The Future of Food Chains

CUSHMAN & WAKEFIELD

CON S U M P T I ON

However, technology, automation, and increasing urban population densities are quickly aiding retaillers to overcome these challenges, increasing the scale of opportunity posed by the E-grocery sector. Twinned with changes in consumer preference, greater digital literacy, and preferences for home delivery, the scope for growth within the online food sector is large. Add to that a wave of healthy competition from new market entrants and innovators, and the sector is set to greatly change how we purchase food substantially, with likely emphasis placed on efficient omni-channel operations over coming years.

ONLINE FOOD & DRINK VALUE & PENETRATION

E-GROCERY

25,000

20%

Households will source and purchase a growing proportion of their food via the E-grocery market, reducing waste, while maximizing convenience and experimentation. As a result, supermarkets will re-focus efforts on revitalizing store concepts, with a drive to quality, variety and retained custom through detailed knowledge of consumer habits.

20,000

15%

15,000

Further challenges also exist for retaillers, scaling a profitable online grocery operation remains a key challenge for the sector, owed to the complexity of consumer baskets and the associated costs of assembling, handling and processing a high frequency of orders.

The online grocery market the largest product category globally accounting for nearly half of global consumption, it is also the most severely lagging sector in terms of online penetration. With the online penetration rates for food significantly below that of other categories. This is largely due to the innate preference of consumers wanting to touch, see and smell their food in order to ensure quality.

10%

10,000

5%

5,000

GLOBAL SECTOR REVENUE & ONLINE PENETRATION

0%

100

8000

‘07

‘09

‘11 ‘13

‘15

‘17

‘19

‘21

‘23

2027 ‘25

2005

ONLINE VALUE

ONLINE SHARE

80

6000

60

4000

TECHNOLOGY, AUTOMATION, AND INCREASING URBAN POPULATION DENSITIES ARE QUICKLY AIDING RETAILLERS TO OVERCOME THESE CHALLENGES, INCREASING THE SCALE OF OPPORTUNITY POSED BY THE E-GROCERY SECTOR.

40

2000

20

0

0

APPAREL

ONLINE FOOD DELIVERY

MEDIA

FOOD AT HOME

FURNITURE

(ONLINE PENETRATION %)

($ BILLION ANNUAL REVENUE)

GLOBAL REVENUE

ONLINE PENETRATION

61

FUTURE OF FOOD CHAIN |