The first half of 2021 was a time when Covid-19 lockdowns changed consumer behaviours, while the second half, thanks to COP26, saw a spotlight on supply chains and sustainability. These challenges continue to pose opportunities for all levels of the food supply chain to demonstrate where they are supporting evolving consumer needs and building trust.

In the home food market, consumption remains elevated compared with pre-pandemic levels, as the recovery of the out-of-home market stalled with the recent rise in coronavirus cases. This has positively affected food grocery sales, while the food-service market in the past year was still 25% smaller in value than it was in 2019, according to leading data, insights and consulting company Kantar. 

What will happen in 2022 remains unknown, but there are some trends we can expect to see continue. 

The economic effects of the pandemic will be felt for many years. GDP remains smaller, unemployment rates remain higher and the hospitality industry is shrinking as the market deals with widespread closures. It also faces operational challenges including labour shortages, disruption to supply and rising costs. 

Consumer confidence is low and financial situations have changed. According to the AHDB/YouGov consumer tracker, one in three (33%) consumers say their household finances have been negatively impacted by the pandemic – but 13% claim they have been positively impacted. With such polarised spending ability, we will see a mix of recessionary consumer behaviour and discretionary uplift in food consumption. Value for money, whether price or quality led, will be key for retail and food service.

Some Covid-19 legacy behaviours are expected to continue. A third of consumers will work from home at least some of the week, according to AHDB/YouGov data. This results in more in-home meal occasions, particularly breakfast and lunch, which might otherwise have been eaten in the office.

Retail channels need to offer inspiration for these additional occasions, while food service must consider new trending channels for takeaways, deliveries and food to go. Not only have consumers learned to adapt to this style of working but many also enjoy entertaining and indulging in treats more often at home now. With 38% of consumers claiming they are going to eat out less often than they used to, the food-service industry must focus on experience and innovative menu choices.

Pre-pandemic industry concerns will return. Naturally, media coverage has focused on coronavirus over the past couple of years, meaning less negative coverage on foods such as red meat and dairy, and production systems. However, as life returns to normality, topics that were increasing in importance pre-pandemic will come back into focus.

AHDB has been tracking consumer trust in British agriculture among consumers since 2019 and the latest results show that consumer perceptions remain positive. 

Almost two thirds (63%) feel very or somewhat positive towards UK agriculture. Farmers remain by far the most trusted group in the supply chain, with 70% of consumers trusting them compared with 53% for retailers, the next most positive group. Consumers value farmers over other parts of the supply chain for their expertise, and for caring about the environment and animal welfare. It is therefore vital that retail and food-service establishments invest in and support British agriculture by demonstrating where the supply chain is doing the right thing and showing its shared values with consumers. 

Value for money, taste and enjoyment are the key motivators for consumers’ meal choices, but below the surface purchase decisions are also influenced by sustainability, provenance, animal welfare and health.

Climate change and the environmental impact of food production is understandably a growing area of interest among consumers. This topic has received greater media exposure over the past couple of years, rightly or wrongly referencing farming and food production practices as contributing to the climate emergency. On balance, most consumers believe farmers care about the planet, with 65% in agreement. But there are strong examples of farming initiatives to tackle climate change and benefit the environment that could do with being better communicated to consumers directly and credibly in order for them to make an informed choice. 

The desire from consumers to lead healthy lives is evident. Seven in 10 consumers claim to try to lead a healthy lifestyle, according to Kantar. Consumer perceptions towards how healthy a food product is varies. The majority consider meat and dairy to be an important part of a healthy diet, but they have become less healthy in consumers’ eyes over time. For any food product it is therefore vital to communicate the relevant health benefits, and it is often those products that can hit multiple needs – including taste and enjoyment – that prove most attractive to consumers.

This article was produced by our partner specialists at AHDB. For more information on how consumer demand and behaviour is evolving, as well as more in-depth thinking on the topics covered here, please visit AHDB’s Retail and Consumer Insight.