FILIPINOS' growing preference for e-commerce for their food supply needs will drive the sales of food and drink sold online this year to expand by 30 percent to reach a record-high of $280 million, according to a report.

A Global Agricultural Information Network (Gain) report projected that food and drink e-commerce sales this year would increase by $64 million from last year's $216 million.

The Gain report pointed out that "major market share shifts" within the country's food and beverage retail sector are continuing to "develop and solidify" as a consequence of the Covid-19 pandemic.

The Gain report was prepared by the United States Department of Agriculture-Foreign Agricultural Service in Manila (USDA-FAS Manila)

One of the major shifts seen in the domestic industry is the rise of e-commerce as "companies are increasingly harnessing sales through online services offered from websites and mobile applications," according to the report.

"While consumers initially turned to E-commerce for continued access to products and as a safety measure against Covid-19, it is likely to remain an increasingly preferred option post-pandemic," the report said.

"While still only accounting for a miniscule portion of the market, E-commerce of food and beverages increased 210 percent last year, and Post [USDA-FAS Manila] estimates 30 percent growth in 2021," the report added.

Citing data from Euromonitor International, the USDA-FAS Manila said food and drink e-commerce in the Philippines more than tripled to $216 million last year from $70 million in 2019.

The report noted that some of the websites and mobile applications that Filipinos use for buying their food supply online are Lazada, Shopee, GrabMart, and Metromart as well as community groups in Viber, Facebook Messenger and Telegram.

Another major market shift in the domestic food and beverage industry pointed out by the USDA-FAS Manila is the Filipinos's growing preference for hypermarkets, convenience stores, warehouse clubs and supermarkets over traditional retailers, which are mostly sari-sari stores, due to stable supply, safety and convenience.

"Specifically, FAS Manila sees hypermarkets, convenience stores, warehouse clubs, and supermarkets all growing at a double-digit pace and more than offsetting further expected declines in traditional retail," it said.

The Gain report explained that traditional retailers "have struggled mightily under Covid-19" due to supply chain problems and reduction in foot traffic. Worse, Filipino consumers have shifted habits.

"Traditional retailers historically offered an advantage by covering both cities and remote areas, though consumer habits have shifted away from them in favor of options offering more dependable supply, safety, and convenience," it added.

The Gain report said Filipino consumers "continue to pantry-load to avoid frequent visits to buy groceries while some concerns of supply shortages in particular products persist."

The Gain report added that food and beverage retailers are "increasingly offering premium selections to satisfy consumer demand" as Filipino consumers continue to avoid and/or be restricted from enjoying food services like dine-in.

The Gain report also noted that home cooking and baking remain popular during the Covid-19 pandemic. The Gain report added that modern retailers continue to expand in new areas and cities and provinces while providing extended delivery services, personal shoppers as well as offering more payment channels, which are mostly online.

"Meanwhile, some retailers, especially convenience stores located nearby offices and schools, have continued to experience a decline in sales from ongoing Covid-19 restrictions," it said.

Overall, the USDA-FAS Manila projected that total food and beverage retail sales this year would grow by 10 percent to $28.6 billion from $26 billion last year.

"With the continued plight of the food service sector, retail sales are expected to remain strong," it said.

Read full article on BusinessMirror