From Easy To Eat To Sustainability: Customers Want Much More From Packaged Foods

Today’s fast-paced lifestyles allow little time for people to make food at home everyday. Cut-throat competition at work, childcare, commute to workplaces create major constraints for people and they turn toward packaged foods.

Packaged foods or convenience foods are prepared to save the time of consumers in food procurement, preparation, and clean-up afterward. They are restaurant meals and ready-to-eat food from grocery stores that include a variety of food ranging from frozen pizza to bananas that need little or no time of preparation. The advent of packaged foods offers an easy solution for those who are not familiar with culinary practices. However, these foods tend to have lower nutritional value than home-cooked meals and they can be a bit expensive.

According to Allied Market Research, the global packaged food market is expected to reach $3,407.2 billion by 2030, growing at a CAGR of 5.2% from 2021 to 2030. Rise in the growth of the food & beverage industry and retail market and increase in affinity of consumers toward convenience have boosted the growth of the market. In this article, we will discuss why the popularity of packaged food has increased and what are the major driving factors behind the growth of packaged food industry.

Types, formats, and packaging solutions of packaged foods:

• Food-to-go:

These food products can be eaten on the go and demand no major effort and preparation. These types of packaged foods come in stand-up pouches with caps and easy-open pouches. Over the last couple of years, new forms of packaging solutions hit the market that is suitable for rigid or semi-liquid food products. Materials such as APET PE are now widely used for bowls with lids for such packaged foods.

• Food kits:

Food kits gained popularity as they are the perfect alternative to ready-to-eat meals and take-aways. These kits include the exact ingredients that are needed to prepare the food and come with a clear, simple set of instructions to ensure simple preparation. This way, consumers can cook their meals that taste just like restaurants and make little adjustments according to their taste without taking the additional time required for cutting vegetables and cleaning the kitchen afterward.

• Packaged food in microwave-friendly packaging:

While people opt for ready-to-eat packaged foods, the affinity toward hot meals remains among the consumers. Thus, packaged food companies offer microwave-friendly packaging that allows consumers to heat their food without opening the lid or pouch. These types of packaged foods comply with the original objective of reducing time and efforts of cooling and allowing consumers an opportunity to heat their food before eating.

Why do people opt for packaged foods?

One of the prime reasons behind the popularity of packaged foods is the time restraints created due to employment. People simply do not have enough time for grocery shopping, preparing the food, and doing the cleanup afterward. That’s why people are slowly shifting from grocery store foods to restaurant meals. This shift is strongly observed in a family where all the adults are full-time employed. According to a survey, employed adults consume 12% less ready-to-eat food from the grocery store and 72% more from full-service restaurants.

Another reason for this shift is having toddlers in the house. Parents tend to select foods that they believe their child will eat and their day is spent taking care of them, offering less to no time for preparing food. Moreover, the rise in the inclination of children to consume fast-food meals has already increased the consumption of packaged food. Furthermore, a single parent who has no help from a partner to raise a child tends to use packaged food and ready-to-eat foods. On the contrary, parents purchase more food from grocery stores and opt less for packaged food if the number of children in the house is more.

Apart from domestic reasons, there are some financial aspects are in play as well. The households with a strong financial foundation are observed to use packaged food more as the food items are more expensive than those brought from grocery stores. It is not a surprise that the houses with a high-income shift from ready-to-eat food to fast-food and full-service restaurant meals. In the U.S., the Supplemental Nutrition Assistance Program (SNAP)S offers participants with funds to buy food from grocery stores, and this way, the demand for packaged food increases significantly.

Consumers’ will and decisions to purchase packaged food depends on the type of packaged food, time constraints, affordability, and financial resources of consumers. By understanding demographics and target audience, the market players in the packaged food industry can offer discounts and coupons to increase their sales. Moreover, the concerns regarding the lower nutritional value of packaged food and the rise in awareness regarding health and wellness can create challenges.

Packaged foods are mothers’ best helpers

Over the last few years, the number of mothers with children of 18 or younger that are in the workforce has increased significantly. The majority part of the workforce feels the burden of cooking and planning family meals, including breakfast, school lunches, and dinners. From the time children start eating solid food, giving something to snack is a tiresome job for mothers.

This burden of putting food on the table and the demanding nature of the job created a perfect storm for packaged food companies. Several companies launched packaged food that is the perfect solution for school lunches, solving mothers’ problems and giving children a special treat simultaneously.

In the beginning, the nutritional makeup of packaged food was a concern for mothers, but despite it, the demand for packaged food that offers organic fruits to pizza has increased. The product lines such as pre-made wraps, kid’s lunches, and sandwiches are the most-sought out packaged foods there are. Thus, baby food pouches have gained traction over the years. Since the emergence of flexible packaging for packaged foods, the demand for baby food products has skyrocketed as there is nothing as convenient as a pouch that you can take the top off and give it to the kid and let the kid feed himself.

The concerns about nutritional levels of packaged foods are still a challenge but packaged foods that have food items such as sweet potatoes, grains such as quinoa made parents more comfortable about buying packaged foods for their kids. Some parents look for clean labels and superfood ingredients in packaged food. The emergence of such products is truly a boon for baby food manufacturers.

Growth of packaged food market in European countries:

The European packaged food industry is booming for the last few years. Convenience food has played a vital role in shaping today’s food consumption trends and the emergence of ready-to-eat meals, breakfast bars, and prepared chilled foods has changed the dynamics of the market. The fast-paced lifestyle in Europe swiftly moved toward new ways to make the best use of their limited time. The packaged foods that need only a couple of minutes gained popularity. Moreover, these packaged food items have a longer shelf life, unlike groceries that can last only 2-3 days.

In Europe, the 24-hour stores that cater to the tastes of consumers in their catchment areas have gained popularity. They have appeared in Spain and slowly gaining traction across other European regions. Moreover, some companies offer packaged foods in attractive packaging that is easy to use and open while it offers ease in transportation. This has completely revolutionized the food industry.

The advent of flexible packaging has increased the consumption of packaged foods more than ever. Flexible packaging technology has dramatically increased over the last few years. The packaging solution was introduced to protect, promote, and preserve foods products. However, it has quickly gained importance in the convenience food industry due to its eco-friendly aspects and its lightweight. Flexible packaging has gained great importance in beverage cans and bottles due to global pressure to adopt eco-friendly packaging methods and lower the cost of packaging.

Major factors that fuel the growth of packaged food industry:

• The advent of premium packaged foods

Today’s consumers demand food products that are customizable, nutritious, and all-natural and they refuse to compromise their health goals. Moreover, the awareness regarding the health and importance of a healthy diet to maintain pace in busy lifestyles has forced manufacturers of packaged foods to launch premium products that are healthy and rich in nutritional value.

On the other hand, Millennials and Gen Z increased the demand for high-quality products due to their interest in food and affinity toward a healthy diet. However, the major chunk of the demographic lacks equipment, time, or skills to make delicious foods at home. This creates a market for premium packaged and ready-to-eat food products. Moreover, dietary trends such as vegan and gluten-free foods are now hitting shelves of the convenience store. Thus, customers have an abundance of options to choose on-demand foods and beverages that takes care of their dietary needs without any significant time investment.

• Healthy ready-to-eat foods

While consumers look for portable, easy-to-make foods, the demand for healthy products, especially those that are made from organic ingredients and are without artificial additives. Today’s consumers are more determined to make healthy dietary choices without compromising on quality, flavor, and formats. Moreover, they want to know more about the health benefits of their foods.

Thus, several packaged foods companies have launched ready-to-eat food products that have high levels of proteins, vitamins, functional fibers, and omega-3 fatty acids. The demand for high-protein snack bars has increased exponentially as they are a suitable alternative to traditional breakfast routines.

Keeping this in mind, packaged food companies must offer healthier options across their menus and seek the attention of health-conscious customers. Moreover, both manufacturers and retailers need to offer packaged foods that do not ask customers to sacrifice their health goals but fit with their lifestyles and hectic schedules.

• Changing snacking habits

For years, snacking has every to do with indulging in favorite meals, which had the reputation of unhealthy eating choices. However, snacking habits are slowly changing among consumers. They are not only demand snacks that are convenient but they must be rich in protein and made from organic ingredients. Customers want to make snacking habits healthy and even complementary to their diet.

The future of snacking lies with packaged foods that are plant-forward, convenient, delicious, and healthy because customers aim to find the perfect balance between convenience, health, and enjoyment. Thus, several major packaged food companies have already launched packaged foods with labels such as “sugar-free”, “no added sugar”, and “natural sweeteners”.

• Advent of new technologies

With the rise in popularity of packaged foods and innovations in technologies, convenience eating has drastically changed. Users demand services and packaged foods that are delivered at home quickly and offer customization and personalization.

The advent of apps that offers home delivery of packaged foods and food-to-go vending machines have helped meet customer demand. In the future, the food delivery industry is expected to grow especially in developing countries. While Uber Eats and Deliveroo have gained market attention in developed countries, developing countries such as India have witnessed a boom in the market with rising in the popularity of Zomato and Swiggy. Thus, the future of convenience foods will depend on the penetration of these apps and awareness among consumers.

• Packaged foods for mealtimes

The busy lifestyle has increased the number of on-the-go consumers that are looking for lunch and dinner-time solutions. The consumption of packaged foods as a part of a meal is one of the major trends in the industry. While the cost of having packaged food as a meal may put pressure on pockets, individuals are willing to spend a few bucks to save effort and time.

Apart from this, packaged foods offer a limited quantity and complete freedom to consumers in terms of timing to eat, they prevent food wastage and offer convenience as food ingredients are delivered to consumers’ homes. Moreover, major packaged food companies have focused on increasing the nutritional value of their products, boosting the use of packaged foods as lunch or dinner-time meals.

• Plant-based proteins

Packaged foods have a reputation for having low nutritional value. However, companies have found a way to improve the nutritional value of convenience foods and make the best use of the latest innovations in plant-based proteins. Plant-based proteins can make packaged food more sustainable, healthier, and more functional while offering on-the-go meals and snacks.

Customers across the globe have realized the importance of plant-based proteins in their diets. What’s more, an increasing number of people demand the opportunity to fulfill their need to have ready-to-eat meals with rich protein content, especially those who have aimed to incorporate packaged foods in their everyday diets.

The impact of the Covid-19 pandemic on the packaged food industry

The outbreak of Covid-19 changed the lifestyle of people on an unprecedented level. Major Asian and European countries were forced to follow lockdown regulations and for months people were stuck inside of their houses. During the first phase of the pandemic, the demand for packaged food skyrocketed due to its longer shelf life, ease of use, and hassle-free solution to cooking.

Every major market disruption spurs innovation. For instance, during the great recession, the majority of the product launched was focused on household appliances. Similarly, the Covid-19 pandemic increased the manufacturing of ready-to-eat meals that provides a taste of restaurant food items. Although the trend of making food at home gained momentum, soon people revert to convenience foods. However, many retailers had to close their doors to comply with government regulations, which hampered the supply of packaged foods.

The Covid-19 pandemic increased the interest in immunity-boosting products and the demand for food products that boost gut health. People became more sophisticated about their dietary choices and looked for food & beverages that protect them against Coronavirus and other illnesses. This forced packaged food companies to rethink their product lines and realized that they have to meet the high expectations of consumers.

Convenience food and sustainability

A packaged food business is much more than just the delivery of ready-to-eat food. It includes the type of ingredients that are used in the food, the type of packaging used for the delivery, and the total nutritional value of the meal.

More and more people are aware of the use of pesticides on vegetables and the impact it can leave on the human body. Thus, the demand for organic foods has increased more than ever and people are ready to pay extra for them. Apart from this, people demand sustainable packaging for their packaged foods.

Sustainable packaging includes several aspects such as source reduction, adoption of recyclable materials, and replacement of non-renewable materials with renewables. This is why the demand for flexible packaged increased in the packaged food industry as it eliminates the use of the traditional way of packaging that involves plastic trays.

In the future, packaged foods that come with eco-friendly packaging will gain more importance. Today’s consumers look for convenience as well as sustainability, nutritional level of the food products. Thus, transparency regarding what’s in the food and sustainable packaging could go a long way.

Bio:- Swamini Kulkarni-

Swamini Kulkarni holds a bachelor’s degree in Instrumentation and control engineering from Pune University and works as a content writer at Allied Market Research. She is deeply fascinated by the impact of technology on human life and loves to talk about science and mythology. When she is not glued to the computer, she loves to read, travel and daydream about her areas of interest.