Many Dutch food companies are witnessing a decline in demand for their products, primarily due to decreasing supermarket sales. Despite higher prices leading to increased revenue, volume sales remain stagnant. However, Generation Z, which currently spends significantly in the hospitality sector, could potentially reverse the trend in supermarket sales.
The majority of food purchases take place through supermarkets. Statistics from the CBS (Central Bureau for Statistics) indicate that the decline in supermarket sales is the primary factor causing the current slump in food production. What's paradoxical is the surge in volumes of hospitality sales, contrasting with the decline in supermarket volumes.
During the pandemic, the production within the Dutch food industry dropped by three percent, as reports from companies like Kraft Heinz and Friesland Campina suggest. Even though hospitality sector volumes are now at pre-pandemic levels, which is unexpected given economic recessions, this hints at a possible shift from supermarket consumption to hospitality consumption.
The Food Service Institute posits that the 'convenience generation' (born after 1980) might be driving this trend. Generation Z, those born after 1996, according to their data, spends an average of €44.12 per week on out-of-home food consumption. However, if the economic climate changes due to inflation and higher interest rates, their focus might shift back to supermarkets.
Generation Z presents a challenge for supermarkets. Their loyalty is fickle, and their purchasing behavior is heavily influenced by online trends, influencers, and the vast choice options of e-commerce. Supermarkets need to be flexible in adapting to their changing preferences and follow the trend of convenience, for instance, by offering ready-made meals and delivery services.
Collaborating with food manufacturers can assist in better aligning with Generation Z's tastes and preferences. Consider exotic flavors like spicy ketchup with mango or iced coffee with caramel. Brand manufacturers also have the edge, as creating communities around their brand can better engage and understand this generation.
In conclusion, Generation Z, expected to comprise 4.4 million individuals by 2030, poses both challenges and opportunities for the Dutch food industry. By innovating now, supermarkets and manufacturers are investing in a sustainable future.
Source: ABN AMRO