Why ECommerce Sales Are Expected To Grow

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Although eCommerce may not be for all dairy processors, it can definitely be an option for additional revenues. Gone are the days when consumers were hesitant about purchasing food and beverages on the internet, a move certainly facilitated by the COVID-19 pandemic.

In fact, Euromonitor International reported the number of Americans utilizing online grocery services skyrocketed from 13% before the pandemic to some 26% in 2022. According to several reports, the increase in smartphone usage is driving eCommerce sales higher.

Marketing Charts data is similar, stating some 28% of respondents in 2022 reported ordering groceries online for pickup or delivery at least once a month, up from 23% the prior year. The research firm adds that online grocery shopping is more common among higher-income than lower-income households: 37% of respondents with annual household income (HHI) of at least $100,000 reported doing so at least monthly, about twice the proportion of those with annual HHI of less than $40,000 (19%).

Food ⁘ Beverage (F⁘B) CPG (consumer packaged goods) eCommerce sales reached $75.1B in 2023, and in the latest 52 weeks ending Aug. 11, they've reached $80.1 billion, states Chicago-based market research firm Circana. This represents 9.2% and 9.6% of Total Omnichannel sales, respectively, up from 7.4% in 2021. 

When specifically examining dairy, during the 52-week period ending Aug. 11, Circana has seen the greatest eCommerce growth in cottage cheese (+33%), whipped toppings-refrigerated (+26%) and creams/creamers (+23%). Meanwhile, slower eCommerce growth categories include margarine/spreads, up 8% and plant-based milk, up 1%. However, Circana notes the slower growth categories likely follow general industry trends and "ecommerce is not necessarily a barrier for these categories' eCommerce opportunities."

For dairy processors, one of the most obvious eCommerce obstacles is delivery costs. Shipping a product that either requires refrigeration or being frozen can certainly be pricey. Hence, it is not for everyone.