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.

Increased Home Outdoor Living Investments & Gardening Activity Expected to Extend into 2021

One of the biggest impacts of the pandemic in 2020 was the increased amount of time people spent in their yards. Not only was there was a huge jump in the number of people exploring home gardening, but they also spruced up their yards by investing in new decks and outdoor living areas. According to The Freedonia Group’s National Online Consumer Survey, which was in the field from mid-November to early December:

  • 39% of respondents indicated that they were spending more time on projects for their home’s outdoor spaces because of the coronavirus pandemic.
  • 26% indicated that they had planted a food garden because of the coronavirus pandemic.
  • Overall, 44% indicated that they maintained a food garden in beds, pots, or containers at home, in community gardens, or a friend or family member’s yard.
  • 26% of respondents purchased power or hand tools to use in their yard or garden.

This focus on outdoor living is expected to rise even higher in 2021. In the same survey by The Freedonia Group, 65% of respondents who were employed full or part time were set up to do at least some of their work from home, and more than half of those respondents were working from home more than they had previously because of the pandemic. In light of many companies amending their work policies to allow more frequent work from home even beyond the pandemic, consumers expect to maintain their outdoor leisure and home nesting activities at elevated levels for the near term at least.

As a result, lawn and garden product suppliers are looking to position themselves to make the most of the opportunity. For example, CRH’s Oldcastle APG unit – a supplier of landscaping and gardening products such as pavers, composite decking, bagged concrete, masonry supplies, mulch, soil, and potting mixes – recently bought CST, a regional producer of bagged mulches and soils in the Midwest.

For more information and a discussion of market opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research related to the lawn and garden industry, including Lawn & Garden Consumer Insights: The Home Gardener, Lawn & Garden Consumables, Lawn & Garden Seeds, Lawn & Garden Fertilizers, Home & Garden Insecticides, Home & Garden Pesticides, Lawn & Garden Mulch, Lawn & Garden Growing Media, Global Power Lawn & Garden Equipment, Lawn & Garden Robots, and Lawn & Garden Watering Products (an update of US Power Lawn & Garden Equipment is coming soon). Our sister published Packaged Facts has also recently released a report titled Home Food Gardening: US Market Trends & Opportunities. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Covid-19      Services    

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    

More Major Companies Establishing a Permanent Work-From-Home Benefit

More major employers in the tech industry and beyond are reconsidering how employees need to operate and how much in-person face time is needed to be successful. For instance, this week, Microsoft announced a plan to allow employees to work remotely less than half their work hours once a return to the office is safe. Employees who want to work from home full-time or from a new location can do so with the approval of their manager (and with a possible adjustment in pay, if moving to a location with lower costs of living).

But what does this mean for the economy?  A lot, really. Here are just a few effects:

  • a realignment of commercial real estate as businesses figure out how much space they really need to operate
  • some migration away from areas with a high cost of living, to the beach location they’ve always dreamed about, closer to family members, or from home to an RV as they travel
  • wider spread existence of home offices, as more people look for housing with dedicated space for a home office or undertake a renovation to make that happen, especially among those using dining rooms and other common areas as temporary workspaces
  • expanded need for high-quality office furniture as remote workers move away from temporary set-ups at the dining room table or with a laptop on the couch
  • more home gardening, home cooking, and related projects, as lunch breaks are increasingly spent tending a garden or getting dinner started
  • less commuting, reducing less wear-and-tear on cars and convincing some families to give up a second car, leading to changes in the light vehicle industry
  • fewer meals eaten away from home, as workhours are spent just steps from the kitchen.

Some of these trends started during 2020, but if work-from-home becomes more widely seen as permanent, more workers will make purchases and lifestyle changes to make that new reality more comfortable and more fulfilling.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research and Packaged Facts’ off-the-shelf research concentrating on food/beverage, pets, financial, and other areas. Freedonia also offers an expanding catalog of COVID-19 Economic Impact reports, which highlight how various industries are responding to the current crisis with a comparison to recent recessions. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Construction & Building Products      Consumer Goods      Covid-19      Services    

Breakrooms in the Pandemic Era & Beyond

From the essential workplaces that remained open throughout the pandemic to offices that are starting to bring back workers, many are realizing that community breakrooms as they used to be no longer fit COVID-related sensitivities and hygiene expectations. Touchless technologies, app-based ordering and payments, and pre-packaged and single-serving beverage and snack options are some of what will equip a breakroom in the pandemic era and beyond.

This has resulted in some unique opportunities for office coffee and snack providers, including:

  • high-end machines that offer touchless technology (from app-based ordering and payments to proximity sensors)
  • provision of specialty coffee beverages to workers who prefer such options but are now hesitant to leave the building as often (via high traffic elevators and lobbies) to make their “Starbucks run”
  • individual, grab-and-go bottles of pre-made coffee, tea, and juice beverages
  • prepackaged meals and snacks, particularly if they either appeal to interests in healthy food that supports immune function or to comfort foods, which have risen in popularity in a high stress era
  • deliveries to remote workers, either as a company-provided benefit or as a personal subscription for convenient access to preferred coffee beverages

For more information and discussion of opportunities, see Packaged Facts’ food- and beverage-related reports, including Office Coffee Service in the US, as well as US Beverage Market Outlook 2020: Grocery Shopping & Personal Consumption in the Coronavirus Era and US Food Market Outlook 2020: Home Cooking, Grocery Shopping & Food Trends in the Age of Coronavirus. The Freedonia Group’s extensive collection of off-the-shelf research provides a strong complement to packaged food industry analysis, including packaging industry titles such as Foodservice Single-Use Products, Global Foodservice Single-Use Products, Pouches, and Global Caps & Closures as well as US Restaurant Reopening: COVID-19 Impact on Supplies.  Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Covid-19      Food & Beverage      Machinery & Equipment      Services