Food and drink needs to create experience and offer good value to stay relevant

According to recent British Retail Consortium figures, consumer spending in shops decreased in May influenced by rising inflation and weak wage growth in the UK.

Many shoppers are refining spending habits and identifying where savings could be made. However, economic factors are not the only culprit for a downturn in retail spending. People are also prioritising experiences when buying non-essential goods. Data from Barclaycard showed that spending on entertainment rose 12% in May 2017.

A survey from Deloitte confirmed that dining out, cinema, and holidays are now more important to consumers of all ages than owning a variety of goods. Experiences are also what people increasingly use to define themselves in social media.

The sectors that suffered most in May, according to the BRC, were household goods and clothing, while food and drink remained stable due to warm weather and inflation. However, food and drink manufacturers and retailers need to focus on creating moments of enjoyment for their customers if they want to be in tune with consumer trends.

A GlobalData survey from 2016 found that 66% of UK consumers are 'always' or 'often' influenced by how enjoyable or unique the product is when buying alcohol, followed by non-alcoholic drinks (63%), food (58%), beauty and grooming (51%), and household (32%). The figures clearly show that alcohol, non-alcoholic drinks, and food are among the sectors best positioned to take advantage of the experience economy mindset.

Food and drink pairing can capitalise on this consumer demand. This concept has gone beyond traditional food and wine matching, with opportunities existing to promote spirits that work well with specific meals. Combinations of vodka with smoked fish, which is popular in Russia, have started entering the UK market. Soft drinks targeting adults can explore surprising savoury flavors that complement food, similarly to Nix & Kix’s line of drinks featuring cayenne chilli.

Craft food and drink are perceived as having high-quality ingredients by 39% of UK consumers, according to GlobalData's Q3 survey, 2016. The survey also found out that 37% of UK consumers think “craft” means “handmade” and 32% associate it with “authentic.”

Food and drink manufacturers can implement key elements most associated with 'craft', namely quality ingredients, being handmade, and authenticity, so their product innovations are best placed to excite and engage consumers.

As well as being experiential, food and drink needs to represent good value for money to respond to consumer trends. This can manifest as foods and drinks sold together on offer, which links pairing with good value. M&S’s 'Dine in for two with free wine or non-alcoholic alternative' offer is a popular example.