COVID-19: E-commerce and private label on rise as industry prepares for second wave

05 Oct 2020 --- The nutrition industry is bracing for the effects of a second COVID-19 wave as many countries are witnessing a resurgence in cases. NutritionInsight speaks with key companies about how consumer demands have evolved since the virus first reared its head, and what lessons can be learned from the earlier stages of the outbreak.

“As a potential second wave approaches, we don’t expect the same level of consumer stockpiling of products as we saw when the pandemic first started,” says Megan DeStefano, marketing director for probiotics, fibers and HMOs at DuPont Nutrition & Biosciences. 

DuPont’s data indicates there may be a second peak of higher buying patterns, but that it will not be as large as it was in spring. 

DeStefano believes that consumers understand what to expect and may feel less concerned about how much supplies they will need in their homes at any one time. 

Additionally, consumers have likely continued to buy certain products at higher rates during this pandemic and, therefore, may have more supplies already stocked in their homes.

Meanwhile, there is also a shift in consumer spending. “While more shoppers are investing in health and wellness products, an overall shift toward trade-down and value-based shopping is occurring in other product areas,” says Ana Ferrell, vice-president and head of marketing, ADM North America.

As consumers watch their spending, often choosing less expensive brands, private label products are benefiting. ADM research shows that 41 percent of consumers will continue to buy private label products after the pandemic.

On the hunt for wellness
Unsurprisingly, the COVID-19 pandemic has created an emphasis on health and wellness, accelerating the demand for products – food and supplements – that meet these needs. 

ADM has found that 31 percent of consumers are already purchasing more items tailored for health and nutrition, and 48 percent of consumers are planning to purchase more items related to health and wellness in the next six months and beyond.

“We foresee this focus continuing, especially as it relates to concerns around immune function support,” adds Ferrell. 

DeStefano adds that more consumers are seeking immune support as an important benefit of supplements, foods, and beverages than in prior years. This includes a growing focus on probiotics as a key ingredient for immune health benefits.

Dominik Mattern, vice-president of marketing at Kappa Bioscience, has observed an “overwhelming” demand for immunity products containing vitamin D3 but also omega 3s, vitamin C and vitamin K2.

In particular, the synergistic benefits of vitamin D3 and K2 have been driving recent popularity. “There is no doubt this will continue as recent research shows interesting evidence of the importance of good levels of both D3 and K2 for COVID-19,” Mattern highlights.More consumers are seeking immune support than in previous years.

Mushrooms shooting up
Eric Puro, CEO of Kääpä Biotech, reports that the mycological specialist has seen a 400 percent increase in sales from COVID-19. He points to some studies showing that medicinal mushrooms may help improve immunity and protect cells from invasion from viruses. 

“I see our fungi becoming more and more important to the food supplement industry as people become more aware,” he says. This has been reflected by flourishing NPD. 

Last week, the company responded to rising North American demands with a distribution agreement with Nutralliance. 

E-commerce takes off
Another shift is identified by Douglas Jones, global sales and marketing manager of BioCell Technology. He observes that the skincare sector has been impacted by the closures of spas and treatment centers. As a result, there has been an increase in in-home use, with many consumers creating their own “spa days.” 

In tandem, there is growth in beauty-from-within products. These rising demands have also led e-commerce to become even more widespread, notes Jones. 

DeStefano also flags the rise of e-commerce as a major result of the pandemic. “We expect this will continue in the short-term because consumers are limiting the number of stores they visit and in-person shopping trips they conduct each week.” 

She also notes the long-term viability thanks to the convenience of shopping online. This is especially true in categories like supplements where a monthly subscription may be appealing to consumers.The pandemic has accelerated the rise of e-commerce. 

Lessons learned
It has now been six months since the World Health Organization first declared COVID-19 to be a pandemic. In that time, there have been few companies that remained untouched by the disruptions throughout the world. 

Supply and delivery was a major stress-point for many businesses as people’s movement was restricted during lockdowns, notes Mattern. 

“The Kappa Bioscience team was well-prepared, and our patented production process enables quick scalability,” he flags. 

DeStefano remarks that DuPont was able to work through the challenges in spring despite major consumer stockpiling that stressed supply chains. “We are now even better prepared to handle demand spikes in the future.”

Kääpä Biotech’s biggest issue was also supply. The company is now working on future investment rounds and scaling its business.

Jones notes that BioCell Technology’s supply chain is strong and secure. The company only sources its raw materials from the US and Europe. “In that regard, we’re not reliant on other countries. Some of these areas had more restrictive lockdowns, and the supply chains were really disrupted,” he adds.

As ADM prepares for the pandemic to continue into 2021, it is tracking consumer insights to help inform smart innovation strategies moving forward. 

“We combine ongoing trend mapping with ADM OutsideVoice proprietary consumer research to better understand how lifestyle, life stage and environmental factors influence current consumer motivations. This approach remains a guiding light for how we will continue forward,” concludes Ferrell. 

Throughout the pandemic, NutritionInsight is updating its COVID-19 news feed with the latest information and insights relevant to industry. 

By Katherine Durrell