PACKAGED FOOD IN THE PHILIPPINES - ANALYSIS

Country Report | Feb 2021

EXECUTIVE SUMMARY Market Sizes

COVID-19 impact on packaged food Sales of Packaged Food
Retail Value RSP - PHP million - Current - 2006-2025
An initial 2-month nationwide lockdown announced from March 2020 by the
government in an attempt to control the spread of COVID-19 in the Philippines resulted
in early stockpiling tendencies amongst many local consumers who were concerned 733,742 Forecast
about essential staple foods being out of stock in grocery retailers. This trend is set to 1,000,000
drive growth for a number of categories within packaged food in 2020 compared to 2019
due to the home seclusion trend (with many Filipinos working and studying from
home) and a shift in channels away from foodservice as horeca outlets were only 800,000
permitted to offer takeaway or delivery options and towards retail. However, with
increasing price sensitivity amongst Filipinos during an unstable period, consumer
preferences for premium options waned due to rising unemployment and a greater 600,000
switch to cheaper packaged food products including private label, tempering any
significant rises in average unit prices. Price sensitivity also resulted in a rising
preference for larger package sizes in a move away from the previous trend for single 400,000
or smaller packs. Bulk packaging is perceived to be more economical while enabling
consumers to stockpile and therefore reduce their visits to grocery retailers due to
caution about coming into contact with others in public spaces, and therefore the virus. 200,000

Rice is one of the categories set to benefit from stockpiling and the home seclusion
trend in 2020 as it is a staple part of the Filipino diet. Concerns relating to the virus and 0
contamination also resulted in a notable switch away from unpackaged rice which 2006 2020 2025
offers greater affordability to the masses in favour of packaged varieties due to the
latter’s perception of being more hygienic, a trend however, which was likely to be
driven by more affluent consumers who could afford to upgrade. A shift towards e- Sales Performance of Packaged Food
commerce in terms of purchasing packaged food by the latter group is also helping to % Y-O-Y Retail Value RSP Growth 2006-2025
drive demand for packaged rice, as unpackaged variants tend to be purchased from rice
traders, wet markets or small neighbourhood stores.
Instant noodle cups is another staple food type to benefit from stockpiling during the
9.2% Forecast
10%
initial lockdown, although its convenience in terms of preparation, long shelf life and
time-saving is likely to continue over the year. With many consumers experiencing
decreasing purchasing power or unemployment, instant noodles in general offers a 8%
practical meal or snack solution. Heightened awareness of the need to boost one’s
immune system with the virus rapidly circulating also had a notable early impact on
drinking yoghurt in the country with limited availability of sour milk products. This was 6%
mainly driven by probiotic variants as offered by dominant brand Yakult due to its
claims of enhancing gut health and therefore supporting the body’s immune system.
This resulted in some grocery retailers imposing limits on the number of packs of Yakult 4%
that consumers could purchase during the lockdown due to some stockpiling. However,
while some Filipinos consumed the product themselves, others were attempting to
purchase in bulk in order to resell at a higher price. 2%

COVID-19 country impact

0%
The emergence of COVID-19 in the Philippines forced the local government to initially 2006 2020 2025
introduce a nationwide lockdown between 12 March and 15 May, in an attempt to
control the spread of the virus, although some provinces without COVID-19 cases were
able to operate under differing local community quarantine regulations. The national
regulations called for only one person being allowed to leave the home to buy food or
medicines between 06.00hrs and 11.00hrs or between 15.00hrs and 18.00hrs. All non-
essential establishments were closed, with only supermarkets and markets open for
food in retail, and foodservice outlets allowed to offer only takeaway and delivery
services. The operating hours of essential stores varied in different locations according
to the lockdown measures implemented by their local authorities. Schools in the
country were shut and public gatherings were prohibited. The national government
also declared a state of calamity throughout the Philippines on 16 March, which
implemented price controls on basic commodities, granted interest-free loans,
distributed calamity funds and offered a hazard allowance for public health workers,
amongst others. Whilst the government gradually started to relax the rules from 1 May,
it was then forced to reintroduce lockdowns in some parts of the country, including
Manila and surrounding districts, in early August due to fast-rising case numbers.
Travel of foreign nationals to the Philippines was banned by the government from 16
March 2020, with all visas for foreigners still suspended at the time of writing this
report. However, there were some exceptions, such as the family of Filipino citizens
and workers for international organisations and non-governmental organisations
accredited in the Philippines. However, even these travellers had to produce a health

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certificate proving they had tested negative for COVID-19 or quarantine for 14 days on Competitive Landscape
arrival at their own expense. Local airlines suspended flights in response to this travel
ban, although some routes had already been suspected in February by airlines, such as
to China, which was where the virus first emerged. Only essential outbound travel is Company Shares of Packaged Food
allowed by Filipino citizens, whilst after an initial ban travel is now allowed within % Share (NBO) - Retail Value RSP - 2020
regions and between certain regions, with domestic flights operational from June.
Universal Robina Corp 7.9%
Although by the middle of the year locals were not yet travelling for leisure purposes,
this is expected to be allowed and promote growth towards the end of the year. Nestlé Philippines Inc 7.0%

Six months after tough restrictions were introduced to curb the spread of the virus - Monde Nissin Corp 5.5%
including stay-at-home orders, travel bans and no talking on buses and trains - Purefoods-Hormel Co Inc,... 5.2%
infections had continued to rise daily in October. It is now compulsory to wear both
San Pablo Mfg Corp 3.3%
masks and plastic shields in indoor public spaces and on public transport to curb the
spread of the coronavirus. Various lockdown measures in certain areas with high virus Magnolia Inc 3.1%
levels are now being implemented through to the end of the year. Alaska Milk Corp 2.9%
Mead Johnson Philippines... 2.9%
Company response
International Oil Factor... 2.8%
Packaged food in the Philippines is a highly fragmented competitive landscape with
Universal Robina Corp set to retain its slim overall lead in 2020 due to its strength in Unilever Foods Philippin... 2.8%
snacks where it offers a wide product portfolio under its umbrella brand Jack ‘n’ Jill. CDO Foodsphere Inc 2.5%
The increasing shift towards e-commerce during the pandemic encouraged the leader
Century Pacific Food Inc 2.4%
to open an official store on third party platform Lazada in 2020, while it also utilised a
roving food truck called URCommunity Mart to sell its various brands, such as Payless, Unilever RFM Ice Cream I... 2.0%
Magic Flakes and Cloud 9. The food truck drove around different cities in Metro Manila Mondelez Philippines Inc 1.9%
from June to September 2020. Consumers had the option to buy bundle packs which
offered cost savings of up to PHP76.00. Unilever was another major player to launch an SM Retail Inc 1.8%
online store called UStore where consumers have the option or purchasing a variety of Yakult Philippines Inc 1.8%
its brands, while also allowing Filipinos to apply to be a “community seller” via its
Del Monte Philippines In... 1.5%
website. This enables customers to sell Unilever’s brands in their immediate
neighbourhood or invite representatives of the company to sell locally in the Artisanal 3.2%
community on a certain market day to extend its reach. Other Private Label 0.2%
Like Universal Robina Corp and Unilever, a number of other players looked to increase Others 39.3%
their presence online including San Miguel Corp which launched its own site with click-
and-collect options made possible with the collaboration of forecourt retailer Petron
Treats, in addition to launching rolling stores in the form of vans located at Petron
petrol stations.
Brand Shares of Packaged Food
The home seclusion trend which resulted in a greater uptake of home cooking in the % Share (LBN) - Retail Value RSP - 2020
Philippines, particularly during the initial lockdown earlier in 2020, encouraged a
number of major players such as Unilever Foods (through its Knorr brand), and Nestlé Jack 'n' Jill 5.9%
Philippines to utilise a number of different promotional strategies to attract
Purefoods 5.2%
consumers’ attention. Knorr for instance, launched a chatbot via Facebook Messenger
called “Norie” in Q2 2020 which offered consumers assistance with meal planning for Lucky Me 3.6%
home cooking including finding recipes which could help them to create a weekly meal Minola 3.3%
plan. Its daily “Featured Recipe” was created to ease the burden and monotony of
having to decide what to cook, while also adding ingredients, including those offered Baguio 2.8%
by Knorr, needed for a particular recipe to the consumers’ grocery list. Initial panic Bear Brand 2.7%
buying supported sales for Nestlé in March and April and led to shortages for some of
its brands, encouraging the player to increase its production in the May. On the other Alaska 2.5%
hand, it remained aware that growing price sensitivity and decreasing disposable CDO 2.1%
incomes may need to be addressed by considering offering free packs with certain
Knorr 1.8%
products to attract consumers and sustain demand.
SM Bonus 1.8%
Retailing shift Yakult 1.8%

Modern grocery retailers, including supermarkets and hypermarkets, is set to increase Lactum 1.6%
its dominance of distribution in 2020, as an increasing number of consumers purchased Del Monte 1.4%
larger pack sizes and bigger volumes, particularly during the initial lockdown due to
stockpiling and concerns about frequently visiting public spaces with the virus in Gardenia 1.4%
circulation. The smaller channel of convenience stores on the other hand, is set to Magnolia 1.3%
record slower growth and loss of value share in 2020 as it has been unable to benefit
Selecta 1.3%
from strategic locations which would normally enjoy high footfall as consumers
reduced the frequency of their shopping trips. Nevertheless, a number of convenience Payless 1.3%
stores adopted different strategies to address falling demand; FamilyMart for instance, Artisanal 3.2%
launched “Fam on Wheels”, a rolling store truck which sells amongst other items,
packaged food including staples such as instant noodles and rice, in addition to various Other Private Label 0.2%
snacks, on the forecourt of some Phoenix petrol stations in Metro Manila in April 2020, Others 55.0%
in an effort to bring its products closer to consumers who were unable to venture far.
5-Year Trend
7-Eleven had also noted falling sales during the lockdown with 22% of its outlets forced Increasing share Decreasing share No change
to close due to low sales and staffing issues relating to the suspension of public
transport. The player therefore looked to other avenues of growth including partnering
online platform FoodPanda as an increasing number of consumers, particularly those
from mid- to high-income groups, switched to e-commerce to purchase grocery orders
through this channel through lockdown. However, even as restrictions were gradually
lifted, some households continued to place online orders as they continued to err on
the side of caution with the virus still in circulation, in addition to enjoying the benefits
of competitive prices, home delivery or flexible click-and-collect options. This also
benefited the likes of third party platforms such as Lazada, which reported increasing
demand for grocery delivery services, by as much as up to 15 times the normal level
during lockdown in areas such as Luzon. Grab on the other hand, expanded its

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GrabMarket service within Metro Manila by increasing its merchant partnerships with
new supermarkets such as Ultramega and Fisher Supermarket.

Foodservice vs retail split

Despite being permitted to offer takeaway and home delivery during the initial
lockdown, foodservice sales for packaged food are set to experience significant
declines during 2020, as horeca outlets were forced to close their dine-in options
earlier in the year. Even as lockdown restrictions were relaxed, some businesses were
unable to cope with the reduced footfall for several months resulting in permanent
closure, while others continued to suffer from lower sales due to new policies imposed
on foodservice to adhere to social distancing measures which reduced their overall
seating capacity. This trend is expected to influence the channel’s overall performance
in 2020, while enhancing retail sales of packaged food as consumers spent longer
periods of time at home and became used to preparing their own meals. Nevertheless,
a number of foodservice operators partnered convenience stores such as FamilyMart.
The latter formed a partnership with Max’s Corner Bakery (linked to well-known
chained full-service restaurant Max) to sell some of its products through its outlets.
Others chose to be more creative by launching their own meal kits to consumers and
allowing Filipinos to re-create the experience of dinner in their restaurants, from
home. Examples include Ramen brand, Mendokoro Ramenba, which started selling
take-home ramen kits.

What next for packaged food?

Packaged food is expected to continue to benefit from the home cooking trend and an
aversion to dining out as frequently due to ongoing concerns about the threat level of
the virus in circulation and price sensitivity, heading into 2021. Nevertheless, as
Filipinos gradually return to their daily routines, they are expected to have less time to
dedicate to preparing meals from scratch as they did during the lockdown, which is
predicted to drive demand for greater convenience, whilst still adhering to emerging
health and wellness trends. This trend is set to support demand for frozen ready meals
as product and brand options continue to improve over the forecast period, with The
Purefoods-Hormel Co Inc likely to expand its offering once the second phase of its new
manufacturing plant becomes operational in 2024. It is also possible that some
foodservice players (including convenience stores which offer foodservice) will sell
packaged frozen ready meals as an additional revenue stream heading into the forecast
period, as witnessed in 2020 with some Filipinos already enjoying restaurant-supplied
dinner mixes, a trend which could drive demand for meal kits over the forecast period
and provide further convenience in terms of meal preparation.
Following a boost to sales during 2020 with consumers panic-buying immune-boosting
probiotic drinking yoghurt due to COVID-19, this mature category is set to experience a
slowdown in demand heading into 2021. Nevertheless, as consumers gradually return
to their daily routines, depending on the threat level of the virus and any further
lockdown measures, busy Filipinos are more likely to turn to impulse purchases of
these products through convenience stores as a quick snack or breakfast substitute.
However, the nascent foodservice channel of street stalls/kiosks has the potential to
offer competition to impulse purchases through retail. On the other hand, staple items
for many Filipino households, such as rice and noodles, are expected to continue
performing well over the forecast period. Rice will be supported by a further shift
towards packaged varieties with greater awareness of hygiene and sanitation since the
emergence of the pandemic, which is likely to influence the purchasing decisions of
mid- to higher-income consumers in particular as they move away from unpackaged
options. Instant noodles is likely to benefit from ongoing price sensitivity amongst
lower-income Filipinos heading into the forecast period, with these products offering a
convenient and affordable snack or meal option.
A number of opportunities for players to explore emerged during the pandemic and
could be further developed; for instance, rising unemployment levels in 2020 is
resulting in small scale entrepreneurs eager to set up their own small eateries or food
stalls as a way to earn income. Companies which are able to produce bulk packaging
which would provide significant cost-savings for an individual are likely to be well
received. Community selling was another trend to emerge in 2020, with individuals
becoming sellers of different brands within their own neighbourhoods. This has the
potential to open up direct selling as a new distribution channel for players over the
forecast period, allowing them to improve the distribution of their products and
expand their consumer reach. It is also likely to be an attractive alternative channel for
some consumers who personally know and trust the sellers, while not having to pay
delivery fees from grocery retailers offering online services.

FOODSERVICE
Sales to Foodservice
Pork-related items already off menus heading into 2020 due to negative media reports
surrounding African Swine Fever

Heading into 2020, sales of processed red meat in different formats were already
slowing following the adverse impact of African Swine Fever (ASF) which hit the
country towards the end of 2019. Although ASF was not believed to have posed a threat
to human health, it still generated fear amongst local consumers and therefore demand

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for pork and pork-related dishes declined as Filipinos shifted their preferences to
alternative sources of protein including beef and chicken when dining out. In addition,
manufacturers also had to contend with a distribution ban on pork and pork-related
products to foodservice by some local governments in an attempt to stop the spread of
ASF, which is believed to have originated in the Luzon region. This resulted in some
manufacturers significantly having to reduce their production of processed pork, while
fast food outlets in areas such as Cebu City refused to offer pork-related items on their
menus following the issuing of a 100-day ban on the entry of live pigs and pork-related
products or by-products. Pork was also removed from the menu of all outlets of
Chowking located in the southern part of the Luzon region. Although as a topic of focus,
the issue was eventually overtaken by the emergence of COVID-19 in early 2020, it had
not been entirely eradicated. As a result, demand for processed red meat by
foodservice outlets is likely to continue to be impacted over the year by lingering
concerns relating to pork.
This scenario could also drive the greater interest in meat substitutes through
foodservice in the Philippines with international company Beyond Meat already
launching its plant-based meat substitutes in the country in 2020 with its burgers and
sausages distributed by Pristine Solutions to a number of hotels and restaurants prior
to the emergence of the pandemic. Meat substitutes are set to gain further traction
through retail in 2020 in line with a rising interest in vegan or flexitarian diets driven by
health and environmental consciousness. Growing concerns and negative media
reports relating to meat production could help to support further demand for meat
substitutes through foodservice operators as horeca outlets gradually reopen as
lockdown measures are relaxed.

Unilever Food Solutions suffers significant drop in demand through foodservice by June 2020

Unilever Food Solutions (UFS) is among the major suppliers of packaged food to
foodservice in the Philippines, with the company forming a partnership in 2020 with
Carousell, the Southeast Asian online marketplace to support the initiative
#SupportLocal. This initiative was also implemented in a number of different countries
including Singapore, Malaysia, and Vietnam. By being listed on the newly-created
category of local producers on Carousell’s website for free, UFS has been able to help a
vast number of food and beverage companies in Southeast Asia to connect with and
reach local consumers. UFS has also provided other forms of support for horeca outlets
including recipes, advice and training via video on food delivery and social media
photography in order for outlets to attract customers and maintain contact during a
difficult period for foodservice players. The website also enabled potential customers
to find restaurants or street vendors located near them which offered collection or self-
arranged delivery services.
However, in line with foodservice closures and reduced footfall during the lockdown,
Unilever Food Solutions struggled from Q2 2020 with its sales to foodservice declining
by approximately 25-30% by the June, as demand shifted to retail with consumers
confined to their homes for several months. Despite permissible options of takeaway
or delivery services, the revenue generated by the player through foodservice was not
enough to compensate for the overall lower footfall and therefore demand for its
products from horeca outlets. This scenario was likely to have similarly impacted all
providers of packaged food to foodservice, at the very least, during the first half of the
year.

Despite relaxing of lockdown measures reduced capacity and footfall heavily impacts foodservice,
and therefore demand for packaged food through this channel

Foodservice is predicted to experience significant declines in 2020 due to the

emergence of COVID-19 and subsequent lockdown, despite home delivery and
takeaway options, therefore also negatively impacting demand from packaged food
operators that normally distribute to this channel. Even as restrictions were gradually
lifted, price sensitivity amongst local consumers and lower footfall for several months
forced some horeca outlets to close, immediately reducing the distribution scope for
packaged food providers. In addition, with social distance measures in place,
foodservice outlets had to drastically reduce their dine-in capacity to ensure that they
were adhering to strict rules. This also impacted self-service and buffet areas of outlets
due to the risk of spreading the virus, and therefore also reducing demand for
condiments as these are normally located in shared spaces where contact with others
or contamination is more likely. The number of consumer foodservice outlets is
therefore predicted to see a significant drop in 2020, a figure which is unlikely to
recover until 2023. It will also be a factor that will ultimately impact demand for
packaged food through this channel in the short term.

Consumer Foodservice
Consumer foodservice players forced to adapt to drastic declines in footfall during lockdown and
beyond

Prior to the emergence of COVID-19, consumer foodservice had been experiencing a

gradual path to recovery following challenging economic conditions in 2018. This
scenario resulted in a steady rise in the number of consumer foodservice outlets in
2019, with notable growth in limited-service restaurants due to the popularity of fast
food giants such as Jollibee and McDonald’s which tend to attract the larger low- to
mid-income population. However, the pandemic and subsequent lockdown measures
introduced in early 2020 in an effort by the government to control the spread of the

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virus had a devastating impact on consumer foodservice with dine-in options banned,
leaving only limited takeaway and delivery options, a policy which better suited
established players such as Jollibee with the latter also offering a drive-thru option.
While this scenario is set to result in significant declines in terms of demand through
foodservice in 2020 and likely to lead to permanent closures for some players which
continued to struggle with reduced footfall even after the lockdown measures began to
relax because of reduced capacity in line with social distancing measures, others
looked to adapt to the situation and find creative ways to continue to support revenue
including providing prepared meals to be sold through retail. This option was explored
by Jollibee which sold its popular product Chickenjoy marinated and frozen in a ready-
to-cook option through selected Robinsons Supermarket outlets and Shopwise
hypermarkets in Metro Manila. Robinsons Supermarket was also the chosen retailer for
distributing frozen, ready-to-cook options for Man Inasal chicken products. This
strategy was similarly adopted by a number of other players with Rustan’s Supermarket
and Wellcome proving popular retailers to distribute products offered by foodservice
players such as Chowking, which sold ready-to-cook, marinated Chinese Style Fried
Chicken, and Greenwich which also sold its Marinated Frozen Chicken Cut-Ups.
Chained street stall/kiosk brand Potato Corner, on the other hand, gave consumers the
option of making their own flavoured French fries at home by selling its products
frozen with a pack of powdered flavouring including cheese and BBQ, as a delivery
option. For a limited time, Potato Corner also partnered Serenitea with a “Serenitea DIY
Home Kit” which consisted of the French fries and popular milk tea which were sold at
two of Serenitea’s outlets. During the pandemic, community selling emerged as a trend
to bring brands closer to their target audience while providing individuals with an
employment opportunity; Potato Corner also adopted this strategy by recruiting a team
of “Special Forces Home Army” which helped to deliver the products to a wider
audience in consumers’ local neighbourhoods.

Meal kits prove popular option for at-home preparation during pandemic

In addition to selling prepared ready-to-cook packaged food to consumers through

retail, some foodservice players took a slightly different approach by creating meal kits
or deconstructed versions of food which they would normally offer on their menus.
This offered consumers the opportunity to recreate their favourite foodservice meals
whilst still being involved in the process at home. Mendokoro Ramenba, a popular
Ramen outlet located in Metro Manila and previously had no takeaway policy,
announced on its Facebook page in April 2020 that it would start selling take-home
ramen kits which included a pack of frozen broth, ramen noodles, condiments, and
roasted pork belly. The kits were available for collection from its Makati branch while
also offering delivery to selected areas. This was a strategy also adopted by Hokkaido
Ramen Santouka, which offered ramen kits consisting of ramen noodles, charsiu or
toroniku, vegetables, Santouka broth and its Naruto secret sauce.
Other foodservice types adopted similar strategies with Shake Shack selling DIY
ShackBurger Kits which allowed consumers to create their own ShackBurger at home.
Each kit can make up to eight burgers and includes 100% Angus beef patties, American
cheese, Martin’s potato buns, tomatoes, lettuce and secret ShackSauce. Bakery
products limited-service restaurant operator Tim Hortons on the other hand, launched
its Tim Hortons DIY Donut Kit, comprising six plain doughnuts with containers of
chocolate fondant and confectionery sprinkles, enabling consumers to decorate their
own doughnuts at home. While meal kits or DIY kits were not a particularly popular or
well-known concept in the Philippines prior to the pandemic, adapting to difficult
circumstances has allowed consumer foodservice players to be more innovative and
creative and could offer further opportunities for growth and development in addition
to possible partnerships with other brands.

Concept of cloud kitchens likely to gain further momentum beyond pandemic due to shifting
consumer demands

The emergence of COVID-19 and its impact not just on society but the way consumer
foodservice players operate has given rise to “cloud kitchens” (also referred to as
virtual or ghost kitchens), as another way for foodservice players to adapt to the new
situation. A cloud kitchen was originally created to allow restaurants to prepare food
solely for delivery. As such, it does not have to be located in an area with high footfall,
and can also be a location which is used or rented by multiple companies to prepare
food to deliver to customers, and therefore reduces overhead costs. Ride-hailing and
food delivery app Grab is among those that now uses a cloud kitchen which it refers to
as GrabKitchen, a concept that has been expanded through Southeast Asia including the
Philippines.
Local fast food giant Jollibee announced towards the end of May 2020 that it would be
spending PHP7 billion on creating its own cloud kitchen as part of a global restructuring
plan which would enable it to improve its delivery service. The player decided to
pursue this strategy as it believed that consumption patterns in terms of foodservice
were unlikely to return to normal in the short term. Using a cloud kitchen is seen as one
solution to address the obvious shift towards home delivery and away from dine-in
options, particularly as many outlets were operating at reduced capacity even as
lockdown measures were relaxed due to social distancing measures.

GLOBAL MACROECONOMIC ENVIRONMENT

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 The COVID-19 pandemic has forced governments to quarantine entire countries,
disrupted global supply chains, slashed business and consumer confidence and
affected financial markets. The effects on the global economy are already being felt,
and will be substantial, but the exact magnitude will depend on the length of
COVID-19 restrictions.
COVID-19 will severely impact both the supply and demand sides of the economy. At
the same time, monetary policy tools are almost exhausted due to the slow recovery
from the Global Financial Crisis. Interest rates have not recovered, so central banks
have to resort to Quantitative Easing programmes (QEs), but QEs have limited effect
on labour markets, consumer spending and other aspects of the real economy.
Thus, countries have to turn to fiscal stimulus. However, the response to fiscal
stimulus will be limited too as long as people are quarantined in their homes. In the
meantime, governments are helping businesses and citizens by providing
emergency loans to cover expenses and lower the spillover effects through
economies, but uncertainty surrounding the pandemic limits economic activity.

GLOBAL INDUSTRY ENVIRONMENT

The COVID-19 pandemic has had a huge impact across packaged food. Shoppers in
many markets have reacted to quarantining by stockpiling, foodservice options have
been shut down, and eating occasions have shifted into the home. In addition,
institutions such as schools have closed, and some consumers believe that home-
prepared food is safer, driving growth of food through the retail channel.
Many packaged food items have seen sales soar as consumers stock up, with some
categories (ie staples with long shelf life) proving primary choices. But beyond this
initial boost, the pandemic brings significant risks to packaged food value sales
through damage to the global economy; as spending power weakens, trading down
will occur and premium ranges will be in the firing line.
There has been extreme growth in e-commerce grocery retailing as the virus
spreads, with governments pushing its use and consumers switching to comply with
social distancing/quarantine or in order to actually secure groceries not always
available in store. Retailers are betting that the change will hold once restrictions
are lifted, with many expanding their operations. Prior to the outbreak, e-commerce
was the channel with the fastest growth rate; this forced acceleration could result in
a paradigm shift in some markets.
Food supply is also being tested, with border closures and absence of workers both
key problems. In future, localism is likely to gain prominence as the ‘need’ for
produce from around the world comes into question, given COVID-19’s
demonstration of how interlinked and vulnerable different markets are.
To better understand the impact of COVID-19 on the packaged food industry and
what the crisis could mean for near- and mid-term forecasts, please read the report,
The Impact of Coronavirus on Packaged and Fresh Food (April 2020), which serves as
an early guide to forecasting the crisis, with insights on current results, lessons from
previous crises on key categories, and scenarios for understanding the virus’ future
impact on packaged food.

DISCLAIMER
Forecast closing date: 12 October 2020
Report closing date: 3 December 2020
Analysis and data in this report give full consideration to the impact of COVID-19 on
consumer behaviour and market performance in 2020 and beyond. However, the
situation continues to develop rapidly, and the influence and severity of the pandemic
are constantly evolving. For the very latest insight on COVID-19 and its impact on
industries and consumers, at both global and national level, readers can access strategic
analysis and updates on www.euromonitor.com and via the Passport system, where
new content is being added on a systematic basis.

SOURCES
Sources used during the research included the following:

Summary 1 Research Sources

Official Sources Dairy Confederation of the Philippines

Depa rtment of Agriculture
Depa rtment of Hea lth
Food & Drug Adminis tra tion
Indus tria l Technology Development Ins titute- Depa rtment of Science &
Technology
Na tiona l Da iry Authority
Na tiona l Food Authority
Na tiona l Sta tis tica l Coordina tion Boa rd

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 Official Sources Dairy Confederation of the Philippines
Na tiona l Sta tis tics Office
Philippine Stock Excha nge
Trade As s ocia tion of Filipino Fra nchis ers Inc
Associations
Cá ma ra Oficia l Es pa ñola de Comercio Indus tria y Na vega cion en Filipina s , Inc
Cocoa Founda tion of the Philippines
Filipino-Chines e Ba kery As s ocia tion Inc (FCBAI)
Mea t Importers & Tra ders As s ocia tion
Philippine Ama lga ma ted Superma rkets As s ocia tion
Philippine As s ocia tion of Flour Millers
Philippine As s ocia tion of Mea t Proces s ors Inc
Philippine Cha mber of Food Ma nufa cturers Inc
Philippine Coconut Oil Producers As s ocia tion
Philippine Confectionery, Bis cuit & Sna ck As s ocia tion (PCBSA)
Philippine Federa tion of Ba kers As s ocia tion Inc
Philippine Food Proces s ors & Exporters Orga niza tion Inc
Philippine Ma ngo Indus try Founda tion Inc
Philippine Society of Ba king
Rice As s ocia tion
Trade Press Bus ines s World Online
Ma nila Times , The
Philippine Da ily Inquirer

Source: Euromonitor Interna tiona l

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