Convenience is one of the major food trends of the year, and it does not seem to be slowly down anytime soon. Driven by busy lifestyles and an ageing population, new players from e-commerce, online shopping, food delivery and more are entering the market, and the industry is keeping pace with the demand for better-for-you fast options. Three experts from the Convenience panel at FIA Food for the Future Summit – Jocelyn Chng, CEO of JR Group; Ajay Sohoni, Digital Director (ASEAN) of The Coca-Cola Company and Shirley Zhu, Programme Director of IGD Asia – sit down to answer some questions on this trend. On the 25th of April, they will also be joined by Tomaso Rodriguez, Head of Grabfood, to discuss more on the impact that this rising trend has on the food industry.
Internet retailing has seen dramatic growth across the food industry and has brought about the emergence of new purchase models such as “click and collect”. Do you think this affects the purchasing habits of consumers? If so, how?
Shirley Zhu, IGD: New models such as “click and collect” and on-demand services are just some of the ways the food industry has innovated to adapt to consumers’ and shoppers’ key needs, specifically convenience. For example, Walmart’s “Scan & Go” enables shoppers to scan the products as they shop and pay on their mobile phones, while retailers such as Cold Storage, Cheers, and habitat by honestbee in Singapore all offer self-checkout services. Consumers will definitely be the winners from all the new trials happening across the industry right now.
Jocelyn Chng, JR Group: Demand for food that is both convenient and tasty is a key driver for online food retail, amidst today’s busy schedules. As consumer confidence in online purchasing grows, consumers also want more options, and a wider range of categories. We also see the line between online and in-store shopping increasingly blurred – more online retailers are opting to set up physical outlets to deliver a streamlined shopping experience, while traditional retailers are also establishing their online presence. Such initiatives have further accelerated the demand for and accessibility of easy ordering, fast delivery, and quick returns among consumers, which builds consumer confidence and further drives online retail. In addition, consumers are already spending much of their time online, making it easy for retailers to market to them.
Ajay Sohoni, Coca-Cola: Beyond convenience, internet retailing definitely has its impact on purchase behaviour. Shelf space is now almost unlimited, and every shopper gets to see a different “digital shelf” based on his or her past behaviour patterns. Shopping duration is also now a lot longer, where we find shoppers filling up the basket as and when they feel like it and then checking out once a week, which gives brands like us more time and possibilities to create purchase intent. Lastly, shoppers are also going from anonymous cash transactions to known transactions thanks to digital payments, which leave a trail of consumer data that brands are able to analyse for better subsequent marketing.
In the past, convenience foods were not typically linked to health and wellness, but this has changed in recent years as manufacturers find ways to reinvent their products. What can the food industry do to better leverage on innovation to deliver healthy convenience foods?
Shirley: Health and freshness is a key trend IGD Asia has identified that is shaping Asia’s grocery retail market this year. Asian shoppers are increasingly aware of the importance of healthy living, fresh food, nutrition, and product sourcing. Retailers are responding by highlighting healthy ranges and freshness, while manufacturers are developing and bringing healthier choices to the store shelf. This is demonstrated by the research we conducted together with FIA on healthier reformulation in Singapore. However, it is not without its barriers, as some companies find sourcing healthier ingredients challenging, and feel that more government incentives would encourage greater R&D in the industry.
Besides ingredients, the food industry is also providing healthier options for easier consumption, such as healthier ready-to-eat meals, and designated ‘health and wellness’ zones in-store. For example. the latest FairPrice finest store on Orchard Road has a very strong health theme.
Jocelyn: More people are now willing to invest in technology to bring about convenience, and more food tech solutions are available to help manufacture nutritious convenience foods. The use of smart data also provides companies with the necessary insights into consumer purchasing patterns and preferences, allowing them to adapt their products accordingly.
Local manufacturers have been effectively leveraging the latest technologies to retain nutrition in foods without compromising on taste, while also providing greater transparency, which helps consumers to be more open to accepting new products. For example, Chef-In-Box meals are all handcrafted by chefs using fresh ingredients, with no added preservatives or additives, with freshness and nutrition locked into the bentos using cook-freeze technology. Nonetheless, it is still necessary for the industry to invest the time and effort in changing consumer mindset on convenience foods, and to educate them on the benefits of ready meals.
Ajay: Companies need to use the same benchmarks for convenience foods as they do for other food and beverage (F&B) products. Low sugar/no sugar beverages for instance, are a priority for us, regardless of which occasions or which channels they are served in. Companies also need to innovate to create other ways of driving healthier choice, such as smaller pack sizes. Clear and consistent communication on-pack to facilitate consumer choice is another priority for us. It is also important for the quick service restaurant (QSR) and food service segments to take bold steps in testing and rolling out low-calorie options and actively shaping consumer choice.
What do you think is most needed for food companies to stay ahead in today’s changing consumer landscape?
Shirley: Businesses that can adapt quickly to consumers’ needs definitely have an advantage. Besides offering healthier products and more convenience, we also see partnership as one way for businesses to expand both within individual markets and across borders. Shopping via social media platforms is also a key route to market in the region, where businesses must truly understand the landscape and have a clear social media strategy in order to engage shoppers and stay relevant. Last but not least, technology is revolutionising the food and grocery industry in Asia, which could have big implications for how shoppers interact with brands in store in the future. Businesses need to understand which technologies are set to have the biggest impact on their businesses.
Jocelyn: What is most essential is to understand the needs and pain points of the consumer as well as other F&B operators. We need to understand what the consumer wants so that we can work on adapting our products and operations to deliver what the consumer needs.
Ajay: One word – agility. The sheer proliferation of occasions, tastes, markets, channels, and media has fragmented the traditional consumer journey into hundreds of possibilities, and they are multiplying. For F&B companies, the key is to offer this endless choice to consumers, while managing productivity and returning to shareholders what they expect. It sounds like an impossible feat, but that is where technology comes in, and how agile a company is on adopting technology and weaving it into ongoing business will decide if you stay ahead or not.