Inflation impacted the way Americans celebrated July 4, 2024.
The geopolitical crisis, a severe drought, rising overhead and restaurant wages, rising interest rates and higher inflation throughout the supply chain all contributed to increasing prices.
As a result, food inflation jumped 25% from 2019 to the end of 2023. The additional inflation seen in the first half 2024 has been the tipping point. Many consumers who continued to spend in the face of 40-year highs in food prices are now reevaluating their budgets.
“The consumer is waving the white flag on food inflation,” said Tom Bailey, senior consumer food analyst at Rabobank. “With an added 2% in price hikes in 2024 coupled with the cost disparity between dining out and cooking at home at its widest margin in history, we’re seeing heightened fatigue and frugality.”
And this was reflected in the Fourth of July celebrations.
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On the grill
Rabobank’s Barbecue Index, which measures the cost of staple ingredients for a 10-person barbecue, indicates that Americans would spend $99 to host a cookout on the Fourth of July in 2024. Last year, it was $97, and in 2018, it was $73.
This year, beer, meat, soda and lettuce account for 64% of the total cost.
That brings the inflation increase for barbecue to 32% from 2019.
The Rabobank Barbecue Index assumes an average situation of grilling burgers – with family and friends – over the Fourth of July weekend. This includes 10 adults each consuming the same amount of food and drink. The premise is that each person will consume a cheeseburger with cheese, lettuce and tomato, a chicken sandwich with lettuce, tomato and a cheese sandwich, two handfuls of fries, two beers, a soft drink and ice cream. As a point of comparison, the Index uses the Bureau of Labor Statistics as a source of data.
Strategies to retain customers
– Burgers, not steaks. Cuts of meat on sale, knowing that shoppers will fill their carts with other complementary items.
– Thighs and legs. Chicken can also be the centerpiece when firing up the rotisserie.
– Meat and beverage specials. Offer the ability to recreate the restaurant experience without leaving home.
– Alcohol and non-alcoholic. Non-alcoholic beer has been a surprising new revenue source for brewers, leading to a 31% increase in non-alcoholic adult beverage sales by 2023.
– Dairy. Consumers are looking for a healthier diet, but the International Dairy Foods Association survey showed that more than 97% of Americans enjoy ice cream, and vanilla is the most popular flavor.
– Private Label. Bakery products have felt the impact of price increases in 2023, resulting in lower sales volume. Consumers are now more aware of waste and opt for smaller, supermarket-branded packaging.