The food sector can maintain its growth this year despite the slower pace from last year. With the rising mobility of the consumers, it is natural to see a slowdown of home cooking occasion and its impact to the Food sector.
Being the most growing sector in the FMCG industry, Food sector is standing still as the main contributor of the industry. The growth in 2021 was driven by Pantry categories with double digit growth, higher that its counterpart, Snacking categories.
Cooking Aids and Instant Food segments manage to grow driven by both price and volume, indicating relevancy of both segments remains high among the consumers. Besides, bigger basket size shows an upsizing trend in the categories.
The driving categories in Cooking Aids segment are Chili Sauce, Cooking Oil, and Coconut Milk. Meanwhile for Instant Food segment, the drivers are Canned Food, Instant Soup, and Frozen Food. All driving categories grow in double digit mode, leaving a terrific opportunity to be leveraged further.
From consumers’ social class perspective, in 2021, growth is seen across all social classes. Upper class, who naturally have more purchasing power, expand their category selection. While the lower class, on the other hand, enter new categories as more brands are opening the access for this group.
General Trade remain as the backbone for Pantry Essentials categories as the channel become an extended pantry for consumers. They can reach out the store easily if running out. General Trade is scored at double digit (12%), higher than Modern Trade that can only grow at one digit pace. Online channels, despite its small contribution, show a rapid growth that cannot be ignored.
The Trends
Although the mobility is recovering and people have started to go out, in-home cooking is still relevant. It is reflected by the increasing number of average categories bought from the previous year. On top of it, the trend among Cooking Aids keeps increasing throughout 2021 compared to Instant Food that goes more stable after the Festive period.
Consumers are also looking for products that can elevate their home-cook meals such as Seasoning Sauce and Meal Maker. For example, one of Seasoning Brands gain more than 30% penetration in last year only. As for the Meal Maker, the One-Step types including Fried Dish, Stir Fried, Soup/Soto, and Special Dish are growing, driven by special local dish like rendang, rawon, and opor ayam.
The in-home cooking occasion trend is relevant across shoppers’ age. Spend per buyer growth is seen in shoppers aged 36 and above. For younger age group, higher spend is also seen but frequency is only maintaining, hence an opportunity to reach them and prolong their purchase.
Some key categories in cooking aids show growth in medium and big pack, such as Chili Sauce (medium bottle), Soy sauce (big pouch), and Stock soup (Big Pack). These three categories gain almost 3 million new buyers throughout 2021 alone.
Trendy foods that come around during the pandemic offer new taste and delicacy for consumers and it has been well welcome. This means that consumers are willing to expand their palate and their dish options even during the stay-at-home period. This is a calling for brands to stay ahead of ever-changing trends to capture consumers’ flavour interests. Some brands from Instant Noodle category have adapted to this trend through unique Flavors like spaghetti, rendang, and Singaporean laksa and the innovation has been well received; seen from good recruitment to enlarge overall brand buyers.
Aligned with the overall lifestyle trend that arises during the pandemic, more buyers are looking for healthier options on top of their current cooking repertoire. For instance, healthier options are now available in Instant Noodle and Seasoning categories. For Instant Noodle, a brand with healthier option perception has been well received by the consumers that able to recruit over 20 million buyers. Some brands in other categories like Canned Fish, Seasoning Flour, and Cooking Oil utilize their communication platform to spread the health and functional benefit of their products.
The robust growth of Frozen and Canned Food in the past 2 years is seen across consumers groups; indicating a high relevancy of this category. The driver in Frozen Food category is sausage and meatball, while in Canned Food is Canned Fish and RTE Sausages.
In addition, an interesting trend happens in RTE Sausages in 2021. Typically, RTE Sausages category is skewed to mid-lower-class families with young kids. However, a premium brand manages to provide an option for their core buyers to have RTE sausage and become the first in premium market. The innovation is promoted alongside the relevant message of simpler way of cooking and easier meal prep. As a result, the brand can reach the core buyer of upper class as well as both young and older consumer groups.
To The Next Level
Based on Kantar’s forecast, the growth of Food sector in 2022 will be at 6.3%, similar with 2021. This is with the assumption of mobility to continue at the current pace and the economy as well.
So how to take the growth of the Food sector, especially in Pantry Essentials, to the next level?
The consumption of snacking categories, according to Kantar Worldpanel data, is divided into two big sections: in-home consumption and on-the-go consumption.
As people mobility evolving, in-home consumption for snacking is higher in 2021 compared to last year which is reflected in higher growth than on-the-go consumption. However, on-the-go consumption stands as the main occasion for snacking. School age kids also become the main buyer group for snacking on-the-go. With school from home regulation remain in place, less occasion for on-the-go consumption slows down the growth in the category. As a result, higher in-home occasion for snacking is spotted.
With more in-home occasion, family pack seems to be relevant for the occasion. Besides, the pack offers better value for money, hence this pack size can grow well throughout the higher occasion for in-home snacking. Some key brands manage to recruit new buyers from their big pack and adding thousand new buyers.
Innovation in Snacking categories is important to ignite excitement in the market and to expand buyer base. The innovation is not limited to new flavours only, but also in new segment, new packaging, and new communication. One of the successful innovations come from a biscuit brand that taps into the Flat Wafer segment and gains more than 5 million new buyers within one year of launch in 2021.
Another successful innovation comes from the flavour side, where some brands adopt local and unique flavours like pandan, balado, and butter caramel. The buyer base of brands that take part in this flavour innovation reaches up to 1.7 million new buyers.
In 2020, Snacking categories’ uplift during Festive period is limited as consumers focus more on basic staple needs. In 2021, penetration of gifting on Biscuit category has been gradually improved as people start to indulge themselves like pre-Covid time. So, it is expected to see the bigger bounce of the gifting occasion in Biscuit category during Festive 2022.
A slightly lower growth of 6.1% is forecasted for snacking in 2022 with a note of consideration in mobility level and Covid cases. Here are the three future-proof strategies for manufacturers to take Snacking to the next level in 2022.
