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PepsiCo Foods CEO Comments on Post COVID Trends

01/23/2022

TotalRetail recently commented on a presentation by Steven Williams, CEO of PepsiCo Foods.  Delivering a keynote address at the 2022 National Retail Federation Big Show this past week, Williams commented on trends emerging during COVID that will persist after the pandemic is suppressed.  Major changes included:-

 

  • E-commerce grew at a faster rate than would otherwise have occurred since consumers were reluctant to shop at large supermarkets.  This trend will continue as evidenced by the investments made by Walmart, Kroger and Albertsons who are competing with Amazon, the industry leader.  Williams noted “E-commerce is here to stay as far as I’m concerned.”
     
  • During the first two quarters following the emergence of COVID, there was a marked swing to in-home meal preparation and dining.  This trend will continue, but will require products offering ease of preparation and cleanup.  Many supermarkets have introduced prepared meals and the home cooking trend has provided a lifeline to companies shipping prepared meals.  Some companies have established strategic partnerships with supermarkets to avoid the cost of shipping and to take advantage of both curiosity and availability of products.  Home delivery of restaurant-prepared meals soared following the advent of COVID, but other than affluent urban consumers, the cost of delivery is an important consideration in patterns of purchasing.
     
  • Value has emerged as an important determinant in the purchase decision.  Food inflation has increased the price of both restaurant meals and supermarket ingredients.  It is apparent that escalation in the cost of protein and especially beef and pork, has benefited the poultry industry with chicken gaining market share both in restaurants, QSRs, and retail.  Eggs benefit from relatively low price based on nutrient content, versatility, and ease of preparation.  The challenge facing the egg industry will be to convince consumers that eggs are suitable for lunches and dinner mealtimes, expanding the traditional acceptance of eggs as a breakfast staple.
     
  • Patronage of small, local supermarkets - Many consumers concerned over the potential for exposure in large supermarkets shifted their purchases to smaller local stores.  This trend was especially evident in urban areas.  The brick-and-mortar segment of Amazon is certainly benefitting from this move with high-technology stores incorporating smart carts and just-walk-out options.