Impact of the Top Four Key Food Themes on Australia

Evolution of health-conscious eating

Health-conscious eating is a trend that has become more prevalent in Australia in the last decade. The pandemic fears exacerbated this. The Australian consumer has become more conscious of what they put into their bodies. This is driving the demand for functional food, reduced sugar/calorie alternatives, and natural products that contain “no nasty” ingredients.

Transparent labelling and clear communication are key in driving value to consumers as ingredient lists and labels become more complex. According to Euromonitor International’s Voice of the Consumer Survey: Health and Nutrition 2023, 17% of Australians prefer a short list of ingredients. However, there is a paradox, as consumers are looking for sensorial and indulgent food experiences. Snackboy, a plant-based food manufacturer, has introduced ice creams and snacks that are healthy yet decadent.

Rethinking the food supply chain

The food industry will look more and more to localize supply chains and build resilience to both prepare for future shocks and to support sustainability efforts. In Australia, the localism trend has grown stronger as crises like bushfires, floods, and pandemics have prompted a desire to help local businesses and communities. Consumers are becoming more interested in the provenance and sourcing of food and nutrition.

When asked about sustainability claims, respondents prefer products that are locally sourced or made.

Some companies have differentiated themselves by using QR codes that allow consumers to track ingredients, harvest dates, and the source of the ingredients. This makes it easier for them to build trust with their customers by providing detailed information about traceability. Melons Australia is a recent example of a company that uses QR codes to track products from their supplier to the store.

The evolution of snacking and eating occasions

The shift to hybrid lifestyles and a focus on the home after the pandemic has transformed Australia’s eating and snacking occasions. The need to snack more often throughout the day is increasing, and consumers are looking for treats that fit within their budgets and portions. Euromonitor International’s Voice of the Consumer Lifestyles Survey (fielded February 2023) found that 52% of Australians eat snacks most often at home. This high number shows the stickiness of habits developed during the pandemic.

This trend also increases the number of home meals eaten, increasing the need for convenience. However, consumers also want to enhance their culinary experience at home. So, restaurants are increasingly offering signature products and sauces.

The habits of ordering food on the go and strengthening digital and delivery infrastructures to support remote consumption persist.

In 2019, 68% (of Australia’s consumer foodservice sales) were eaten in. This will decline to 45% by 2020 and then recover to 60% by 2025.

The improvement in consumer foodservice sales, despite the fact that they are expected to remain below their pre-pandemic level by 2025, shows that Australians want to go out more. This desire may increase if the cost of living pressures lessen. The demand for take-out food is also falling. Deliveroo’s exit from the Australian market at the end of 2022 was a high-profile example of this trend.

Food affordability and premiumization

Cost-of-living concerns continue to push Australian consumers to make savings despite signs that inflation is falling. Private label products are more popular, and people shop at Aldi, which is less expensive. This allows them to afford smaller luxuries (the “lipstick” effect) or save money for a long-awaited vacation.

The response from manufacturers and retailers has been varied. Vittoria, a premium Australian coffee brand, entered the instant coffee market for the first to expand its consumer base. Coles, a retailer in Australia, has increased its private-label product range to include ready-meal solutions as well as a range of nutritious snacks that are low in sugar. Coles Joyful offers a range of healthy snacks and luxuries, including Muesli Bars and Protein Bars.

Future of food in Australia

The cost of living is expected to remain high in Australia for the foreseeable future. Consumers’ habits will reflect this, and both manufacturers and retailers are challenged with developing interesting yet affordable products.

Over 30% of Australians plan to visit discount stores more often in 2023. This is a nine-percentage-point increase from 2022.

In addition to the plans of Australians to visit discounters more often, 42% expect to spend more on groceries in 2020, compared with 25% in 2022. Price will remain a major factor in Australians’ purchasing decisions, as shown by this study. Manufacturers and retailers must be innovative and affordable in order to win customer loyalty.

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