Daily Briefing (Insiders Only): An (Early) Industry Year-In-Review
Global food and beverage dollar sales are rising (2.6%) while price/mix growth (1.6%) moderates below historical averages, according to market researcher Circana’s year-end outlook for the industry. Here are the top takeaways:
Volume sales were up 1.1%, as post-pandemic declines stabilized and higher prices at restaurants pushed consumers back to dining at home. (Out-of-home dining traffic fell 2% while in-home meals rose 1% in volume.) Price/mix growth trends broadly reflect a continuation of modest increases in base prices countered by increasing promotion rates.
Retail channels offering everyday value have become more influential, said Sally Lyons Wyatt, global executive vice president and chief advisor at Circana. But value doesn’t always mean cheap. Circana tracked a 1% decline in mainstream brands as shoppers selectively chose premium brands – up 3% – “that deliver the right value,” said Lyons Wyatt.
Private label continues to be a major draw, with volumes up 3% over last year. Additionally, Lyons Wyatt noted, “as consumers adopt more selective buying habits, they purchase and stock up on some products less often, delay certain purchases, and switch to alternatives as they reassess spending from necessity and make more room for discretionary items.”
Shopping patterns are shifting. Grocery trips are up 8.9%, with fewer items in the basket – as much as an 11% decline. Consumers are favoring the perimeter of the store, which saw volumes increase 2% while center-store volumes were up 0.6%.
Online transactions are now driving 35% of food and beverage dollar sales growth, “despite holding only a 10% market share,” Lyons Wyatt said.
What’s in store for 2025? Circana forecasts a 2%-to-4% increase in dollar sales, with price/mix up 1.5% to 3.5%. Volumes sales growth is forecast to range between 0% and 1%, as foodservice traffic improves.
Circana’s outlook assumes a “modest slowdown” in economic conditions, with softer growth for gross domestic product and disposable income, a “slightly weakening” job market, and stable consumer confidence. A stronger-than-expected economy may indicate a small decline in volume growth as consumers dine out more, plus stronger price/mix as shoppers opt for premium items. Weaker conditions could lead to more at-home eating and fewer splurges.
