World meat industry news

Trade is one of the most ancient forms of human activity, and although its form is constantly undergoing changes, three main components remain unchanged—namely the presence of a seller, a buyer and a good.

Despite the fact that it is more challenging to trace the transformation of the relationship between these components within a short time period, the stores themselves, the goods, and most importantly the customers did not stop changing both in 2020 and 2021, just like thousands of years before. What have these changes led to and how will they affect retail in 2022? There are six key trends that will continue to have a strong impact the FMCG retail market in the coming months.

ONLINE TRADE VICTORY

E-commerce is the only channel that is experiencing high growth rates regardless of country, region or continent. Whereas the offline market often develops thanks to inflation, the e-commerce segment develops through real consumption. 
The reasons why consumers choose to shop for FMCG online vary greatly from country to country. In France, valued most of all is the range of fresh products, in Italy it is availability of numerous new products, in Finland it would be the convenience of navigating online retailers’ websites, and in Russia, fast delivery[1]. But if the names of specific countries are removed from the list of advantages, an important thing can be noted: online trade today covers all the key needs of buyers. 
Online has become a complete replica of offline, and modern buyers go there even for minor purchases. If a year ago the main mission at online stores was stocking up in advance, now the popularity of various types of baskets has leveled off: Carts with personal care products account for 24% of orders, 15% are occupied by fresh and short shelf life products, 10% are groceries, 10% are pet supplies, and only 9% correspond to purchases for future use[2]. 
Over the past year, the number of online FMCG orders has quadrupled, and the changes that we are seeing indicate that the wall between the online and offline markets has finally crumbled, and the channel is going to proceed to develop at a faster pace: more than half of the retailers and manufacturers surveyed by NielsenIQ expect that by the end of 2022 the share of online FMCG sales in Russia will reach 5–10%[3].

THE POTENTIAL OF DISCOUNTERS

Today, the share of FMCG sales in Russian discounters is 32%, whereas the number of monthly visits of the channel remains higher than in any other format, namely more than seven times per month[4]. However, these values ​​still have a lot of growth potential, largely due to the evolving hard discounter format. Customers appreciate these for low prices, but no longer perceive them as stores with cheap goods. Instead they think in other categories: for instance, the main characteristic of a visit to Fix Price is the assortment, which includes many useful little things; Da! chain can boast cleanliness and hygiene in the store; Hleb-Sol [Bread and Salt] is valued for close proximity to one’s home; and Chizhik’s main feature is convenience for small purchases and restocking. 
Fortunately, Russian retailers have the opportunity to use the already accumulated global experience to develop their own businesses. In Eastern Europe, where discounters have long occupied a steady niche and are responsible for about 40% of FMCG sales, the focus of hard discounters’ development has shifted toward further improving the shopping experience: this implies the atmosphere in the store, emphasis on ultra-fresh products and baked goods, the launch of limited ranges of goods from other countries and local producers, and active communication with the audience. All these steps allowed discount stores to be transformed from “cheap” to “trendy” stores, and took the channel to a new level. 

NEW MEANING OF IMPULSE DEMAND

One of the most striking trends in the FMCG market at the moment is the formation of a new model of impulse consumption, which was caused by the development of express delivery services. In the first half of 2021 alone, the number of dark stores of the two most famous players in this segment, Yandex.Lavka and Samokat, increased by 60%, and the number of orders of the latter more than tripled, exceeding 5 million[5]. The impact of express delivery on the online FMCG market is so great that it resulted in a 39% decrease in the average check in the FMCG online market during the year. 
Not only do new impulse consumption models enable the creation of new situations for making unplanned online purchases through attractive prices or limited offers, but they also allow the economy of the order to be managed more effectively. For example, OZON Express achieves an average check increase of up to 10% thanks to accurate recommendations both on the category page and in the cart itself. 
Moreover, through fast delivery, the scope of impulse shopping has expanded even into categories of goods that customers used to only purchase on a planned basis, such as appliances or household goods. One-hour delivery, sales, installment options, and returns available have finally removed barriers to making impulse purchases, regardless of the cost. 
The speed of delivery is becoming one of the main competitive advantages in the market, and express delivery will undoubtedly continue to strengthen its position as one of the central elements to shopping, and influence customer expectations.

CONSCIOUS CONSUMPTION: FROM SLOGANS TO ACTION

Today, no more than 0.1% of consumer goods in retail chains have an official Russian certificate of organic production. About 2% of products do contain a hint of naturalness in the title. At the same time, 29% of buyers[6] admit that they eat healthy food and practice waste sorting—where does such a big difference between “supply” and “demand” stem from?
One of the main reasons is that, despite the double-digit dynamics of sales of “responsible” goods, manufacturers and retailers do not use this growth point to develop their range, often relying on the common belief that the trend toward conscious consumption in Russia is irrelevant. But the latter is not true. 
Every year buyers are becoming increasingly interested in the environmental agenda, and right now they are moving from supporting ideas in a general sense to concrete actions that are easy to integrate into everyday life. 
According to Google, generalized searches are declining globally, with users in the UK searching for “vegan diets” 47% less frequently, while the more specific search “organic meat delivery” saw growth by 158%. Searches for “vegan restaurant” in Germany fell by 17%, while “vegan lunch recipe” went up by 180%. In Russia, the number of “vegan” queries decreased by 30%, while, for example, “refill” (as a way to reduce the amount of purchased plastic) increased by 25%[7]. 
Further popularization of the trend toward conscious consumption lies in the plane of simple actions accessible by everyone. It is those that will gradually form more complex habits, and FMCG market players have every chance to take advantage of this opportunity and build strong long-term relationships with their customers.

PRIVATE LABELS

Savings remain one of the main trends that largely determine the direction of the FMCG market, especially against the backdrop of a slowing global economy and declining disposable incomes in Russia, where four of the five key consumer concerns are related to rising prices. 
Buyers’ attempts to optimize their budget and find new ways to cut expenses have led to a new wave of private label chains, whose share of sales in Russia has reached the highest levels over the past five years, namely more than 5%. Despite the record, it still remains one of the lowest in the world. For comparison, in Austria, the Netherlands or France, the share of private label sales in the FMCG market exceeds 30%. In Portugal it is at 35%, in Spain it almost reaches 40%, whereas in Switzerland it is higher than 50%.
Private labels are the trend that could permeate all the other trends. That includes healthy products, and impulse demand, and quality at an affordable price. Amid the explosive development of discounters and online trade, one can be certain that private labels will conquer a large share of the market in the near future.

EMOTIONS ARE KEY

Impulse demand, conscious consumption, discounters, online retail, and private labels—these five trends promise to change the retail industry in 2022 the most. However, there is one more matter to mention: emotions. Many are inclined to believe that the presence of the emotional component is only possible offline, while the online realm is the territory of convenience and utility. But it is difficult to agree with this statement. 
Offline shopping is indeed filled with emotions that surround us everywhere: smells, tactile sensations, light, interaction with the product in the window, and communication with staff or other customers. What could the online channel offer? A different flavor, but not lack thereof. Emotions online are linked with a wide range of products, the ability to find exactly what one has been looking for, personal offers and gifts, and involvement. Moreover, online emotions may manifest themselves not only in the form of interaction at the level of buyers and sellers, but also at the level of a group of buyers. 
The experience of Asian countries suggests that even the search for goods itself can be a fascinating story, and not just a mere function. In Eastern countries, online opportunities are used much more widely, creating a fundamentally new range of emotions, involvement and long-term loyalty for customers, and Russian retailers should definitely pay attention to this expertise.
Regardless of the trends and the extent to which they affect the market, one thing is certain: retail of the future is not just a purchase, but an experience, no matter how banal this may sound. Said experience can be functional, emotional and comfortable at the same time.