Who’s Benefitting from the COVID Grocery Boom? Trends to Watch in 2 Fast-Growing Markets

Who’s Benefitting from the COVID Grocery Boom? Trends to Watch in 2 Fast-Growing Markets

The grocery sales boom triggered by the COVID-19 pandemic is boosting near-term sales opportunities in an array of adjacent markets, including vacuum skin packaging (VSP) used in food applications and cold (refrigerated/frozen) display cases:

  • In the VSP market, increased meat sales (the leading VSP food application) combined with heightened concern about hygiene amid the pandemic will bolster VSP use.
  • In the cold display cases market, elevated revenues could lead grocery retailers to invest in renovations, such as upgrading cold cases to new models featuring technologies that can increase store sales.

Two new Freedonia Group studies highlight the best growth opportunities for these products through the pandemic and beyond. Below are some of the key trends to watch.

Meat Applications to Account for 32% of VSP Market Gains Through 2024, But Seafood to Grow Faster

Demand for VSP used in food applications is forecast to rise 7.9% annually to $117 million in 2024. Meat applications will continue to account for the largest share of VSP demand gains through 2024 (32%) even as all other segments (i.e., poultry, seafood, and cheese/other foods) are projected to see faster growth. Beef, pork, and other meat products will continue to account for the largest share of vacuum skin food packaging demand, supported by VSP’s ability to:

  • accommodate different shapes, including those with high protrusions and sharp edges
  • improve product taste
  • extend product lifespans

In meat applications, VSP is seeing the greatest expansion in the more expensive meat segments – such as steaks, bison, and lamb chops – as VSP helps impart a premium image and differentiate these products from lower end meat varieties.

Meanwhile, seafood applications are expected to register double-digit annual growth for VSP demand through 2024, the fastest rate of any food market segment, supported by:

Still, seafood applications will continue to account for less than 20% of total VSP food demand, due in part to the fact that most seafood consumed in the US will continue to be imported and packaged overseas (such packaging demand is excluded from the data in this report).

COVID-19, Changing Consumer Behavior Offering Opportunities for Cold Display Cases

The above average spike in grocery sales also has potential to benefit suppliers of cold display cases, as higher revenues will increase the affordability of store renovations, such as upgrading display cases:

  • A strategic investment for grocery retailers, display cases increasingly feature technologies that can bolster sales by improving efficiency or better showcasing the items they hold.
  • However, while some retailers may use their profits to replace old equipment with new models, others may choose to delay renovations until the impact of the pandemic is more certain.

Through 2024, demand for refrigerated and frozen display cases is forecast to rise 5.5% annually to $1.6 billion, an improvement over the 2014-2019 performance. In addition to replace and upgrade sales, key sales drivers include:

  • the growing number of nontraditional food retail settings where display cases are being installed
  • ongoing construction of micro-market vending systems, which utilize display cases and a separate point-of-sale system instead of a traditional vending machine

Changing consumer behavior is also creating opportunities for display case sales as more consumers are opting for food e-commerce services such as third-party grocery delivery and in-store/curbside pickup. The increasing popularity of these services is expected to have a modest impact on display case demand, as some goods ordered through these services need to be stored at a low temperatures while awaiting pickup at the front of the store.

Looking for More?

Vacuum Skin Packaging and Refrigerated & Frozen Display Cases are now available from The Freedonia Group.

About the Author:

Peter Kusnic is a Content Writer with The Freedonia Group, where he researches and writes studies focused on an array of industries.

  Consumer Goods      Industry Studies      Machinery & Equipment