COVID-19 has changed the way people buy and consume food and agricultural products. Consumers are increasingly looking for food with health benefits. There has also been a substantial increase in online food buying. Demand for premium food, usually consumed in restaurants, has fallen. Meanwhile, takeaway food consumption has increased.
Parts of the world are now moving from acute pandemic responses to ongoing disease management. These trends are expected to have lasting implications for Australian agricultural exports to Asia.
These consumer food trends are likely to affect trade.
In April 2020, consumers in Asia-Pacific countries reported a 16 to 70% increase in online spending on food (Source: McKinsey 2020, Reimagining food retail in Asia after COVID-19). Markets and food retail stores are reopening in many countries. However, there is evidence that online food purchases will remain at elevated levels.
Exporters that can reach consumers online, either directly or through local online retailers, will be best placed to benefit from the rise of e-commerce.
Figure 1: E-commerce retail index, 2019 to 2025
COVID-19 has amplified consumer preferences for foods with health, freshness and sustainability credentials. With COVID-19 still affecting many countries, this trend is likely to continue over the coming years.
Australian exporters are well placed to leverage and enhance Australia’s reputation for high-quality, clean and sustainably made food products.
COVID-19 restricted physical movement and the availability of goods (particularly fresh produce). This, and changing preferences, led consumers to try new brands.
Disruption to regular brand preferences presents opportunities to gain market share and reach new consumers. It also emphasises the importance of ongoing engagement with current customers to maintain their loyalty.
COVID-19 closed restaurants around the world. Consumers turned to takeaway food, meal kits and home cooking. Persistent outbreaks have prevented venues returning to full capacity. In some countries, consumers may continue to eat at home to reduce their risk of infection.
Restaurant closures and reduced tourism are an ongoing challenge for premium food exporters. Exporters should consider partnering with local premium food distributors and meal-kit providers. They can also redirect food into the retail sector. Food sold in the retail sector often needs different packaging and may attract lower prices compared to the hospitality sector.
Exporters experiencing difficulties accessing international airfreight may be eligible for assistance through the International Freight Assistance Mechanism program.
This article is based on publicly available resources (cited inline) and information provided by the Australian Government’s network of Agriculture Counsellors. More information about the Agriculture Counsellor network, including contact details, are available on the Department of Agriculture, Water and the Environment website.