The trend toward increased in-home dining prompted by COVID-19 lockdowns, is set to continue into the future as restricitions ease, with value and innovation set to drive results in this category, a UBS report finds.
“We expect in-home eating to remain at elevated levels post COVID-19,” the report reads, signalling that restaurant closures and a need to save cash will give rise to more consumers cooking at home.
The latest report indicates that restaurant closures could see the market contract by $5 billion over the next five years, and increased adoption of online delivery and meal-kits is expected to fuel interest in home cooking.
Consumers are also likely to be cautious about returning to restaurants due to the potential increased exposure to germs.
“We believe we will see fewer, but more planned, eating-out occasions, further exacerbated by industry consolidation. The net impact will, in our view, see a better educated, more decisive shopper that has higher expectations. We believe businesses that can operate a true pull (vs. push) model should win,” the report reads.
UBS analysts indicate that value and innovation will heavily influence purchasing decisions in this space.
“We believe consumers will be more focused in where they see value, with new / innovative products likely to be a focus. This was already evident pre-COVID-19 where consumers were providing greater weight in their purchasing decisions to new products,” the report reads.
The interest in home dining innovation spells good news for meal kit companies, like Marley Spoon.
Late last month, Marley Spoon reported a surge in demand globally for its home-delivered meal kits amid the coronavirus lockdowns.
UBS analysts believe COVID-19 will accelerate the shift to retail-pull models and that vertically integrated grocers will be best positioned to benefit.
Private label is also predicted to be a big winner in the trend towards eating at home, as consumers lean towards better value products.
“All of the listed grocers in Australia continue to see private label growth outpace brands. In a world where value is more of a focus we would expect private label products that offer value (price and quality) to outperform,” the report said.