US online packaged food and beverage sales could top US$100B in 2021- Food Industry Association

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US – Online sales of packaged food and beverages could hit as much as US$109 billion this year, according to research by the Food Industry Association (FMI) and NielsenIQ.

In the report, FMI and NielsenIQ said that  many consumers will continue buying online this year, and depending on numerous factors, including the vaccine rollout and the economic recovery, online packaged food and beverage sales could range from US$94 billion to US$109 billion.

With the anticipated rise in online sales, FMI and NielsenIQ note that companies now have a US$58 billion opportunity in getting online shoppers to spend as much on food as they do on non-food items.

The firms further revealed that grocery was now the top online CPG category, accounting for 44% of all CPG e-commerce sales over the year-long period ending Nov. 30.

The rise could be partly attributed by the popularity of online purchases during the pandemic that saw more than 20 million consumers begin buying CPG grocery products online.

Instacart, which counted nearly half a million contract shoppers among its ranks during the pandemic’s peak, served as a point of entry for many online grocery shoppers.

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According to FMI and Nielsen, the company raked in US$15.7 billion in online food and beverage dollars in the 12 months ending Nov. 30 — second only to Amazon, which totaled US$17.4 billion over the same period.

Click-and-collect, which grocers raced to expand last year, with some waiving fees to spur interest, was another entry point for shoppers, with orders up 130% while the number of shoppers using the service increased 113%.

Doug Baker, vice president of industry relations with FMI, and Elizabeth Buchanan during a presentation noted that food retailers and CPGs have benefited from out-of-home eating and drinking occasions turning to in-home occasions.

Beverages, wine and coffee categories topped e-commerce dollar growth with shopper spending  US$66 billion on online food and beverages and US$40 billion on restaurant delivery during the analysis period.

With the focus on packaged food and beverage sales specifically, these latest results highlight a fast-changing sector in e-commerce, with ship-to-home marketplaces, direct-to-consumer strategies from manufacturers and automated grocery store models all centered on boxed, bottled and canned goods.

For grocers, the rapid growth also underscores the need to make online fulfillment more profitable.

To that end, companies are making workforce adjustments, renegotiating with third-party providers and investing in new hardware, software and dedicated facilities.

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