SUMMARY
Food and beverage inflation is still high (4.9% YOY in July 2023 and up 20% from 2019) and volumes are declining, but consumers are not eating less. The volume shift is also not a simple one-for-one exchange between retail and foodservice. While retail unit volume is declining, it remains higher than pre-pandemic. And foodservice volume is increasing due to pockets of robust growth, while other areas lag behind.
Circana’s August 2023 Food & Beverage Landscape report, “Declining Volume Sales ≠ Less Consumption,” covers this topic in depth.
HIGHLIGHTS
- CPG food inflation rose 4.9% between July 2022 and July 2023 and is up an average of 20% from 2019. Food-away-from-home prices are up 7.5% from 2022.
- Consumers are continuing to trade down and buying more store brands than a year ago to keep costs down.
- Elimination of extra SNAP benefits nationwide in March reduced food and beverage aid by $70 per household. According to the Census Bureau, households sourcing meals from food banks increased 15% in April 2023 vs. the prior year.
- 86% of meals are sourced from home and 14% from foodservice as of the close of 2022, still up from the pre-pandemic 84% home/16% foodservice split.
- Meals at home deliver savings, with foodservice meals costing more than 4 times what at-home meals do.
