Key Takeaways

• One of the trends in the evolution of cooking appliances is the emergence of smart kitchen appliances or connected kitchens. This trend has been driven by the consumers' demand for convenience and automated cooking.
• The small kitchen appliances market has a revenue of $9.22 billion, and it is projected to grow annually at a CAGR of 3.26% from 2022 to 2027.
• In response to consumers' evolving eating habits during the pandemic, Wholly Veggie launched three new air fryer-friendly products that are sustainable. These new products are appetizers: vegan Mozzarella sticks, vegan Cheddar sticks, and sweet potato corn.

Introduction

I. Trends in the Evolution of Cooking Appliances

Smart Kitchen Appliances

• One of the trends in the evolution of cooking appliances is the emergence of smart kitchen appliances or connected kitchens. This trend has been driven by the consumers' demand for convenience and automated cooking.
• The three largest segments of smart kitchen appliances in the US are smart ovens, smart refrigerators, and smart cooktops.
• Some smart ovens are also integrated with recipe apps and have the functionality for self-adjustment based on what the recipe dictates. CPG brands would do well to produce recipes together with their products.
• Some companies that have launched smart ovens include Amazon and Breville. Amazon smart ovens have Alexa built-in.  
• The global smart kitchen appliances market is valued at $13.18 billion, and it is projected to grow at a CAGR of 18.6% through 2028.

Touch Screen Surfaces

• Another trend is the increasing use of touch screen surfaces in home cooking appliances. Touch screen surfaces have been replacing traditional knobs and controls. This trend is driven by technological development and the need to have precision in cooking.
• A specific development in this area is a touch-sensitive cooktop that makes use of electromagnetic heat.
• A report from Grand View Research also revealed that cooktops and cooking ranges had the largest revenue share in 2020. CPG brands would do well to produce products that can be heated at home using cooktops.
• The cooktop also allows the user to "draw a cooking surface around the base of their pan." The heat would then be adjusted through a swipe in the cooktop surface itself.
• One of the companies participating in this trend is GE.  

II. Evolution and Size of the Home Cooking Appliance Market

Size of the Small Kitchen Appliance Market

• The small kitchen appliances market has a revenue of $9.22 billion, and it is projected to grow annually at a CAGR of 3.26% from 2022 to 2027.
• In addition, the market is also expected to have a volume growth of 0.9% in 2023.

Increased Purchases of Small Kitchen Appliances

• A December 2020 survey of the Association of Home Appliance Manufacturers revealed that small kitchen appliances had the second-highest purchases in the US during the pandemic among the various types of appliances. It was second to personal care appliances.
• About 32% of respondents reported purchasing small kitchen appliances during the pandemic. Almost half (48%) shared that they have been "cooking at home more often during the pandemic." In addition, 42% shared that they will most likely continue cooking at home even after the pandemic.
• Among the small kitchen appliances, the most commonly purchased appliance was the coffee maker. This is followed by air fryers, then "toasters, blenders, slow cookers, and toaster ovens." It would benefit CPG brands to launch products that will make use of those small kitchen appliances.

Increased Use of Baking Appliances

• The pandemic caused consumers to cook and bake more as restaurants had to close. Nearly half or 45% of consumers cooked more in 2021 than in 2020, with 27% of consumers baking more. This resulted in a growth in the use and purchase of baking appliances such as ovens.
• A report from Grand View Research also revealed that the ovens segment is projected to have the highest CAGR among all the household cooking appliances from 2021 to 2028.
• Millennials, Gen Z, and parents are the consumers who have been actively purchasing more bakeware and cookware. This is driven by the consumers' "newfound interest in entertaining at home and building skills." CPG brands would do well to target millennials, Gen Z, and parents.

Purchase Surge of Ooni's Backyard Pizza Oven

• Ooni, a backyard pizza over maker company, had a 300% surge in revenue in 2020. Ooni sold $70 million worth of pizza ovens in only a year.
• According to Darina Garland, Ooni's co-founder, "the pandemic accelerated the company's growth by about three years, and business continues to boom."

Need to Balance Convenience and Experience

• Food brands would have to offer a convenience-experience balance. According to Rebecca Watters, a leading analyst in the Household and Health industry, "The COVID-19 pandemic afforded small kitchen appliance brands across the board an unparalleled opportunity to prove their worth as consumers' time at home led to increased cooking and willingness to invest in their spaces. Yet these levels of elevated engagement are not permanent, especially amid cooking fatigue and as consumers spend more time outside of the home in 2022. For manufacturers and retailers alike, the key will be striking a balance between convenience and experience." 

III. Consumer Food Brands' Response to the Evolution of Cooking Appliances

Kraft Heinz Launched What's Cooking

• In July 2021, Kraft Heinz launched What's Cooking, a new digital platform that aims to educate and inspire home cooks.
• For this launch, Kraft Heinz partnered with Top Chef alumnus Edward Lee. Chef Lee serves as the creative director of What's Cooking.
• The launch of What's Cooking was Kraft Heinz's response to the popularity surge of home cooking and the use of home cooking appliances.
• What's Cooking is designed to offer everyday content that will help demonstrate new ways of using pantry staples such as Kraft Macaroni and Cheese, Heinz Ketchup, and Philadelphia Cream Cheese.
• According to Diana Frost, Kraft Heinz's chief growth and sustainability officer, "The data and insights that we will get from What's Cooking will help [inform] how we serve up personalized and relevant content, as well as inform what type of creators we want to partner with next. We're putting consumers, a culture of food, and our brands at the center of our transformation, and [What's Cooking] does such a great job of doing that.

 

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Mondelez Launched New Baking Mixes

• Mondelez International, in partnership with Hometown Food Co., launched a new line of baking mixes called the "Pillsbury Funfetti Oreo baking mixes and frosting" in 2021.
• This is Mondelez's response to the surge in consumers' oven use for home baking during the pandemic.
• The new line of baking mixes includes Funfetti Vanilla Premium Cake Mix with Oreo Cookie Pieces, Funfetti Chocolate Premium Cake Mix with Oreo Cookie Pieces, Funfetti Buttermilk Pancake & Waffle Mix with Oreo Cookie Pieces, Funfetti Premium Brownie Mix with Oreo Cookie Pieces, and Funfetti Vanilla Flavored Frosting with Oreo Cookie Pieces.  

 

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Wholly Veggie Launched Air Fryer-Friendly Plant-Based Foods

• In response to consumers' evolving eating habits during the pandemic, Wholly Veggie launched three new air fryer-friendly products that are sustainable. These new products are appetizers: vegan Mozzarella sticks, vegan Cheddar sticks, and sweet potato corn. The Mozzarella and Cheddar sticks are covered with crispy cauliflower panko coating, while the sweet potato popcorn is "covered in a crispy chickpea crumb."
• According to John Bonnell and David Orr Gaucher, Wholly Veggie's co-founders, the launch of the new products was a response to the notable increase in "demand for both frozen products and products that can be prepared in air fryers." A survey from the American Frozen Food Institute revealed that 70% of consumers have been buying more frozen food than before the onset of the pandemic.
• Bonnell said, "We saw over the course of COVID and even before, the impact that air fryers have had on the increased adoption of frozen snacking, but also a general consumer desire to explore outside of fake or faux plant-based burgers and sausages."

Nestle USA Acquired Freshly

• In November 2020, Nestle USA acquired the meal delivery service Freshly. This was in response to the popularity of the at-home eating market during the pandemic.
• The company offers meal kits which consumers have been increasingly using with the increased home cooking as it offers convenience.
• According to Steve Presley, CEO of Nestle USA, "Freshly is a fast-growing, food-tech start-up, and adding them to the portfolio accelerates our ability to capitalize on the new realities in the US food market and further positions Nestlé to win in the future."

Nestle Launched AI Baking Coach

• Nestle launched an AI-powered baking coach called Ruth in response to the home baking craze during the pandemic. Ruth is a virtual coach designed to answer consumers' cookie questions.
• Ruth is named after Ruth Graves Wakefield, a food lecturer and dietician who invented the "original Toll House chocolate chip cookies in 1938." 
• According to Orchid Bertelsen, Nestle USA's head of digital strategy and innovation, "Delighting the consumer drives everything we do, so when we analyzed our Consumer Engagement Centre calls and found 70% of all inbound inquiries were related to troubleshooting our iconic Nestle Toll House cookie recipe, we knew we had an opportunity. The creation of Ruth showcases our investment in tech innovation to ensure we're meeting consumer needs."

 

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IV. Home Cooking Trends Among Younger Generation of Consumers

An Easier and More Exciting Home Cooking

• Younger consumers have been cooking more at home during the pandemic. Consequently, they have also been purchasing more cooking appliances such as air fryers, indoor grills, crock pots, and instant pots. These younger consumers include millennials and Gen Z.
• According to IRI, about 83% of all meals in the US have been cooked at home since the onset of the pandemic. For many Gen Zs, this is the first they have had to cook their meals.
• The trend is to buy appliances that would make home cooking easier and more exciting. This trend is driven by Gen Z and millennial consumers' desire for easier home cooking. Since they have been more used to eating in restaurants pre-pandemic, easier home cooking would help in their lifestyle transition. For these two younger generations, convenience is key.
• According to Darren Seifer, a food and beverage industry analyst from New York's NPD Group, "Everyone's been making more meals in the home. So what consumers, Gen Z and millennials, are looking for right now are meal solutions. Gen Z, especially, is very much in that life stage where they are possibly going into their first home, and they don't have that mental cookbook."
• Seifer's recommendation is to launch product bundles that consumers can prepare with cooking appliances such as air fryers or indoor grills.
• This is also why meal kits have gained popularity among younger consumers. Younger consumers would appreciate meal kits consisting of veggies, starch, and protein.
• Seifer said, "If we think about it if that consumer walks into the store and the first thing they see is the meal kit, right off the bat, that answers the question of what's for dinner. So, it helps transform the store and also provides a solution."

Buying with Purpose

• Another trend among younger consumers is buying with purpose. This trend or their interest in buying with purpose has been driven by the pandemic, which caused them to be more mindful of social biases and injustices.
• According to Shelley Balanko, Bellevue's senior vice-president, "The pandemic showed us the very tenuous nature of the global supply chain. And then, of course, with the eye toward social injustices and biases in our society, it's the younger generational cohorts who are paying attention to this and feeling mobilized to purchase in a way that makes a difference."
• Gen Z consumers like to see transparency and storytelling, may it be stories "behind the farmer or the reason for the product to be on that shelf, the creation, and the feel-good aspect."
• In addition, millennials and Gen Z consumers have also been leaning towards eating for wellness. The benefits they primarily seek from their foods are health and wellness.
• About 71% of millennials and Gen Z seek foods with healthful benefits. This includes foods with specific benefits (63%), foods that help with moderation in eating (70%), have a high quality (66%), or holistic (61%).
• In addition, younger consumers perceive products that have been sourced more sustainably and ethically as inherently healthier.
• According to Balanko, "One thing the pandemic has really done for all consumers is highlighted the importance of eating for wellness. And when I say eating for wellness, for younger consumers, in particular, they define wellness most holistically. For them, issues around stress and anxiety are more salient than, say, chronic conditions."

Research Strategy