COVID-19: Impact on the Future of Food

Let's take a closer look into the impact COVID-19 has had on the food industry and explore the future of food.

The global pandemic has created major changes in our habits and daily lives. To stay healthy and safe, we have had to make drastic adaptions in all aspects, including how and what we eat. Businesses have been severely affected as well, and the food and beverage industry has had to learn to survive in this locked-down environment. Let's take a closer look into the impact COVID-19 has had on the food industry and explore the future of food.

Five major areas we see growing post-pandemic are e-commerce & food delivery, ghost kitchens, kitchen & restaurant tech, meat alternatives, and the rise of industry 4.0.

Food Delivery/e-Commerce

The pandemic has seen drastic growth in food delivery and e-commerce. In June 2020, U.S. online grocery sales reached $7.2 billion. Pre-pandemic, food deliveries grew 23% over four years, compared to a 152% growth for Uber Eats in June 2020. Food delivery has become a huge market in the future of food, and we believe companies will be creating and adjusting services post-pandemic.

The four top U.S. food delivery applications in the U.S. saw a $3 billion collective revenue increase in the second and third quarters of 2020, while COVID-19 imposed shelter-in-place restrictions.

With indoor dining restrictions and lockdowns in place, consumers have become reliant on food delivery. The pandemic introduced contact-less delivery, curbside pickup, and even relaxed licensing rules, introducing third parties to the grocery and restaurant experience. In order to preserve in-person shopping and dining, technology will need to improve the time and convenience for consumers.

Self-Checkout options have become ubiquitous in grocery stores, however developing more seamless payment options and potentially self-ordering kiosks will keep customers from feeling like their time is being wasted. There are even predictions that a redesign of how grocery stores are stocked will make the experience take about half the typical time. We see this shift to focus on e-commerce emerging post-pandemic with larger grocery chains looking to purchase online grocery retailers. Ahold Delhaize's, a large Dutch retail grocery chain, agreed to purchase 80% of FreshDirect, a pure-play online grocery store with twenty years of experience.

Ghost Kitchens

Ghost kitchens, delivery-only restaurants, could be a $1 trillion business by 2030. These concepts can thrive as they partner with delivery brands like Uber, Doordash, etc. without the overhead and cost of brick-and-mortar restaurants. CloudKitchens has received hundreds of millions of dollars in funding and has spent over $130 million on real-estate for it's kitchens. Ordermark is a software company that works with restaurants to manage online orders and host virtual brands. They recently received $120 million in funding.

The appeal is the speed; ghost kitchens do not require Michelin-star che