategies of both retailers and suppliers in the years ahead. Fortunately, these new consumer demands and the supply chain issues they create can be tackled with a combination of the right technology foundation and strengthened supplier-retailer partnerships.
Here are just a few key grocery supply chain trends and consumer behaviors food and beverage brands should keep in mind as we move into 2022.
A Growing Preference for eCommerce
The pandemic forced consumers to explore new ways to obtain their everyday food and beverage items, encouraging them to make fewer in-store visits and increase their use of online options. A recent McKinsey grocery trends report estimated that while only 4% of groceries were bought through online orders in 2019, the pandemic accelerated the growth of the eCommerce grocery market by about five years. Today, 10–15% of groceries are bought through eCommerce, and that number can be higher in densely populated urban areas.
You can’t blame consumers for making online grocery buying a lasting preference rather than a fleeting trend. Having discovered new levels of convenience, it would be difficult for grocery customers to go back to the old ways of doing things.
Grocery retailers have bent over backwards to meet consumers’ need for online options despite the challenges this represents for packaged goods with limited shelf-lives and traceability requirements. The food and beverage suppliers that are going to be most competitive going forward will be the ones who make it easier for retailers to keep their products on the shelf wherever they are needed.
Automating data transmission between you and your retail partners using electronic data interchange (EDI) not only makes operations more streamlined in terms of order fulfillment and warehouse management, but it eliminates errors that can cause costly delays and product losses. TrueCommerce has tailored grocery supply chain integrations to help food and beverage brands work with retailers to ensure that customers aren’t disappointed by stockouts, even when demand increases.
Catering to the One-Stop Grocery Shopper
Another reason grocery retailers have had to rethink the way they do business is that in the wake of the COVID-19 crisis, consumers have become accustomed to making fewer shopping trips every week. As a result, consumers who have traditionally sought out a variety of retailers for their fresh food, canned and boxed goods, household items, and niche products now want to buy as much as they can in one place. Grocery stores have had to expand their product mixes, which represents an opportunity for smaller brands that are seeking new retail partnerships. Food and beverage manufacturing software enables even small producers to align their businesses with top retailers who require EDI capabilities to do business.
As consumers consolidate their shopping trips, there is more pressure than ever to ensure that limited shelf space is optimized with the perfect mix of inventory, including your products. Food and beverage businesses that have not explored advanced inventory management like collaborative replenishment solutions should invest in them now so they can be ready to meet their partners’ needs for on-shelf availability. This type of solution can also help manufacturers and retailers stay a step ahead of the shipping complications we’ve become all too familiar with over the past year and a half.
Empowering the Omnichannel Retailer
Every business along the grocery supply chain has become acutely aware of the need to serve customers not only in brick-and-mortar stores but through reduced-touch options like curbside pick-up and BOPIS as well as home delivery. To continue to meet that elevated desire for convenience in the long term, grocery retailers have added a lot of complexities to their inventory management practices, often offering customers near-real-time views of in-stock items.
Food and beverage businesses that want to help their retail partners maximize sales can use the advanced forecasting analytics and inventory management tools that vendor managed inventory (VMI) provides. TrueCommerce VMI gives some control over restocking to suppliers, who can use the technology’s predictive capabilities and automated alerts to keep their items in stock at ideal levels—an arrangement that protects both parties’ bottom lines.
One benefit of enabling your business with both EDI and VMI is that it makes it much easier to add third-party logistics (3PL) partners if it will serve customers better. These technologies keep all parties on the same page so that everyone can have greater visibility of the entire supply chain and make better predictions about what products need to be shipped when. TrueCommerce’s Pack & Ship integration can also keep shipping costs lean by shopping for the best rates among multiple carriers and helping warehouse staff pack perfect truckloads using 3D visualization tools.
A Move Toward Healthy, Home-Cooked Meals
The pandemic gave many of us more time to focus on health, and as restaurants closed, consumers gravitated to healthier eating habits and spending more time in the kitchen. That has created a grocery trend that seems to have some staying power. Food brands can stay ahead of the game by bundling products, or even collaborating on combinations of their products and those from other suppliers, to create ready-to-eat and ready-to-cook meal package options for home use. EDI makes it easy to connect with top grocers, suppliers, 3PLs, and cold storage partners so you can focus on opening up new opportunities for your business.
Use EDI to Keep Up with Grocery Trends
To stay competitive in the food and beverage space, having strong supply chain relationships is going to be more important than ever. By automating the exchange of data, grocery supply chain partners can increase their agility and stay in step with consumers’ increased need for convenience and choice—without sacrificing their margins.
If you are wondering which solutions can help you prepare for the changing grocery landscape, TrueCommerce is here to help. Reach out to one of our supply chain experts today to see how EDI can change the way you do business.
About the Author: Brian Lindner is the Director of Field Marketing at TrueCommerce. He has spent the last 15 years in B2B project management and marketing. His focus is on Vendor Managed Inventory and related eCommerce solutions that help companies save time through automation. Brian enjoys spending time with his wife and 2 kids and in his spare time brews delicious craft beer with his friends.