Food and Drink Report 2021

In partnership with AWIN Global, we looked at key food and drink sector insights from 2020, and discussed how brands can use these learnings going into 2021.

Sector overview

The online food and drink sector has seen through growth in 2020 fuelled by the Covid-19 pandemic. New customers have flocked to order all types of groceries, specialised alcohols and subscription boxes. Many of us will be familiar with the pain of virtual queues to order weekly food shops with the large grocers during the first lockdown, but enjoyed the benefits of having our favourite local restaurants and bars starting to deliver takeaway. Insights from Google showed that 83% of US adults have changed how they get their food and what they eat, leading to 400% growth in searches for “dinner to go” YoY globally.

When looking at how this played out in the numbers, the below shows overall sales performance across Awin UK for the whole Food and Drinks sector by month from January to October 2020:

This shows the huge increase in demand from February to March peaking in April, and the increase again in October as further restrictions on the hospitality sector came into play.

Key stats

• 144% increase from February to April for the sector as a whole despite Valentine’s Day being a key peak for the Takeaway sector
• 34% jump in alcohol sales after the 10am closing rule for the hospitality sector
• Asda reported combined net sales for Asda.com and George.com increasing by 72% year-on-year in Q3 (DC Weekly)
• 53% is the proportion of Awin Grocery sector sales driven in September compared to April in the peak of lockdown
• 100% increase in the Wine and Spirits sector for Students YoY in Freshers months of August and September

A closer look

When taking a closer look at sub sectors within this overall category we can see each had different levers and therefore numbers at play:

Grocery witnessed incredibly high levels of demand, with Asda reporting combined net sales for Asda.com and George.com increasing by 72% year-on-year in Q3. However this led to many large grocers pulling back marketing spend across the year as they struggled to meet organic demand increases. As they look to re-invest in digital channels, focuses are moving to areas such as click and collect, and campaign tests such as in-store cashback. Many have also doubled down on delivery capacity which should put them in good stead for the future.

The Alcohol sector on Awin includes advertisers such as Majestic Wines, Drinks Supermarket, Brewdog and The Whisky Exchange. It was the speciality drinks brands that saw particular early surges in demand. General online Alcohol demand increased dramatically in March and continued to rise until June, dipping again over the summer before spiking again with the introduction of the 10am closing rules for bars and restaurants:

When looking at how this early closing impacted sales in more detail, on Friday 25th September (the day after UK pubs first closed at 10pm) was +34% compared to the week before.

We had a number of new advertisers join the network in the Subscriptions and gourmet food sector which saw particular spikes in early lockdown.

Takeaway volumes regularly surpassed peak Valentine’s Day volumes in key weekends during the 2020 lockdowns. There are more chain restaurants are now available through services such as Just Eat (such as McDonalds and Pret) whose popularity and consistency of offering are further driving up takeaway demand.

Publisher insights

Cashback, loyalty, Discount code and Subnetworks are the key volumes drivers in this sector, however the below bar chart shows the growth we have seen from comparison engines, editorial content and social content in 2020:

Key content sites within the online alcohol sector include https://www.bigbaldreviews.co.uk/, http://www.thedrinkscabinet.co.uk/, https://www.ladbible.com/, https://www.shortlist.com/.

Key learnings

The key learnings from 2020 are that the food and drinks brands who were able to react quickly, pivot and adapt to the sudden shift to online demand were the ones who were able to benefit the most. The second lockdown of 2020 saw many smaller and local food suppliers take advantage of this online demand, when they weren’t logistically ready the first time around. More and more consumers are looking to support local brands – so consider highlighting locally sourced ingredients, or leveraging smaller regional publishers to engage these audiences.

The core focus for 2021 needs to be how brands in this sector can now retain these customers, and demonstrate the value of the online experience. Many brands have had to pause digital activity to manage capacity and demand levels, so must work to reaffirm brand positioning in the affiliate space and elevate USPs to win back potential loss of market share.

Winning back lapsed customers will be important, but then a key focus must be around how brands can reward existing customers and keep them loyal – using cashback and loyalty publishers to offer added value after a certain number of shops or the first month of subscribing could work well here.

Similarly, brands that gained momentum during lockdown will need to consider how to retain that momentum, for example at home food and alcohol services that thrived when pubs and restaurants were shut. Consumers will likely continue to capitalise on the convenience that home delivery offerings such as subscription boxes can provide. However, we’re likely to see increased competition and interest in this vertical, so subscription brands will need to be reactive in keeping up with the competition on key publisher sites.

2021 trends

Globally, we’ve seen increased focus on sustainability. The lack of stock in 2020 forced consumers to think about how much food they were consuming and wasting, propelling food waste and sustainability into the mainstream.

As a result, customer interest in sustainable living grew significantly, with many consumers looking to reduce food waste, buy products with sustainable packaging, and buy from brands that clearly outlined and stood by their ethics. Brands that show their support for sustainability will benefit going into 2021 as consumers look to keep up these more environmentally-friendly habits.

With so many sustainability-focused partners entering the affiliate space, brands should focus on working with partners that can build on this messaging. For example, content partners and influencers can be used to raise awareness of a brand’s sustainable approach. Rewards-based partners with a sustainable focus can also be key here, for example partners that offer consumers reward points for actions that reduce carbon footprint, or partners that plant a tree when a customer shops with certain retailers.

Online grocery sales are likely to continue to grow as shown by Awin’s performance results – more and more consumers will continue to shop online, so food brands must be aware that this trend is ongoing. Digital transformation has certainly sped up within the food sector – brands must continue to develop digitally in 2021. If they aren’t maximising on the affiliate channel to reach new audiences, they risk a real loss of market share to their competitors

We’re likely to see growth in online to offline partnerships, with brands utilising publishers to send tailored and personalised publishers to in-store shoppers – therefore blurring the gap we have seen previously between online and offline. We’ll see a much more holistic approach when it comes to online and offline promotion of food and alcohol.

---