Market Analysis - Food Technology-2017
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Modern day lifestyle relies heavily on services which helps saving time and offers convenience simultaneously. While technology giants such as Uber are letting the urban population commute at reasonable prices and increased convenience, the online segment of the food and FMCG industry draws a similar parallel. The trends of buying groceries and food delivery have transformed profoundly, particularly in the ways famous restaurants and food chains are generating revenue. Identifying with the current demand of the working population, companies across the globe are relentlessly putting in efforts to stir the otherwise stagnating food and FMCG industry. While displaying advertisements on food ordering grocery apps is an upcoming viable revenue generation mode, transactional fee on ordering food online through famous restaurants continue to be a stable business model for the market players.
Rapid adoption of e-commerce, growing internet and smartphone penetration, and ease of placing ordering are some of the factors responsible for the growth of this market. However, the market consists of certain challenges as well which are inhibiting the overall growth for the market, such as week business models, financial pressure, and intense competition scenario.
The concept of food tech market revolves around the types of services the market players provide. These services are online grocery delivery companies, online food aggregators, and Over the Top (OTT) & convenience service provider. Online food aggregators are dominating the market, however, the OTT& convenience service are estimated to grow at the highest CAGR since a small yet growing population segment have been identified to show inclination towards famous chefs and restaurants which they can find through such services for dine-in.
The food tech market is one of the major beneficiaries of the boom in the digital technology in the last decade. The services in the food tech market can be availed by the users through websites or mobile applications. The most commonly used technology i.e. websites is generating the maximum revenue in 2015. The alternate technology i.e. mobile apps, is expected to grow at the highest rate. Ordering food through individual food chains’ website is losing its hype to mobile apps, largely propelled by the emergence of platforms such as Food Panda.
The trend of food delivery and grocery delivery varies with the geographical regions. The market is dominated by North America due to the increasing per capita income, rising smartphone and internet penetration in the country. However, it is expected that Asia-Pacific (APAC) will grow at the highest CAGR through 2015 to 2022. Europe, with the U.K. leading, will also continue to generate significant revenue through the forecast period.
The competitive landscape for the food tech farming market demonstrates an inclination of companies adopting strategies such as collaborations, product launches, mergers, and contracts among others. GrubHub Inc., Tesco PLC, Domino’s Pizza Inc., Pizza Hut International, and Sainsbury were the most prominent names that surfaced in 2015.
The companies offering their services in the market should progress in coordination with the changing food industry trends. Keeping abreast with popular food demands at regional levels and ensuring inventory of bestselling products is an imperative requirement for a smooth functioning and unrestricted growth of the food tech industry.
The food tech market encompasses the online food and grocery ordering and delivery ecosystem, primarily the online grocery delivery companies (such as Tesco PLC, Sainsbury), online food aggregators (such as Grub Hub Inc., Domino’s Pizza Inc.), and Over the Top (OTT) & convenience service provider (such as Zomato, Book a Table). The market is expected to progress to a substantial extent since the target customers are the convenience seeking global population. The global food tech market is expected to grow over $250.43 billion by 2022 at a single digit CAGR through the forecast period.