Good food, crabs and lobsters

Today, many companies are suffering from sudden changes in consumer trends. After the “psychological end” of the pandemic, the market was completely domesticated. We are slowly adapting to new customs and a new balance between our professional responsibilities and personal life. At the center of all this is food, or, so to speak, our relationship with food.

Let’s take the example of the Quebec company Good Food. In 2021, the company recorded very good profits, reaching its peak, while its shares were worth more than $13 and membership was growing. The meal kit market in Canada was worth approximately $1.5 billion.

People were looking for a solution for eating at home, in full. Because the virtual food market was not yet sufficiently developed, as the main business model of the agri-food sector for several decades was based on the desire to invite consumers to have a unique experience, whether in a store or in a restaurant. Restaurants and meal kit providers had a monopoly on the Internet.

Now, just 12 months later, Good Food shares are trading around $0.60 (a penny stock), and the meal kit market has collapsed, worth just over $700 million in Canada, less than halfway through 2021. consumers’ pockets, every food dollar counts. Meal kits, that “IKEA” formula in food that allows you to “gather ingredients” at home, must be reinvented or adapted to a new market. The options available online are increasing almost every month. In most markets across Canada, someone can deliver your groceries within 60 minutes, and in some cases as little as 15 minutes. Expectations have changed tremendously, and so have our habits. In the United States, 16% of food products are now sold online. Before the pandemic, this percentage barely approached 7%. In Canada, we estimate this percentage has increased from 1.7% to 8% in two years. A spectacular jump.

Customer service is changing, and so are the products they consume. Snow crab and lobster are good examples. Prices for two of Canada’s most coveted seafood products have fallen sharply this year as consumers shrug off the effects of rising inflation and spend more time at home. The price of snow crab fell in 2022 by a little more than 60%, and the price of lobster fell by about 35%, while in 2021 it was a windfall. Then sales of crabs and lobsters reached a record 2.5 billion dollars. Consumers have been clamoring to recreate the restaurant experience at home during quarantine. This is a real change that is happening everywhere, not just in Canada.

Global financial uncertainty caused by Russia’s invasion of Ukraine, the end of economic stimulus packages in the West linked to COVID-19 and rising interest rates are prompting consumers to cross expensive seafood off their shopping lists. There was too much money in the economy for too long, and borrowing money was almost free for a decade. Younger generations will have to deal with the value of money and credit, perhaps for the first time in their lives.

Many foods that used to be eaten in restaurants, such as snow crab, are now shunned by a market that treats restaurants differently, either because of inflation or because demand is learning new, more domestic habits.

We expect other companies to feel the effects of the transition market. Post-COVID will be as brutal as the start of the pandemic, but the changes will have ramifications for several years. Few people know what form the food industry will take in a few years. But expect other casualties like good food, crabs and lobsters… the perils of the post-Covid market.

Sylvain Charlebois
Chief director
Laboratory of analytical sciences in agro-food
Dalhousie University
Halifax, Nova Scotia

Leave a Comment

Your email address will not be published. Required fields are marked *