Brits are making smaller, more frequent trips, and favouring quick-prep options while some are trading up to premium products, a recent report has shown, highlighting signs of stabilisation across food and beverage sector.
According to a recent report by consumer research giant Circana, as of mid-2024, the food and beverage industry has shown volume growth of 0.8 per cent, a price increase of 1.4 per cent, and top-line growth of 2.2 per cent.
Inflation eased across the sector in 2024, impacting all segments. Despite ongoing concerns about pricing, Circana noted that bifurcation in F&B purchases continues – some consumers are trading up to premium-priced products and super-premium items, while others are opting for private label brands.
As consumers increasingly value "just-in-time" convenience and quality in their food choices, the study highlights that they are making smaller, more frequent trips, and favouring quick-prep options from produce, refrigerated, and deli departments. The frozen and refrigerated segments have outperformed initial expectations, with refrigerated trailing only produce as a leading department in volume growth year-to-date 2024. On the other hand, the seafood and alcohol segments have experienced volume declines.
“Following several years of economic volatility, we’re now seeing signs of stabilisation across various sectors, including food and beverage,” said Sally Lyons Wyatt, global executive vice president and chief advisor at Circana.
“While we anticipated greater support from an improving economy, the shift from away-from-home to in-home consumption helped keep our projections on track. Manufacturers will need to strategically assess how to stimulate demand and drive profitable growth, and Circana provides the data-driven insights necessary to inform those decisions.
“As we approach the end of 2024, we anticipate the year will close out near our mid-year projections. We expect volume growth will ease to 0.5-1.0 per cent, with some potential softening later in the year as fast food ‘price wars’ could impact retail F&B growth, assuming current economic conditions hold. Year-over-year price realisation is projected to increase slightly to 1.5-2.0 per cent, driven by slowing promotional investments and the introduction of new price increases. This will result in overall top-line growth of 2.2-2.7 per cent for 2024.”
Looking ahead to 2025, Circana is projecting a slight uptick in top-line dollar growth, expected to be between 2.5-3.5 per cent, driven primarily by increased price realisation between 2.0-3.0 per cent, while volume growth is anticipated to moderate between 0-1.0 per cent.
