Online sales of food and consumer products grew by more than 15% in 2021, in a global food market growing by 2.1%. Overall growth of 2.1% is in line with the average recorded before the Covid-19 crisis, with a market that maintained the double-digit growth rate recorded in 2020 during the pandemic. Kantar presents the main conclusions.
Once again, e-commerce was the fastest growing distribution channel (15.8%), based on the 45.9% rate recorded in 2020. E-commerce now represents 7.2% of food sales , compared to 6.3% in 2020 and 4.8% in 2019. With a rate of 2.1%, global annual food growth is back in line with the 2% average recorded in the 5 years prior to the pandemic, in part due to the fact that expenses are transferred from outside the home from 2020 were maintained in 2021.
Food sales across all channels in Western Europe were down 0.2% as shopping habits began to normalize with the gradual easing of lockdown periods throughout the year. Latin America saw 9.2% growth in 2021, mainly driven by inflation and ongoing lockdowns, while the US food market grew by 2.7%.
Supermarkets/hypermarkets continue to dominate FMCG sales, but with only 0.1% growth, their share of sales has dropped to 51.4% from 52.4% in 2020 and 53.1% in 2019. Food products purchased on sale accounted for 21.6% of sales in 2021, an increase of +0.7 pts compared to the 20.9% recorded in 2020, but without returning to the pre-pandemic level of 22.1% in 2019 LThe beverage sector was the most dynamic, with growth of 2.9% driven by sports drinks, energy drinks and soft drinks. Food purchases (excluding dairy) increased by 2.5%, while dairy products grew by 2%. Sales of cleaning products fell 1.1%, while the health and beauty sector advanced only 0.7%.
For 2022, Kantar expects growth in the global FMCG market to slow to 1.3% as rising cost of living continues to make the middle basket more expensive: in France, Kantar expects the middle basket to cost about €230 more per year.
An increasing share of e-commerce in the global market
E-commerce now accounts for 7.2% of global food spending. The growth is driven by the Asian market, which now accounts for 45% of total FMCG online sales, nearly double the contribution from the US or Western Europe. Overall, e-commerce platforms retained the new customers gained at the start of the pandemic and continued to grow. Nearly 40% (39.8%) of consumers used online merchant websites to shop in 2021, compared to 37% in 2020 and 31.6% in 2019. They also shop online more often. On average, they shopped online 10.4 times in 2021, compared to 8.7 times in 2020 and 6.9 times in 2019.
44.2% of Asians now buy food online, compared to 41.7% in 2020, a rate that rises to 88.8% in mainland China and 87.1% in South Korea.
In Western Europe, the rate peaks at 35.2%.
“E-commerce remains a big winner, growing three times faster than the second-best performing channel, commented Stéphane Roger, Global Shopper & Retail Director of Kantar’s Worldpanel division. This is explained both by the increase in the number of consumers who buy online, but also by the increase in purchase frequency. Asia is far ahead of all other regions in terms of innovation and the use of e-commerce for purchasing consumer products. Major Western markets have a lot to learn if they want to follow their growth in the e-commerce market. »
Disparate Gaps Between the Big Five FMCG Sectors
All five FMCG sectors experienced slower growth. With beverages, dairy and other foods accounting for more than 70% of the FMCG’s value, it’s no surprise that these three sectors have had the biggest impact, collectively dropping from more than 10% to less than 3% growth.
– Robust growth in sports drinks, energy drinks and soft drinks helped the beverage market grow 2.9%.
– The Wines and Champagne category dropped from 11% growth in 2020 to -4% in 2021.
– Food purchases (excluding dairy) increased by 2.5%, with flour, canned fish and rice being three of the worst performing categories as shoppers reduced their bakery cravings and food needs.
– The home care industry was impacted with key categories such as bleach and household cleaners both showing a slight decline in 2021 compared to the nearly 20% growth recorded in 2020.
– Skin care products grew from -4% in 2020 to +4% growth in 2021. Even the hardest hit categories in 2020, makeup and fragrances (which respectively saw a decline of -22% and -11 %) have seen their performance improve significantly in 2021.
“We can already see that 2022 is a difficult year on many levels. We anticipate growth in the global FMCG market to slow to around 1.3% as consumers turn to various coping strategies to deal with the rising cost of living. To meet this year’s challenges, it will be essential for retailers to innovate in the areas of e-commerce, promotions and product assortment if they are to overcome this year’s challenges.” , predicts Stéphane Roger, Global Shopper & Retail Director of Kantar’s Worldpanel division