Will online food and beverage sales be even bigger than imagined? | RetailWire

By January 29, 2020Food trends
Laura McCullough, EVP Client Success, Nielsen, at FMI Midwinter – Photo: James Tenser

Few would deny that online grocery sales are gaining momentum, even as the debate still rages with regard to how far and how fast they will grow. A soon-to-be-released study from FMI and Nielsen previewed at the FMI Midwinter conference in Phoenix ups the forecast in a major way.

By 2025, said Laura McCullough, EVP client success for Nielsen, online food and beverage sales will top $143 billion in the U.S. That’s an increase of $40 billion over the widely-cited prediction of $103 billion in the “Digitally Engaged Food Shopper” study released two years ago with FMI.

“Click and collect and delivery are now almost table stakes,” said Ms. McCullough, who elaborated in her presentation that the previous report did not fully anticipate the rate of investment by both food retailers and restaurant delivery services. That, along with evidence of adoption by consumers in both sub-channels, led to a widened definition in the present study.

No doubt the forecast jump may be partly attributable to this change in methodology.

Considering how dynamic the omni-shopping trend has become, however, there appear to be other significant forces driving the surge in digital food and beverage sales.

In 2019, 54 million households purchased food and beverages online in the U.S., a 14 percent increase versus two years earlier. Those households account for some $400 million in spending power. The percentage of households that bought food and beverages online grew from 39 percent in 2017 to 44 percent in 2019.

Consumers who shop in-store and online spend an average of $1,000 more than store-only shoppers, Ms. McCullough said. This offers a new definition of “most valuable shoppers” with the potential to influence loyalty and promotion strategies in the years ahead.

Another unexpected finding is that sector growth is being driven mostly by boomers, seniors and high-income families — not so much by Millennials — despite popular belief. The ability to afford and willingness to pay for convenience emerge as strong factors here.

At present, the online share of food and beverage sales is still averaging in the single digits, but that varies greatly by locale, from a high of 12 percent in New York City to five percent in San Francisco and two percent in Des Moines.

Regardless of which consumer segments or geographies lead the charge, Ms. McCullough anticipates that omni-shopper households will be “dominant” by 2025, wielding $630 billion in spending influence.

Source: Will online food and beverage sales be even bigger than imagined? – RetailWire