How are populations changing and how is this affecting the shopping behaviour of food customers?
Population increases and changes in demographics have long been discussed by many strategists, economists and marketeers as they tackle the requirements occurring in food consumption and shopping behaviour. The United Kingdom is not immune to such changes in population and in many cases has a unique position when it comes to its population expressing new views.
Population change
The IMF made a growth forecast back in 2015 which looked at which regions of the world had increased their population numbers since the year 2000. The figures were quite revealing because there was a direct correlation with how much food was eaten around the world and the size and increase in a population. Since those figures were published we can see which regions are now clamouring for food and where the growth markets happen to be.
The Far East has seen the biggest increase in population size with a growth figure of 7.1 per cent followed by 6.4 per cent in the Near, Middle East and Indian sub-continent and then 5.8 per cent in Africa. The lowest growth rates are in Europe at 1.5 per cent, South America (2.6 per cent) and North America (3 per cent). Europe’s population rise is being outstripped at the moment by growth in eastern regions.
On the face of it, globalisation as we would call it is accelerating at a pace and partly in line with population increases. By 2030, 79 per cent of the middle classes will be in the emerging worlds which encompass China, the Far East and other parts of Asia. The populations of the world will also be largely urbanised because 70 per cent will be living in cities by 2050. In India, half the population is already an urban one.
Unfortunately, when it comes to populations enjoying good nutrition, 15 per cent of the global population is still under nourished if not malnourished. The likelihood is that this figure will mushroom as population growth continues.
Projections for population growth in the UK
We know that population growth in the United Kingdom will continue to grow. The ONS (Oxford University’s COMPAS – Centre on Migration, Policy and Society) have looked at known and projected population growth in the UK. Back in 2012 the number was 64 million but by 2027 it will have grown by 6 million to 70 million. In 2037 it is projected to have grown in a decade by a further 3 million to 73 million. In many respects we can see a gradual slowing down in population growth but there is growth none the less. In this respect the UK will still be demanding in line with all other countries an increase in food supply to meet the rising numbers of people.
What are the three main factors driving UK food trends?
There are three main factors which impact on food trends in the UK at this moment in time. The first is globalisation, second is population size and growth and the third is perhaps least discussed in many ways – the use of better technology for food supply, processing and storage.
Globalisation reflects how virtually all parts of the world are accessible to consumers be it with goods, services and being able to move to a variety of countries. One of the consequences of population movements is the formation and growth of mega cities like London and New York, and the rise of the middle classes which has become more multicultural in mix and purpose. Mixed in with this are the effects of climate change particularly on the environment and the production of food and the need for what is termed food security and sustainability.
We know population is a second factor. Population growth has seen a rise in urbanisation at the expense of rural living. There is also an increase in affluence for many of these populations as they become more middle class which means there is more money available for spending on higher quality foods. The number of millennials is also rising which in turn will all be getting older and living certainly we hope, much longer. One aspect which influences food culture and shopping behaviour is the role of net migration. Not only is that happening with people moving to and living in cities but many of them moving to other countries where they can enjoy the lifestyles of the incumbents. With these visitors come new food ideas and cuisines.
As a third factor, technology is playing its part and often directly as in improved food production and processing. There is also a capability for better nutrition and certainly rise in protein consumption as opposed to fats and carbohydrates because of better education. Food distribution is better and the way we obtain our food has improved – in some cases it’s possible to order it simply on-line without leaving the sofa.
The impact of social and lifestyle changes on shopping behaviour
Generally, we in the UK are tending to live in closer family units rather than moving away. Sons and daughters tend to be living with their parents increasingly more often as it becomes more expensive to own a house. We are concerned about disease, our diet and taking more exercise so that we can live longer. We want to enjoy our longevity without being hampered by illness.
The food consumer is getting older whilst shopping for younger and more impactful food products. In truth consumers are looking at the provenance of food and to own their health and well being which means eating the right foods and in the most appropriate amounts. There is a real shift towards fresher, higher quality food hence the rise in consuming more proteins apparently.
The economic and structural changes affecting shopping behaviour
As a population we are spending less but also saving less because the cost of living is steadily rising. There is a much lower growth in FMCG (fast moving consumer goods) products and because of the growth of the online shopper, the high street including supermarkets are steadily disappearing. Many people who use the internet to shop are not very loyal customers or consumers and will try anything once.
According to Nielsen’s Retailer and Business Insights Report for the UK on changes to retail infrastructure, we can expect some major differences by 2020. It is thought that next year 10 per cent of all grocery shopping will be on line and will no doubt continue rising as more of us at all age levels become tech. savvy. Within the technology world generally there is a distinction in the use of computers. The main desk top computers are not used for the same jobs as smart phones and tablets. About 90 per cent of all orders are likely to be made on these smaller units. From a shopping point of view, only 33 per cent of us will use convenience stores and supermarkets to purchase our goods.
What is the desirable demographic for the next generation?
We know, given the current trend that largely the children of today who are from middle class backgrounds will continue to keep this status. They will be joined by others however as the class structure erodes. We would all like in the future to lead comfortable lifestyles and have a disposable income – one where we can spend our money with relatively ease.
We will become less loyal to brands and to retailers because of the rise in on line shopping. The use of technology is as important as the impact of socio-economic factors on our lifestyle and so it is with shopping behaviour and how we acquire our food.
We are developing a global outlook on life however restrictive our future engagement with Europe may become. We’re also very conscious of the changes taking place to our environment. We will need to make trade offs in terms of the supply chain sending us food from far away countries versus the energy required to bring it to us. We’re also likely to increase our concern for animal welfare which means adopting ethical consumerism.
Lifestyle is also influencing and impacting consumption. Government statistics in the UK indicate that half of the UK population will be obese by 2050. For 1 in 2 shoppers, dietary decisions have become key in what is now being eaten and so what we shop for. Apparently, over 50 per cent of all shoppers already ‘look behind the label’ for information on fats, salt, sugar and total calories. As households age, health priorities will change. Health rather than diet will become more important to an ageing population. We would also expect world foods to be driven by an increased ethnicity of spend.
The rise of the consumer: impact on shopping behaviours
Consumers have become extremely powerful. They have acquired unprecedented choice, power and influence when it comes to deciding on goods and services. Because they have plenty of spending power in general because of their income, they are now much more demanding rather than frivolous with their money. They’re connected through the world-wide web and internet and through social media and because of the technology behind it use the power of ‘word of mouth’ to communicate their reasons for choosing goods, services and so on. They now exercise real power compared to thirty years ago and the impact on shopping behaviour is profound.
When people ask what is next for the United Kingdom, there are three aspects which will shape thinking in the country. Globally, the world is getting smaller and smaller whatever happens because of connectivity and communication technology. There is a rising battle for the hearts and minds of shoppers because as we’ve already mentioned, consumers are all powerful. The population is becoming more diverse so food producers for example have to cater for a greater variety of people in terms of culture than they would normally expect. It means catering for European, Asian, Indian, African etc. tastes.
The main challenges for the UK food industry
For the UK food industry there are a number of challenges which demand attention. In a general overall sense the world needs to enjoy sustainable global economic growth upon which countries like the UK can engage with. It also means balancing global economies to a greater extent than currently- those of the developed world need to engage with those that are developing such as China and India. They would argue the other way round as its we who are developing.
One of the main issues which is often discussed as a sole subject is meeting the needs of an ageing and diverse UK population.
We are also seeing positive changes in production and packaging of food which should help meet the global and demographic challenges. Along with this is a better supply chain for procuring new foods. The UK along with many countries is still seeing urbanisation which means that consumer expectations are changing. The final challenge is the change in the way we shop. The shopping infrastructure is altering with smaller stores appearing and a very rapid rise in on-line shopping which means that new distribution models need to be adopted and employed to meet the growing changes. An understanding of how and why the shopping behaviour of consumers is shifting, and an ability to adapt to these changes would appear to be an essential focus for serious players within the food industry.
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