Global food commodity prices declined by 10% in December 2023 versus a year earlier (FAO) and, in the UK, December’s food price inflation rate fell for the 9th consecutive month to a modest 8%! Phew, consumers can relax … but, hang on, in December 2023 UK food prices were 26% higher than one year earlier and 21% of those with dependent children and renting their house said that they had run out of food in the past 2 weeks and had been unable to afford more (UK ONS). That’s in Great Britain, not in South Sudan. This distressing picture is common throughout much of the world. The turbulence of the past few years is far from over and provides the backcloth for how consumers will cope with feeding their families and entertaining themselves with food during this year. They’ve got a lot on their plates:
- historically very high food prices, then, there’s the mortgage/rent, energy and transport costs ticking along at way above pre-pandemic levels and, surely, we’re done & dusted on the pandemic, aren’t we?!;
- with half of our world having national elections in 2024 and disconcerting polarisation of voter opinion (e.g. in Poland, Hungary, Germany, USA), it seems unlikely that there will be an outbreak of political tranquillity through the year;
- wars in Ukraine and the Middle East (and, heaven forbid, bellicose paroxysms in The East China Sea) all have tragic implications and significant impacts on the global food supply system which raises national and individual household concerns about food security which is all we need given the monthly evidence of the impact of climate change on global food supplies;
- but relax, AI may be coming to the rescue (we mean Artificial Intelligence not artificial insemination) or is that another threat to consumer privacy and us falling under the hegemony of the data superpowers?!
These maelstroms of concerns will have a profound impact on food purchasing behaviour and will be most demonstrated in the differential contents of the shopping carts of the more comfortable “income haves” and the hard up “income have nots”. But, across all household income groups, purchase compromises will be consistently made – for example, important “citizen concerns”, say on the environment, will be pushed to the back of the mind as the apprehensive shopper comes to terms with the size of the weekly food bill. There’s some academic research here showing that consumers have “a finite pool of worry”, i.e. worrying about one vital personal issue (can I afford to buy food?), can relegate worries about other hugely important issues (climate change).
It’s the first month of the year and this brings a shower of consumer mega-trends from international consumer insight companies. Here’s the potted version of the trends that were most frequently identified and attracted our attention:
- shoppers will continue to hunt for the very best deals and social media will be awash with “savvy shopping tips”. As per 2023, supermarket private label will see even further growth and not just at the “value” level with premium PL performing exceptionally well in traditional supermarkets and in hard discounters. Expect to see meals purchased out-of-home under pressure and more families replicating their favourite restaurant meal at home. Air fryer ownership will continue to grow and have a profound impact on fmcg “cook-at-home” products. In “the centre of the dinner plate”, affordable, versatile, convenient chicken dishes will dominate;
- whilst taste, price and convenience continue to be the principal attributes of food products for most consumers, the physical and mental health of me and the family is on the rise. On health and food, they want simple, pragmatic assistance/solutions. International surveys identify the following as the most front-of-mind – boosting immunity, improving gut/digestive health, heart-healthy, improving sleep, “detox”, helping mental focus/concentration, boosting energy, improving “looks” (beauty), and building up muscles;
- in a bruising world, we seek indulgent and comfort foods that can assuage anxieties. 2024 will be a bonanza year for consuming favourite, affordable distractions. There are strong positive signs of growth in savoury and sweet snacks and hot drinks (particularly coffee) purchased out-of-home. Note the success of value-driven food service companies – in the UK, Greggs the working family’s baker, is opening 150+ new stores per year (they’re at 2,500 now) and, globally, McDonald’s is in barn-storming mode (with a stock/share price well above pre-pandemic levels);
- concern about the health of the planet is established in the minds of young people across the globe (as it should be as they’re going to have to improve it!). Globally, the proportion of those that identify themselves as “Eco-Actives” is highest in Europe and “Eco-Dismissers” are disappointingly in the majority in the USA. Practicing what they preach (on key areas such as reducing carbon impact/food waste/plastic recycling/water usage) is constrained by their pocketbooks and not knowing what they can actually do to make a difference. Worrisomely, there is a growing proportion of consumers who mistrust grand environmental claims made particularly by larger fmcg companies eroding trust in the overall food system. Younger consumers are most likely to consider corporate values when making purchases. Increasingly, farmers have a higher profile in the mind’s eye of consumers who are concerned about them being treated fairly by “Big Food”;
- the beneficial impact of AI is highlighted by all major trend spotters, although it’s moot whether most consumers have grasped what the impact of this emerging “super technology” will be. Let’s hope it’s better shopping and product experiences. PepsiCo was first across the line with Doritos Silent – “the world’s first AI-augmented snack powered by Crunch Cancellation” (if you’re in the dark, the product is for gamers who don’t want the crunch of their snacks interfering with their game!). Hmm, it has its place but a step below altruistic AI breakthroughs in health diagnostics, albeit for us well above the monument to UPF excesses noted in the American Football Snack Helmet we spotted “in the Middle of Lidl” recently!
Are the annual outpourings of consumer trends for the New Year just so much froth largely relevant for big league food players, or are they directly relevant to businesses of all sizes through input, farm, ingredient, processing, packaging, distribution, food retail and service? For our mind, it’s the whole caboodle and increasingly so! The distance between the food consumer and the primary food producer is simply getting shorter as consumers ask more searching questions about where, how and by whom and using what practices their food is produced. This presents a substantial opportunity, particularly for those food producers most buffeted by cost increases, competitive pressures and climate excesses (not least, horticultural, livestock and dairy farmers) to showcase the intrinsic attributes of their natural, healthy, eco-friendly products which are in tune with what many consumers want from their food – to be tasty and good for their health and the health of the planet.
Supermarkets in your pocket. 