Food And Nonalcoholic Beverage Is The Only Category Expected To Increase Spending This Year

A report from Euromonitor International reveals that the food and nonalcoholic beverage industry may be the only category to show growth this year because of the coronavirus outbreak. The crisis forced restaurants and other businesses to close dine-in options for weeks, which made more consumers cook at home. Although some parts of the country are lifting restrictions, wary consumers still prefer to eat in their own kitchens.

Euromonitor International’s analysis focuses on how the coronavirus outbreak is affecting the economy and specific sectors. In general, it predicts that overall consumer spending will fall along with a decline in disposable income.

“Global consumer expenditure growth is forecast to fall by 4.3% in real terms year-on-year in 2020 (down from 2.4% real growth in 2019). As COVID-19 is set to bring about a global economic recession, total disposable income is set to decline by 3.7% in real terms in 2020 over a year earlier (down from 2.6% real growth in 2019) due to job losses and depressed investment income gains,” Euromonitor International shared.

The food and nonalcoholic beverage sector may be the only one that shows growth in 2020. Euromonitor International predicts that consumer spending in this category will continue to increase because of people’s desire to stockpile food at home.

The report indicates that there may be long-term changes in consumer behavior. The food and beverage industry has already seen shifts, such as customers turning to frozen meals as comfort food and hoarding nonperishable goods. In addition, the growth of e-commerce and food delivery will continue as consumers become used to the convenience and safety of shopping from home.  

“Brands and businesses successfully emerging out of this pandemic will most likely be those which are prepared for the ‘new normal’ of digital consumer engagement, e-commerce, cashless payment and at-home consumption. Additionally, businesses will be expected to put people and their wellbeing before profits,” Euromonitor International shared.

As lockdowns and restrictions lift throughout the country, some consumers are not ready to return to restaurants, bars or other venues. They will continue to cook and eat at home, which will increase spending in the food and nonalcoholic beverage category.