Even before the COVID-19 pandemic, online grocery was booming. Forecasts from IGD predicted the European online grocery market would see a 66% rise in sales through to 2023, with the sector expected to generate revenues of €47bn.
The coronavirus crisis has seen retailer capacity to meet online demand stretched to beyond its limit and supermarkets have stepped up investment in their digital capabilities. In light of this, IGD’s forecasts – made in 2019 – could even seem conservative.
Spoon Guru is a London-based software developer that works with retailers to boost the performance of their search functions. It counts industry giants like Tesco, Albert Heijn and Australia's Woolworths as customers. According to co-founder and co-CEO Markus Stripf, COVID-19 is having a massive impact on what people want from food.
“There were two major trends that started before COVID but have been accelerated. One is people are buying more foods online… Digital platforms are getting significant cash injections because the industry and market thinks this is here to stay. This isn’t just because of COVID. People are being re-educated or educated to buy foods online. They appreciate the convenience and high levels of personalisation,” he told FoodNavigator.
“The second trend is health. Before COVID consumers were becoming more health conscious… During this current health crisis there is even more demand for healthy products. People are reducing their meat intake and people are looking for foods that nourish their bodies.”
The changing nature of search: From product to attribute
When Spoon Guru launched in 2015 with a focus on allergens, Stripf recalled the start-up wanted to be ‘Google for food’. Quickly, this ambition expanded.
“Google isn’t reliable enough for food searchers. Even for relatively simple search terms like ‘vegan sausages’ half the results coming back aren’t vegan. What happens when you run a household where the daughter has a nut allergy, the dad only eats high protein foods and the mum has just turned vegan? That isn’t an uncommon potential use case these days. Google can’t help you with that, Siri can’t help you with that, Amazon can’t help you with that. No retailer can respond to that. We want to empower the industry to respond to those types of scenarios.”
This is important because the nature of food searcher is changing. In the early days of e-commerce, it was said that brands over-index because consumers would search by product or brand. This, Stripf believes, is no longer the case.
“People don’t search by brand anymore, attributes are king. People look for low-sugar, or organic, or seasonal, or local, or high protein. Our capability allows our retailers to respond to those type of queries. We really believe attributes are king now and that is how people want to find or discover food.”
The importance of brand recognition is evolving. With people searching based on product attributes, it is more important than ever that food manufacturers have their finger on the pulse when it comes to emerging consumer trends.
“Manufacturers should understand consumer trends and respond more quickly to consumer expectations. Like the meat reducing trend. One in five UK households has reduced their meat intake since COVID. That is driven by concerns for health but also concerns for the environment. That trend was something we saw one and a half years ago. Now manufacturers are catching up. Our recommendation is: be more proactive in responding to changes in consumer demand.”
Agile product development
In terms of agile NPD, SpoonGuru practices what it preaches.
The company has access to swathes of data from its customers that it is able to aggregate and use to inform its product development process.
“We see a lot of the data, we see conversion rates, we see baskets… We can aggregate the datasets and use that as insight. We do it mainly to build better products to inform our product development.
“We have a number of modules retailers can use. They can integrate our tech into their search and browse engine… We basically reclassify their entire catalogues and assign additional dietary attributes, hundreds of dietary attributes, that allow them to respond to search queries more accurately without relying on an explicit label statement.
“The other product we have is based on propensity analysis, which is very powerful. You can analyse people’s propensity for specific dietary preferences or requirements. You can analyse whether a household only buys meat-free foods, or only buys Kosher. That level of profiling allows our partners to provide much more relevant shopping experiences.”
Within six weeks of the onset of COVID, and an accompanying spike in searches for immune-boosting foods, Spoon Guru was able to develop an ‘immunity tag’ that helps consumers identify foods with immunity benefits.
“People are educating themselves. There is not much we can do in the current health crisis. One thing we can do is eat more healthily to get more control over this situation… Products that have immunity strengthening properties are selling more than ever before. It is driven by consumers and the industry needs to respond.”
Future food trends: Health, sustainability and provenance
While interest in immunity has been inflated by COVID-19, the trend should be viewed within the context of the long-term growth in demand for healthy eating.
Data from Nielsen reveals that 64% of the population are on some form of exclusionary diet. Spoon Guru’s own research shows that 74% of people in the UK want to lead healthier lives and have ‘very specific’ dietary requirements. Only 1 in 4 think supermarkets do enough to support their health.
“There will be much more demand on manufacturers to produce healthy products. That is a huge trend and it is here to stay,” Stripf predicted.
Spoon Guru specifically supports this demand through its ‘healthy swaps’ module. “We know consumers want to lead healthier lives but they often struggle because it is just too difficult and there is too much friction. Healthy swaps allow you to find suitable alternatives that are healthier for you, but within context. So, if you look at a chocolate bar… we find other chocolate bars that are healthier. They may have higher fibre content, lower sugar, lower salt. That is very popular and it works. If somebody looks at a chocolate bar and you show them an apple, it isn’t going to work. That is one step too far.
“They call it nudge behaviour. If you nudge people along and help them make those incremental steps, people really embrace those tools. It is encouraging for us and also to our partners – because they want to get the population to eat more healthily but you have to take it one step at a time.”
Health – and concerns for the environment – are propelling another trend that Stripf suggested is ‘here to stay’: increased adoption of meat reduction or flexitarian diets. “One in three millennials now eat a plant-based diet,” the food tech innovator pointed out.
He has also witnessed an increase in searches based on the sustainability of products. “Concerns for the environment are here to stay. People are looking for sustainability claims and environmentally friendly products,” Stripf revealed.
In terms of the level of granular detail that can be provided on the sustainability of a product ‘Some things are easier than others’. Stripf continued: “Analysing carbon footprint for instance… there is a lot of activity in that space. Provenance is very important. We can tell you where a product originates if people prefer to buy local products because they think the carbon footprint is not as exaggerated. Provenance is becoming very important.
“Understanding from farm-to-fork is something that resonates with people. They want to understand where their food comes from… They have concerns for their health and for the environment. They want to know individual ingredients in products, how it was sourced and the environmental impact, including packaging.”
The segment of one
As people’s expectations and dietary preferences diversify, shoppers are nevertheless increasingly expecting personalised experiences – both in terms of the products and services they receive.
Stripf noted that the grocery sector is somewhat behind the curve on this. “Other industries got there first. If you look at entertainment – Netflix or YouTube or Spotify – those platforms learn from your interaction with a service. The experience becomes more personalised and curated. Grocery retail hasn’t really caught up and that is crazy because you don’t actually change your dietary preferences that often. If a household only eats Halal foods for religious reasons, that’s not going to change that often. Why don’t you use that knowledge to provide more relevant and personalised experiences?”
And it isn’t just the retailer interface with consumers that needs to adapt to personalisation. “Food is becoming more personalised and people are basing their purchasing decisions on very specific ingredients. The industry needs to respond to that. There is no such thing as a universal diet, or a generic healthy diet,” Stripf enthused.
Looking at developments in microbiome research as case in point, he stressed ‘we truly are what we eat’.
“People are becoming very conscious of that. They want transparency, they want to know what they are putting into their bodies, and they have highly complex individual requirements.”
Ultimately – or rather within the space of a ‘few years’ – he sees a future where people will be able to specify products based on a wide array of factors from ingredients and provenance to environmental footprint and specific health outcomes.
“We call it the segment of one, the holy grail of personalisation, where every single element can be catered for by the industry. We will get there in gradual steps. We will start the ability to set up a profile at household level… That’s something that is happening now. To bring it down to a greater level of granularity. It is going to take a little while. But it is what people want and the technology is there to support that.”