The COVID-19 pandemic has pushed customers to purchase food & beverage products online. Food & beverage manufacturers are cashing in on the potentiality of the food e-commerce sector. According to the Brick Meets Click/Mercatus Grocery Shopping Survey, the U.S. online grocery garnered USD 8.1 billion in sales during October 2021. With the COVID-19 cases declining in October, order frequency, monthly active users, and average order value have rebalanced from the highs of 2020. The organization also noted that around 50% of the U.S. households bought groceries online during October 2021.
Food e-commerce activity has gained a notable uptick as lockdowns compelled consumers to purchase more products online. The growth of the food e-commerce sector could be pronounced over the next few years. Business Research Insights has projected the market for food e-commerce to touch USD 393,657 million by 2025.
With COVID-19 cases subsiding, major companies are expected to develop a food e-commerce strategy and emphasize tremendous time and information management. Some of the major companies, which could reshape the global dynamics are delineated below:
1. Amazon
Founded in 1994, Virginia-based multinational company, Amazon, specializes in e-commerce, artificial intelligence, cloud computing, and online streaming. The American company uses Amazon Air, Amazon Flex, Amazon Prime Air, and Amazon Logistics, among others to deliver packages. In September 2021, Amazon teamed up with Deliveroo, the U.K. food delivery firm, to enable Amazon Prime members in the U.K. and Ireland to access the lower tier of the Deliveroo Plus service.
2. Walmart
Walmart is a U.S. multinational retail company founded in 1962. The company has 10,585 stores and clubs across 24 countries, operating under 46 names. The retail corporation has wholly-owned operations in South Africa, Chile, and Canada. The company is boosting its capacity across its channels to keep up with the demand for food at home. For instance, in September 2021, Walmart joined hands with Meredith Corporation to help customers plan and prepare meals faster.
3. Alibaba Group
Alibaba Group is a China-based multinational company dealing in retail, e-commerce, technology, and the internet. Headquartered in Hangzhou, the company was founded in 1999 and provides Business-to-Consumer (B2C), Consumer-to-Consumer (C2C), and Business-to-Business (B2B) sales services through shopping search engines, electronic payment services, web portals, and cloud computing services.
4. Sainsbury's
Founded in 1869, Sainsbury's is reportedly the second-largest supermarket chain in the U.K. The London-based company has improved the convenience of its online fulfillment as investments in online channels have spurred picking rates and basket size. The company has promoted SmartShop, its in-store shopping app, to enable customers to scan products as they go around a store and skip checkout queues.
5. Rakuten Group
Rakuten Group is a Tokyo-based online retailing and electronic commerce company founded in 1997. The company operates in 30 countries and regions with more than 70 businesses and 1.6 billion members globally. Rakuten has expedited plans to attain carbon neutrality as it plans to convert all electricity used to 100% renewable energy by 2023.
6. Tesco
Tesco is a U.K. multinational groceries company based in England. The company was founded in 1919 and reportedly has more than 345,000 employees. In May 2022, Tesco rolled out a Better Baskets campaign to help customers looking to fill their baskets with better choices. The company claims 50 billion calories have already been removed from Tesco products, and it contemplates removing 50 billion more by 2025.
7. Kroger
Kroger is a U.S. retail company that operates multi-department stores and supermarkets throughout the U.S. Kroger, founded in 1883, has close to half a million employees. The company has almost 2,800 stores in 35 states under two dozen banners. Kroger asserts it is the only major U.S. supermarket company to operate an economical three-tier distribution system.
The Way Forward
With vaccinations becoming prevalent and brick-and-mortar restrictions easing, food & beverage manufacturers could rethink their food e-commerce strategies. Companies will gear to capture the inorganic and organic rise in demand. Increased price transparency could expedite the shift to online sales as consumer purchasing behavior fluctuates. A few consumers could return to their pre-pandemic shopping habits. Moreover, disruptive trends indicate a shift toward online grocery pickup or delivery for convenience and efficiency.