The food and beverage industry is easily the oldest on the planet and has gone through several stages of evolution. Wholesalers and retailers in this industry have also been forced to evolve. Consumers, on the other hand, remain demanding and insatiable, and the only thing businesses can do to maintain their market position is to keep up with the changes and current trends in the industry.
This article provides an overview of the food and beverage industry. It gives existing and potential sellers information about consumption and demand patterns in the food and beverage market. You’ll also learn the top 15 food and beverage trends for 2022 and the market's prospects on a global scale.
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The food and beverage industry consists of all companies and businesses that are involved in transforming raw agricultural products into consumable food products. It also includes alcoholic and non-alcoholic beverages and drinks, as well as tobacco.
On one end of the food and beverage industry, we have big processing farms and huge rice mills. On the other hand, we have restaurants, grocery stores, and farmer’s markets. All of these make up the billion-dollar industry.
According to Market Research, a leading provider of industry intelligence, the global food and beverage market is worth well over $5.8 trillion.1 Statistica also recorded that the market size of the food and beverage industry grew by over 500 billion since the previous year.2 The 2022 FCC Food Industry Report revealed that the food and beverage industry continues to grow amid pressures from inflation. Further research showed that the food and beverage industry is set to reach $6.4 trillion by the end of 2022.3
7 million+ people consume some form of food or beverage every single day. New opportunities also open up daily in the food and beverage industry as the consumer market increases. These opportunities are mostly influenced by consumer behavior and consumption patterns.
The COVID-19 pandemic, on the other hand, changed the food and beverage business by encouraging consumer packaged goods. The opportunities in modern eCommerce also increased as a result, as they had to cater for the direct-to-consumer food and beverage market. The processing and marketing industries were also impacted by these social and economic shifts, which increased the responsibility of food delivery services.
Global management consulting firm McKinsey also confirmed this in a recent publication. They opined that marketing dynamics and related trends have created an opportunity for packaging and in-home food delivery businesses.4 A similar report by The Business Research Company (TBRC) noted an increased opportunity in organic food and beverage markets as health concerns of consumers are driving the trend.5
These concerns have driven up the demand for nutraceuticals and personalized nutrition. Status Insights also noted that consumers are shifting to alternative sources of protein, such as lab-grown food. In addition to these, there is still a demand for storage and preservation techniques.
Companies are keen to observe how consumer behavior and patterns affect the food and beverage industry over time, and we know how difficult it can be to keep up. To help, the next section lists the top food and beverage trends for the year.
Businesses in the food and beverage industry cater to consumers whose wants are insatiable and ever-changing. Businesses have to take measures to ensure that they are versatile enough to keep up with the trends in the industry.
Here are the top 15 food and beverage trends for 2022:
Consumer packaged goods (CPG) are low-cost and fast-moving consumer goods. The bulk of the food and beverages sector falls under this group. Consumer packaged goods are usually packaged with consumers in mind, and this is what appeals to them the most.
Currently, the market for organic and whole foods is booming, due to greater consciousness about sustainability and healthy living. The COVID-10 pandemic has also influenced consumers to make healthier decisions about the food and beverages they consume.
Inflationary pressures have done everything but reduce the demand for confectionery, sweets, and snacks, now dubbed "comfort food." Many people feel the need to give themselves a special treat as a result of the increased stress. While they walk down the aisle looking for some sort of dairy, meat, or protein, they can’t help but also pick up ice cream.
Vegan desserts also appeal to consumers with dietary concerns such as lactose intolerance and high cholesterol. The trend is focused on consuming clean, safe, and natural ingredients. The market for vegan and plant-based foods is currently valued at $2.68 billion.6
There is also increased pressure and influence from DIY (do it yourself) supporters and social media influencers. This, accompanied by interesting innovations in the food and beverage industries, creates a new market for household food processing machines that are cost-friendly and easy to use.
The increase in industrialization and longer working hours has led to more interest in instant foods and noodles that can easily be cooked in the microwave. However, the convenience, taste, nutrition, and price of instant food also contribute to its popularity amongst consumers. Consumers believe that they get as many nutrients as they need from instant food like noodles and burgers.
Healthy living decisions have also influenced the market for food spices and herbs, with Asian and African countries being the main benefactors of this trend. Spices that have immune system benefits like ginger, garlic, and turmeric have recorded immense demand. Business insights project that the food, spices, and herbs market could grow to about US $25.42 billion by 2029.7
The nutrient supplement market was valued at over $150 billion in 2021 and is expected to grow at a rate of 8.9%.8 This trend is driven by increased wellness and personal health awareness. Consumers take these supplements to cover their nutrient deficits from an unhealthy diet owing to hectic work schedules and busy lifestyles.
Dietary guidelines and social media attention contribute heavily to the increasing demand for whole grains. Consumers and food and beverage manufacturers alike are opting for whole grains in their products, both in their original form and in their grounded form, and this trend has no end in sight.
This trend was majorly influenced by urbanization and the increase in obesity and chronic diseases. This segment of the food and beverage industry is growing and, according to Maximize Market Research, the total low-calorie food revenue is expected to reach $18.54 billion by 2029.9
Storage and preservation have always been challenges in the food and beverage industry. Thus, innovative entrepreneurs create newer and more effective food storage and packaging solutions, especially for household consumers who now prefer to buy fresh food as opposed to processed food.
Beverages are a part of our lives, but recent years have seen consumers switch from coffee to healthier green tea so much that it has become a trend. The preference is fueled by the need to maintain healthier mental health and aura.
Flexible and mobile production lines are becoming popular in the food and beverage industries. Another factor contributing to this trend is the growing demand for agility, which indicates vertical disintegration in food processing facilities.
Drugs that boost happiness and do not have a visibly adverse effect are trending as consumers are moving towards a healthier lifestyle. These drugs are a second option for those who do not want to deal with the calories that come with "comfort food".
Environmental sustainability drives are encouraging eco-friendly lifestyles and consumers only want to associate with brands that are also eco-friendly. The sustainable packaging market is increasing alongside the food and beverage industry. A study by Zion Market Research reveals that the sustainable packaging market will be worth over $350 billion by 2028.10
It is worth noting that the bulk of these food trends is influenced by gut health and physical health concerns and the consumer's need to maintain a healthy lifestyle. eCommerce also plays a role in these trends as they cater to consumers' need for convenience and ready-to-eat food and beverages. In essence, convenience and health are the major drivers of these food and beverage trends.
The current trends are likely to change along with consumer demand in the coming years, as with previous years. The secret to building a profitable food and beverage business is understanding the food and beverage market and remaining abreast of these changes.
Here are a few steps to starting a profitable food and beverage business.
Learn everything you can about your target market, including what it wants and needs. This would also assist you in creating a reliable business plan. Information is a powerful tool that can be quite useful in the early phases of any organization. Find out as much as you can about your target market's demography, current trends, and business competitors. All these can take some time to complete, but they would help your company outlast its competitors.
Don't be put off by the prospect of needing capital to establish your food and beverage business. You can start small and scale up as your business expands. Capital does not always have to be a sizable chunk of money. One benefit of starting small is that you may take more chances as an entrepreneur without suffering significant losses. Additionally, it offers you the chance to make errors on your own and fix them while learning.
There aren't many possibilities for product differentiation in the food and beverage industry because the majority of companies provide comparable goods. However, you can still benefit from intrinsic value. Focus on telling a story through your products, and sell the intrinsic value of your product.
Make your unique selling proposition the focal point of all your branding efforts by identifying it and emphasizing it. One can sell "comfort food" instead of "confectionery and sweets" - identical goods, different branding. Effective and captivating brand storytelling piques consumer interest and develops trust.
A product’s packaging is the cherry on top as a poor packaging design can ruin a good product's appeal. Packaging includes more than just the wrap you use to pack food and drinks. The packaging's shape and color are equally as significant as they influence customer experiences. Your product's packaging should be able to form a connection with customers on both a psychological and physical level.
Starting a business can be quite challenging, but it always helps to keep an open mind. You will achieve more success if you develop the will to try again every time you fail. Be ready to try out a new strategy - be equipped to handle changes in consumer patterns.
There is no one-size-fits-all guide to managing a successful and profitable food and beverage business, but the few ideas outlined here will undoubtedly give you a head start.
Alibaba.com, the world’s leading B2B eCommerce marketplace offers tons of opportunities for businesses in the food and beverage industry. The platform provides an avenue for direct-to-consumer food and beverage brands to compete in new markets and reach a global audience.
Alibaba.com receives millions of visitors monthly, connecting buyers and sellers from 200+ countries and regions. The platform offers sellers direct access to over 40 million global B2B buyers who are actively sourcing products and placing wholesale orders.
Alibaba.com also offers amazing features that ease business for sellers on the platform. These features range from a simple no-code storefront to a trade assurance policy that already caters to 2 million+ suppliers. The platform also offers top-notch security - with vetted buyers and sellers, and a responsive customer support team.
Conquer the food and beverage market through eCommerce - open a seller account on Alibaba.com.