US & Global Economic Impact Analysis and Forecasts

Freedonia analysts and economists are sharing their insights on how major events are impacting different parts of the US and global economies.

Walmart & HomeValet Widen the Possibilities for Grocery Shopping from Home

Grocery pickup and home delivery has been available for years. But 2020 was the year these services went beyond early adopter demographics – such as frazzled parents and aspiring ladder climbers too busy to muck about the supermarket – and reached the mass market, as shoppers sought to minimize potential exposure to COVID-19.

As much as customers appreciate pickup and delivery alternatives, they are a trade-off. It isn’t the same as going to the store, which allows you to see things that should have been on your list or to consider new items you wouldn’t have looked for online. While ordering paper towels and canned pinto beans is pretty simple, it’s less easy to get bananas exactly as ripe as you need or the perfect cut of beef for a recipe you want to try. And even if your order contains nonperishables like canned soup and breakfast cereal, both pickup and delivery tend to be time-specific (well, maybe not exactly specific, but there are windows, and usually you need to be home for grocery deliveries from local stores.)

Walmart and partner HomeValet may be addressing some of those issues with a new service allowing for anytime deliveries to homes outfitted with HomeValet’s smart box and app. With freezer, cooler, and ambient temperature compartments, the box allows for groceries to be delivered at any time while remaining secure and at the proper storage temperature.

The HomeValet box and service allow for more convenient deliveries and could expand the list of items shoppers will purchase without entering the store. And while you may want to make that trip to choose the beef tenderloin worthy of an anniversary celebration, it could be just right for bags of frozen vegetables, packages of bacon, and loaves of the only kind of bread your kids will eat.

This development is also part of companies such as Walmart beginning to map out their way in a post-pandemic world. Someday, most members of a household will be back at school and working away from home, but they will still want to maintain new shopping habits and take advantage of the convenience offered by online grocery shopping and home delivery.

This market of potential customers is substantial too. According to The Freedonia Group’s National Online Consumer Survey (conducted November – December 2020), 29% of respondents noted they had used a grocery store’s own delivery services for the first time because of the coronavirus pandemic and 35% used grocery store curbside pickup for the first time. Additionally, 30% of respondents noted they were using third-party grocery delivery services (e.g., Instacart and Shipt) more because of the coronavirus pandemic.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Protective Packaging, Commercial Refrigeration Equipment, Global E-Commerce Packaging, and Global E-Commerce, as well as titles from our sister publisher Packaged Facts, including U.S. Food Market Outlook 2020: Home Cooking, Grocery Shopping, & Food Trends in the Age of Coronavirus; U.S. Beverage Market Outlook 2020: Grocery Shopping & Personal Consumption in the Coronavirus Era; Global Food E-Commerce; and Online Grocery Shopping. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Covid-19      Food & Beverage      Packaging      Services    

Manufacturing Finishes a Bad Year on a Good Note

When the COVID-19 first struck in early 2020, there was an extreme and near immediate negative impact on the global manufacturing sector. Uncertainty on how best to navigate this new reality, and on how long the world would be in the grasp of the pandemic, resulted in the temporary closure of nonessential businesses and a slowdown in general business investment. By April 2020, the PMI – a measure of economic trends in the manufacturing and service industries – reached its lowest point in a decade.

However, the world started to get back on its feet a few months later and steady gains in manufacturing activity through the second half of the year culminated in a December measurement that, in many countries, was the highest mark in years. Through most of 2020, the global manufacturing sector has shown that it was able to withstand many of the disruptions caused by the pandemic, though it was not a smooth journey:

  • The service industry has not recovered to nearly the same extent as manufacturing. Travel in particular – both business and personal – is still struggling, which has continued to hurt airlines, hotels, and restaurants, as well as industries that supply them.
  • Even within the manufacturing sector, the size of the recovery has varied considerably. In December, for instance, the Printing and Nonmetallic Minerals Products industries in the US contracted. Consumer goods producers also registered a weak December as consumer spending slowed.
  • Although it did show a recovery from the sharp drop in manufacturing activity early in 2020, the manufacturing sector in Japan continued to register contractions through nearly all of 2020 before flattening in December.
  • Input prices have risen sharply in some industries as supply chains evolved, production was shut down or limited by physical distancing, and demand changed.

One of the bigger issues early on in the pandemic was the disruption of supply chains as countries enacted different measures to combat the spread of the virus at different times. While there remain sporadic supply chain issues, the US has generally reported that there is stability among inventory levels and that supply chains are satisfying at least short-term demand requirements in many industries.

However, this improvement could still be upset by a resurgence in coronavirus cases if the rollout of the COVID-19 vaccine falters, upsetting normal supply chains and the ability of manufacturing facilities to operate at full capacity. In the second half of 2021, however, many of these challenges to manufacturing could be resolved if much of the world has the chance to be vaccinated and restrictions to movement and operations are lifted.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Global Material Handling Equipment, Global Packaging Machinery, and Global E-Commerce Packaging. Related reports from Freedonia Focus include coverage of various US manufacturing and service industries, such as Fabricated Metal Products, Steel Mill Products, Audio & Video Equipment, and Employment Services. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Automotive & Transport      Construction & Building Products      Consumer Goods      Covid-19      Food & Beverage      Industrial Components      Machinery & Equipment      Packaging    

The Future of Food Delivery – Customer Side: Curb-Side Pickup vs. Delivery

Whether by choice or force of circumstance, the coronavirus pandemic has led many customers to make changes to how they acquire both grocery items and prepared foods. In fact, in the November 2020 Freedonia Group National Online Consumer Survey:

  • 35% of respondents indicated they used curbside pickup for groceries for the first time because of the pandemic, and 37% said that they are using it more often.
  • 30% of respondents said they ordered third-party delivery groceries more often because of the coronavirus pandemic.
  • 43% of respondents said they used restaurant curb-side pickup for the first time because of the pandemic, and 55% said they are using it more often.
  • 32% used third-party food delivery services (such as DoorDash, Grubhub, Uber Eats) for the first time because of the pandemic, and 44% said they are using these services more often.

Although both delivery and curb-side pickup are seeing increased consumer acceptance and use, curb-side is being used by more people.

Curb-side pickup is less costly for stores to do, which means that it’s generally also less expensive for consumers. However, delivery companies are responding by offering subscription plans (monthly or annual) that make using the service more affordable for frequent users. They are also partnering their services with more types of retailers so that orders can include items that you can’t get in a grocery store.

Additional benefits of curb-side pickup include greater control over timing. As more people return to work outside the home and children return to onsite schooling, households that previously tried delivery may find it more difficult to arrange a time to accept delivered grocery when someone is at home. It is often easier to arrange for a curb-side pickup option rather than delivery, given that more slots are often available.

This concern of coordinating deliveries with someone at home to accept them is less of an issue with prepared meals, as delivery tends to be available well into the evening. However, during peak delivery times, it make take significantly longer to receive ordered meals, so pickup might still be a faster option, particularly as more restaurants are bringing food out to customers’ cars rather than asking them to come into the restaurant.

The convenience of curb-side and delivery options means that these services will continue to be available well beyond the pandemic. Expect 2021 to bring about more innovations and improvements in how food gets to consumers, particularly as the pandemic lifts and lifestyles change again.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Global Foodservice, Foodservice Single-Use Products, Global Foodservice Single-Use Products, Retail Bags, and Global E-Commerce Packaging. Related reports from our sister publisher, Packaged Facts, include Food Carryout & Delivery, Food Carryout & Delivery: Special COVID-19 Consumer Insights, Consumer & Corporate Food Gifting in the US, US Food Market Outlook 2020: Home Cooking, Grocery Shopping & Food Trends in the Age of Coronavirus, Global Food E-Commerce, and Online Grocery in the US. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Food & Beverage      Services    

The Future of Food Delivery – Retailer Side: In-House vs. Third-Party

Demand for food delivery – both prepared restaurant meals and supplies from a grocery store – skyrocketed in 2020 due to the coronavirus pandemic. Most restaurants and grocery stores found that contracting with third-party delivery services such as Instacart, Shipt, DoorDash, Grubhub, and Uber Eats was the easiest way to get online ordering and produce delivery quickly. These services allowed outlets to get online fast without having to invest in an ordering platform or to hire and train shopping and delivery personnel.

However, as consumers found online ordering and food delivery or pickup to be convenient and something they will likely continue to do even after the pandemic ends, more companies are beginning to reconsider how they approach this side of the business. As the online food trend has legs beyond the immediate emergency period, companies are thinking that:

  • They’d like to have more control over customer information and the customer experience.
  • There might be better options, as orders that run through third-party service providers are less profitable or not profitable at all due to the fees charged.

Typical options for grocery stores and foodservice outlets have included:

  • developing in-house e-commerce and delivery capabilities
  • continuing to rely on third-party operators exclusively. Smaller outlets – which might have less time or resources to develop their own capabilities – are most likely to do this.
  • developing complementary in-house services such as curb-side pickup while retaining third-party delivery contracts. Many grocery stores and restaurants have invested in curb-side pick up to a greater or lesser degree; customers tend like this option as it is convenient and reduces social contact at a lower cost than home delivery.
  • acquiring a delivery service and bringing the capabilities in-house (e.g., Koninklijke Ahold Delhaize NV’s – a Netherlands-based owner of Food Lion, Giant, and Stop & Shop supermarkets – announced it would acquire a majority stake of grocery delivery company FreshDirect in November 2020)
  • setting up warehouse spaces (dark stores) or separate commercial kitchens (dark kitchens) solely to prepare and fulfill online orders
  • investing in automated or robotic fulfillment or other AI innovations

We expect 2021 to be a year of continued change in food delivery as efforts initially thought to be emergency responses become permanent operations and processes continue to be refined. The incorporation of electronic coupons, special pricing, and digital advertising, as well as and improvements in fulfillment technology and processes and in structural operations will help propel the category.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Global Foodservice, Foodservice Single-Use Products, Global Foodservice Single-Use Products, Retail Bags, and Global E-Commerce Packaging. Related reports from our sister publisher, Packaged Facts, include Food Carryout & Delivery, Food Carryout & Delivery: Special COVID-19 Consumer Insights, Consumer & Corporate Food Gifting in the US, US Food Market Outlook 2020: Home Cooking, Grocery Shopping & Food Trends in the Age of Coronavirus, Global Food E-Commerce, and Online Grocery in the US. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Food & Beverage      Services    

Will the Pandemic Lead to More Veganism? “Veganuary” Campaign Expecting to Have Record Number of Participants in 2021

Many people have discovered that they changed their eating habits during the COVID-19 pandemic. For most people, this was shifting from dining out to cooking at home or at least eating at home with carryout meals.

However, others found that they shifted what they ate as well. For instance, while 59% of respondents to The Freedonia Group National Online Consumer Survey in November 2020 reported eating more comfort foods because of the coronavirus pandemic, 45% reported that they were eating more healthily because of the pandemic. With many people still concerned about the health effects of the COVID-19 virus for themselves or their families, many people sought to eat better to improve their personal health.

Combining these pandemic effects with the growing availability of vegan and otherwise plant-forward food options in stores and restaurants, the promoters of Veganuary – a pledge to eat meat-free for the month of January – expect record participation.  

In fact, there is already a growing community of vegetarian, vegan, and flexitarian consumers. Our August 2020 national online consumer survey indicated that only 3% of respondents identified as vegan, but that number is growing as most people who follow this eating philosophy are new to it. Nearly one-third reported that they started eating vegan in 2000, and 20% started eating vegan in 2019.

Additionally, there is a growing number of people eating more plant-forward diets. In the same August 2020 survey, 5% identified as vegetarian and 36% said they follow a flexitarian diet in that they regularly incorporate vegetarian or vegan meals. These are consumers – an additional 41% of the population – who would be open to eating vegan packaged foods and vegan meals from restaurants or to cooking vegan meals at home.

With the proliferation of meat and dairy analogues – including versions with a taste and texture to please even a devoted meat eater – it is increasingly easy for more consumers to sample plant-forward eating and incorporate more of it into their routine meals.

For more information and discussion of opportunities, see reports from our sister publisher, Packaged Facts, including Vegetarian, Vegan, & Flexitarian Consumers; Meat, Poultry, & Seafood Alternatives: Outlook for Plant-Based & Cell-Cultured Consumer Products; Dairy & Egg Alternatives: Outlook for Plant-Based & Cell-Cultured Consumer Products; Global Meat & Poultry Trends; The Organic & Clean Label Food Shopper; and Home Food Gardening (coming soon).

Related research is also available from The Freedonia Group’s extensive collection of off-the-shelf research, including packaging industry titles such as Molded Pulp Packaging, Stretch & Shrink Film, and Meat, Poultry, & Seafood Packaging as well as coverage in Frozen Food Packaging and Produce Packaging coming soon. The Freedonia Group’s related garden industry coverage includes Home & Garden Pesticides, Lawn & Garden Consumer Insights: The Home Gardener, and updated editions of our benchmark reports -- Lawn & Garden Consumables and Power Lawn & Garden Equipment -- are coming soon.

Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Food & Beverage