Circana’s latest Year-End 2024 Food and Beverage Market Outlook predicts continued growth in 2025, highlighting evolving consumer price expectations.
The report projects a 2.0% to 4.0% increase in dollar sales, driven by modest inflation, shifting shopping behaviors, and a heightened focus on value.
Consumer Price Expectations Drive Market Trends
According to Circana’s insights, the food and beverage (F&B) industry saw a 2.6% rise in dollar sales in 2024, increasing volume sales by 1.1%. While price/mix grew 1.6%, the report reveals that consumer price expectations reshape spending patterns.
Channels offering everyday value, such as e-commerce and private-label products, continue to gain traction as shoppers seek affordability without compromising quality.
“Consumers are increasingly focused on value,” said Sally Lyons Wyatt, Circana’s Global Executive Vice President. “Private label products saw a 3% volume increase, compared to a 1% decline for mainstream brands, highlighting this trend.”
Dynamic Food and Beverage Shopping Patterns Emerge
Circana’s report on consumer price expectations points to a significant shift in shopper behavior, affecting both price/mix and volume growth.
Key findings include:
- Out-of-home dining: Down 2% in 2024, driving a 1% rise in in-home meal volume.
- Shopping frequency: Up 8.9%, but with 11% fewer items purchased per trip.
- Category focus: Perimeter food and beverage categories grew by 2% in volume, outpacing center-store growth at 0.6%.
These trends underscore how evolving consumer price expectations influence shopper decisions, particularly as they balance necessity spending with discretionary purchases.
Related Article: High Food Prices: Inflation or Speculation?
Predictions for 2025: Modest but Steady Growth
Circana forecasts dollar sales in the food and beverage sector will grow between 2.0% and 4.0% in 2025. Price/mix is expected to increase by 1.5% to 3.5%, reflecting continued base price inflation and stable promotion levels.
Volume growth will likely remain modest, ranging from 0% to 1%, as at-home consumption stabilizes and foodservice traffic improves slightly.
External factors, such as potential government policies and economic shifts, may impact these forecasts of consumer price expectations.
Circana advises careful monitoring of proposed legislation affecting wages and import costs.
Food and Beverage Regional Outlook: EMEA and APAC
- EMEA: Food and beverage value sales are projected to grow around 4% in 2025, driven by a 3% rise in price/mix and steady unit sales. The region sees continued expansion in private-label brands, now comprising 39% of sales.
- APAC: Anticipated unit sales growth of 1.6% and slowing price/mix trends will contribute to a 4% increase in value sales. This reflects positive consumer confidence and a shift from foodservice to retail spending.
Balancing Value and Growth
For retailers and food and beverage manufacturers, aligning strategies with evolving consumer price expectations is crucial. Businesses can navigate market complexities by emphasizing transparency, optimizing promotions, and offering value-driven products while fostering trust and loyalty.
“Understanding and adapting to these expectations will be key to success in 2025,” Wyatt concluded.