Online food sales will reach 6% of total grocery sales in 2021

According to the forecast issued by Rabobank, driven by the consumption habits of consumers not going out during the coronavirus pandemic, online food sales are expected to reach 6.4% by 2021.

Survey data shows that as of the end of 2019, online food sales accounted for 3.1% of total grocery sales. By the end of 2021, online food sales may account for between 4.8% and 9.1% of total food sales, but it depends on several factors.

The company said that the forecast model suggests that there may be broad outcomes. Among them, the long-term impact of the pandemic on online food sales in the United States will be mild and may directly reflect the 12-18 months. The report shows that the penetration rate of online sales has increased compared to when a pandemic has never occurred.

Even though the growth during the COVID-19 period is short-lived, the company believes that the recent increase in e-commerce attention and investment is not unreasonable. Although there are exceptions, many food and beverage companies have suspended e-commerce investments for too long and there is little risk of over-adjustment.

More first-time users, frequent use, and the duration of the epidemic may increase the penetration rate of online sales. The poor user experience, limited capacity, and new user statistics may reduce penetration.

Rabobank stated that allowing consumers to create a login and complete their first order is the biggest obstacle to developing an online food business. In the early days of the pandemic, a poor user experience began to appear as food vendors scrambled to increase their ability to provide online shopping. According to data from Rabobank citing Gallup, the proportion of people who used roadside pick-ups at stores increased from 19% from March 23 to April 5 to 36% from May 11 to 17. During the period from May 11th to 17th, the proportion of people receiving food delivery rose from 11% from March 23 to April 5 to 14%.

In addition, a survey conducted by the American Food Industry Association FMI stated that baby boomers are least likely to insist on buying food online. The survey showed that when asked how their online shopping will change after the pandemic is over, 10% of baby boomers said they would buy more food online. This compares to 35% for Generation X, 40% for Millennials, and 34% for Generation Z.

In other words, the report shows that elderly consumers are actually reluctant to choose online shopping, because they started to order online because of the pandemic. Therefore, there is a possibility that once the crisis is over, it will be difficult for this group of people to stay online.