Four forces shaping the future of the food sector: Part two

Trends come and go. For each craze that becomes ingrained in the way British consumers eat, there are dozens more that have been lost to time. While short-lived fads can certainly provide value for retailers, when it’s time to get the crystal ball out to gaze at where the sector is headed in the next decade, they tend to fall flat.

To understand where the food and drink sector is headed, we need to look at the deeper movements underpinning these passing trends. By understanding these, independent retailers can get ahead of the curve and be at the cutting edge of the industry.

Last week, we identified climate change and disruption from new industries as key driving forces in the future of food. Here are two more to sink your teeth into:

3. Health regulations
The food sector not only has to adapt to changes in consumer preferences and evolving technologies, but it must also keep up to speed with new regulations from the government.

Restrictions on retail placements of foods high in fat, salt and sugar (HFSS) came into force in October 2022, and a ban on multi-buy offers including buy one get one free and three for two offers, is set to take effect in October 2023. Meanwhile, the junk food watershed – a ban on advertising HFSS food before 9pm on television and online – will now come into effect in 2025.

Originally, the price restrictions and TV advert bans were set to come into force earlier, but the introduction has been delayed due to the cost-of-living crisis. Delayed or not, the rules have already led more businesses to invest in reformulating their products.

Food and drink from members of the Food & Drink Federation (FDF) now contribute 13 percent fewer calories, 15 percent fewer sugars and 24 percent less salt to the average shopping basket than they did eight years ago, according to analysis by the FDF.

“These latest figures show the fantastic achievements the UK food and drink industry continues to deliver,” says Kate Halliwell, the FDF’s chief scientific officer. However, the research showed that small and medium-sized businesses in the UK are having more difficulty reformulating HFSS products, with larger companies managing to achieve improvements that are four times that of smaller companies.

“This data demonstrates that more support is needed to help smaller businesses match the innovation and output of the larger companies. With 97% of the food and drink industry made up of small to medium-sized companies, these companies can play an important role in providing healthier options but many do not have the resources, or technical expertise, to reformulate their products.”

With health in the sight lines of the government, companies and the public, there is no doubt the shift towards healthy food and drink products will continue to be a huge force of change in the coming years. Of the 10 trends Kantar’s report identified for 2023, half related to consumer health.

But while health is important, shoppers don’t want to sacrifice flavour. “The quest to find something that is ‘better for me’ while satisfying the sweet tooth continues,” the report says. “It’s about satisfying cravings by mimicking feel good foods through healthy, plant-based ingredients or through the creation of new recipes that continually engage.” Brands that do this successfully will be the ones to watch.

4. Lessons from Covid-19
While many of us would like to put the challenges of the past few years behind us, what we learned about our food systems during the pandemic years can’t be brushed under the carpet. The Covid-19 pandemic showed us how fragile global supply chains are, and that to ensure resilience in our food systems, we need to shift from global to local.

“In a 2020 EIT Food study, 35% of European consumers said buying locally produced food was more important to them during the Covid-19 pandemic, and, within this group, 87% also said this will very likely continue to be the case in the future,” Jayne Brookman, EIT Food’s chief partnership officer, says.

Food shortages seen during the pandemic, as well as supply problems caused by everything from adverse weather conditions to Brexit to poor economic conditions, underlined the importance of creating a resilient food system. According to Global Food Security, the UK imports 48 percent of the total food consumed, and this is rising.

The farming industry has spoken about the importance of creating a ‘farm to fork’ supply chain to build a more sustainable and resilient food system. However, the recent Farm to Fork Summit held by prime minister Rishi Sunak drew criticism from many corners of the sector, including charities and sustainable farming organisations.

While the question of food security needs a joined-up approach, according to Jayne, there are technological solutions to boost local, circular food systems in the UK, too.

“This includes controlled environments agriculture (CEA) methods. Whether in urban or rural areas, CEA enables people to grow food on land in a more diverse range of locations, providing the opportunity for producers to locate their production closer to consumers,” she says.

“This includes production methods such as in-land aquaculture systems, greenhouses, and vertical farms.” While a holistic solution may seem a long way off, we can expect to see more steps in this direction over the coming years.

Amid current challenges like the cost of living crisis, it can be difficult to see the wood for the trees, but another lesson to take away from the Covid-19 pandemic is the way the sector rallied together during a difficult time to make the impossible happen.

From building a resilient food system to adopting innovative technologies, these industry-wide movements will be most successful when the sector bands together.

As Jayne says, “We must continue to work together, share ideas, and innovate to ensure food is not only healthy and sustainable, but also affordable and accessible for everyone.”