Demand for canned food is here to stay

This week’s blog comes as a guest blog from the INS Editorial team.

The can making and filling sectors have become beneficiaries – at least in the short term – of consumers turning their kitchen cupboards into pandemic pantries, stockpiling canned food and other long-lasting products because they fear of food shortages because of Covid-19.

“At the forefront of Covid-19 food habits is the reliance on shelf-stable food products; in the early days of the pandemic, panic buying saw many consumers stockpile items such as beans, soups and other canned foods,” Arian Bassari, consumer analyst at UK market research company GlobalData told CanTech International.

Indeed, for the time being, the pandemic is boosting a global metal canned-food sector which had seen rather stagnant sales over the last three years. London-based market researcher Euromonitor International’s senior consultant Karine Dussimon said metal canned-food comprising bakery, baby food, ready meals, frozen food, noodle, oil and snack bars, canned fruit and meat among many others saw worldwide sales declining to 57.49 billion units in 2018 from 57.8bn in 2017. And although these sales picked up slightly in 2019 to 57.57bn units, overall growth over the past three years has been insignificant.

But this is now projected to change with the Euromonitor consultant saying that metal food cans unit volume sales set to grow through 2024 – “gaining a few annual growth percentage points”. This contrasts with a January 2018 Euromonitor report where it had forecast metal food can sales to decline globally between 2016-2021, saying “consumers are shifting away from canned to chilled and frozen food and other formats that offer added functionality, such as thin wall plastic containers and pouches”.

But pandemic stockpiling of canned food “will boost shelf stable food categories such as beans, tomatoes and meat which are key to metal food cans sales,” with can’s product preservation valued over convenience during the perceived uncertainty over food supplies while Covid-19 cases grow, the consultant added.

Chief operating officer of Decernis, a Washington DC-based food chain traceability technology company, Kevin C Kenny, agreed that orders for “shelf-stable canned foods – fruits and meats in particular” had risen worldwide.

In France, for example, another market research company, US-based Nielsen, noticed an atypical increase in supermarket sales linked to the government’s announcement on 28 February, saying the virus was rapidly spreading in the country. As a result, the following day sales of canned fish doubled from their usual rates, with canned vegetable sales increasing by 50% compared to the average number of cans sold on previous Saturdays this year, Nielsen reports. The US market researcher further spotted that in the second half of March, French buyers were opting to buy more canned organic products. The sales of organic canned vegetables rose by +79% compared to pre-pandemic rates, which the increase in sales of canned conventional vegetables still rose, but by +64%.

THE POSITION IN EUROPE

Potentially easing the strong demand for canned food, French company making processed vegetables, Bonduelle, has said it intends to focus also on selling frozen food. But Covid-19’s unpredictability means that such big canners are struggling to plan ahead.

Moreover, the highly developed retail networks of France and elsewhere in Europe have been able to cope with these retail booms. “Once the initial panic buying and stockpiling reduced, supermarkets were able to restock quickly and avoid shortages”, Robert Fell, director and chief executive of the Metal Packaging Manufacturers Association (MPMA) tells CanTech International.

GlobalData’s Coronavirus Tracker Consumer Survey – run weekly across 11 countries worldwide, including China – has found the UK currently has the largest proportion of consumers in countries assessed who have changed their purchasing habits by buying more canned food. In the third week of April, 9% of the British respondents claimed to be buying more of these products.

This may not be sustained if the outbreak starts to subside; GlobalData’s statisticians have observed “as the situation deteriorates or improves, the purchasing of canned items will likely change accordingly”, notes Bassari.

In Italy, a country experiencing one of the worst outbreaks, only 20% of consumers said they had not bought canned food since the disease struck, whereas 15% say that they are purchasing more canned food now compared to before the virus.

By contrast, in Sweden where Covid-19 containment rules have been looser than in other European countries, 46% of the respondents said they were not currently purchasing canned food and do not intend to in future, whilst only 1% stated they are purchasing more food in tins at present.

The popularity of canned food during the crisis has also forced producers look for creative strategies to remain open. “As a result of the huge surge in demand in the UK for Heinz sauces, beans, soups and pasta and the ongoing challenges of maintaining supply across all parts of the trade we have expanded our loading capacity and put on extra weekend shifts to make more deliveries to our retail and wholesale customers”, Heinz director, corporate & government affairs EMEA, Nigel Dickie explains. But compromises have had to be made and Dickie added that unprecedented demand for Heinz varieties has also resulted in a decision to concentrate on manufacturing their most popular products, meaning lower volume sellers might not be available for a few weeks.

Of course, not all markets are the same and the return to normal canned food purchases has been more marked in some than others.

Italy, a major European food market, is one good example. Analysing sales data culled by data analytics firm Nielson, the national association of metallic and metal-related packaging manufacturers (ANFIMA – Associazione Nazionale fra i Fabbricanti di Imballaggi Metallici e Affini) reported that in the first week (9-15 March) of Italy’s national lockdown due to the Covid-19 health crisis, sales for foods with a long shelf life in the mass retail channel registered double-digit growth; canned and glass tomato preserves grew by 82.2%, canned meat by 56% and canned tuna in olive oil by 33.6%, compared to the same period in 2019.

Despite this temporary “pantry stocking” hike, however, demand for canned food had largely normalised by 23-29 March, Nielsen data shows, albeit with steep rises in sales of tomato preserves in can and glass packs (+52.9%), and canned (plus to a lesser extent bottled) meat and fish preserves (+16.7%).

In one key Asian victim of the pandemic – South Korea – there was an even more marked rise and fall in demand for canned food, with a hoarding hike being cancelled out by the prowess of the country’s e-commerce delivery sector. Following confirmation of the first domestic Covid-19 cases, sales of canned food soared in mid-February, with data service provider Statista reporting online sales of canned food by South Korean online retailer SSG increasing 268% in the second week of February compared to the previous week, outpacing increases in sales of instant noodles (175%) and prepared meals (168%).

Analysis of invoice data of courier service CJ Korea Express recorded the number of canned foods deliveries in the country soaring from 40,000 in February’s third week to 140,000 in the fourth week, but online hoarding quickly faded afterwards, with canned food deliveries returning to normal levels.

Instead, in March CJ Korea Express’s deliveries of kitchen devices such as coffee makers, yoghurt makers and dough kneading machines rose markedly, by 22.5%, 30.2% and 61.6% respectively, with DIY food kit home-preparation deliveries also rising.

That said, manufacturers, retailers and market researchers do generally seem to agree that demand for food in cans will experience a long-term increase (albeit one that may vary from country to country).

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