Innovation set to boost food and drink on-the-go market

While the grocery market as a whole continues to navigate its course through choppy waters, the on-the-go market has enjoyed solid growth. The sector has benefited from a period of unprecedented innovation in product, packaging, and store concepts, helping attract new shoppers to the market and lifting average spend.

We are positive in our outlook for the on-the-go market in 2017 and expect it will outperform the wider food and grocery market this year and beyond – over the next five years.

In part this outperformance is being driven by an ongoing macro demographic shift. Shoppers aged under 35 (so-called generation Y) are characterised by their need for convenient solutions and newness. They have a substantially higher propensity to shop on-the-go, buy a wider repertoire of food and drink, and they have higher expectations to meet. The importance of this shopper base continues to grow and it is this group that is most demanding of innovations.

But it’s not only about younger shoppers. More broadly people are becoming more demanding and retailers and brands have considerable scope to fulfil that demand and drive additional value.

Health remains the catalyst for NPD and that is likely to set the agenda in 2017. Brands and retailers that are able to help shoppers effectively manage the balance between indulgence and health are well set to be winners. We also still see considerable room for improvement in merchandising. For example, consider how useful is it to segment a fixture by sandwiches and drinks, when the shoppers’ decision making process often starts with ‘I want something healthy’ or ‘I need a treat’. Retailers could probably learn from on-the-go specialists, like Gregg’s which segments healthier options at the fixture and uses screens in new and refurbished stores to highlight products and offers, as well as the many independents and small chains across the country that are driving change in the market. We know of a number of retailers that are reviewing their on-the-go merchandising and ranges in 2017, with health a central consideration.

 

35% of shoppers say high protein claims influence their purchase decision

 

The on-the-go market is innovative and dynamic, and is often the birthplace for new trends and concepts. And we expect the pace of innovation and change will accelerate in 2017 as more businesses try to capitalise on market growth. Brands and retailers should actively follow developments in on-the-go, not only because it is a rare part of the food and drink market that is growing, but because it is a source of insights that can be translated into other areas and it has potential to be used as a test bed for new ideas.

 

If you are interested in reading the full findings from Savvy’s on-the-go insight project, including analysis of a survey of 1,000 UK shoppers, please contact Taj Sur on taj.sur@getsavvy.com.