Key Takeaways

1. People are shopping and eating differently — for reasons that don’t uniformly apply. You need to show up for different consumers in different ways.

2. Affordability and convenience matter more than ever. Price and promotions may drive traffic, but relevance wins loyalty.

3. The fight for future market share starts now. Staying relevant 365 days a year means taking a full 360-degree view of consumers, demographically and beyond.

Here’s a scenario that might sound familiar: Every New Year’s Eve, people resolve to eat better and exercise more. Grocery carts are loaded with fresh fruits and vegetables. Lapsed fitness memberships are reactivated. However, weeks later, that same produce is still languishing in the crisper drawer of the fridge, and those memberships go dormant again.

It’s a dance many U.S. consumers do every year. But one key thing is changing. At the grocery store at least, relevance now trumps aspiration. Consumers are less willing to squander their diminished buying power on perimeter items they won’t eat or can’t use conveniently. Traditional pricing and promotional strategies likely won’t change their minds.

Now’s the time to pivot and respond. A deep dive into Circana’s proprietary data reveals what drives spending decisions in fresh right now.

Here’s what you need to know.

1. Consumers no longer behave the way they used to.

In 2023, 86% of annual eating occasions in the U.S. were still sourced from retail. How consumers shop for fresh today — and what they buy — boils down to one thing: what they eat. And what they eat depends much less on generic pricing and promotion strategies and much more on questions like:

1. How easy is it to find what I need?

2. How long will this take me to prepare?

3. Can I use all of this?

4. Do I even like it?

Notably, it also depends on their age. Consider this: Consumers, especially those in Gen Z and millennial households, are leaning into less prep and less involved meals for dinner. Along with that, those same households are snacking more than three times a day, offering significant opportunities for fresh foods that are not always in consideration.

How to win:

Understand that fresh shoppers are not a monolith and leverage that to your advantage. Capture and keep shoppers by aligning your product mix to their desire for quality, convenience, and ease of purchase. Focus on making it easier to solve for the occasion, whether it’s the main meal or snack time.

This leads me into a specific element of shifting consumer behavior I explicitly want to call out:

2. The “big shop” has left the building.

Just-in-time shopping has replaced it. Consumers only buy the fresh they need, only when they need it — no more, no less. Why? To mitigate inflation and waste.

This is one reason cost-sensitive consumers, particularly young millennial families, have shifted their fresh shopping toward less traditional channels. Since 2019, we’ve seen a shift of three full percentage points from traditional grocery share of fresh to mass, club, and specialty retailers. Discovery of quality products and positive shopping experiences have helped these channels retain their growing share of fresh foods.

How to win:

Volume is soft, but trips are up, and people still need to eat. Relevance is key. How can you redefine value in the face of inflation? Think multi-dimensionally beyond price. Quality, experience, and convenience all matter when retaining your place on the grocery list or bringing people into your store.

3. Relevance is relative.

Being “the freshest” no longer wins, especially in younger households. Similarly, pricing and promotions may entice shoppers through the door, but if the overall experience doesn’t resonate, it may be their last visit.

How to win:

Be curious about consumer wants and needs. What are they asking for? How can you provide it? The most successful retailers and suppliers will use data to segment and gain insight into their consumers. Then, they will transform this insight into tailored solutions that span product mix and format and draw people in with the right messages via the right media at the right time.

The bottom line

Retailers and suppliers must work a little harder to define value, capture loyalty, and maintain relevance. We’re here to help. Watch our February Top Trends in Fresh webinar: Seizing the Opportunity in How We Shop and Eat Today. And stay tuned for our May webinar, where we’ll discuss how to activate and tailor to key customer segments using generational and other demographic insights.

Questions? Email me!