Chicago, IL—Circana (formerly IRI and The NPD Group) released its 2024 food and beverage outlook. A key takeaway: Modest food and beverage volume growth is expected next year after three consecutive years of volume declines. The outlook, which provides insight into the anticipated performance of the food and beverage industry throughout 2024, suggests that we will see a more favorable landscape in the coming year as factors that negatively impacted 2023 are expected to recede.
“Amid shifting consumer preferences and evolving market dynamics, our food and beverage outlook not only highlights key growth opportunities for 2024 but reveals a cautiously optimistic outlook as we emerge from a myriad of challenges that the industry has faced over the past several years,” said Executive Vice President and Practice Leader Sally Lyons Wyatt. “With continued innovation and adaptability, retailers and manufacturers will be poised to position themselves for success in the coming year and beyond.”
Among the findings:
Inflation Numbers Expected to Go Down
An overall more favorable performance for the industry as a whole is predicted for 2024, thanks to an expected ease in inflation. An improved macroeconomic environment and growing promotional investments will allow for a more steady increase in sales.
Beverages, Deli on the Rise
The beverage and deli categories will be the leaders in food and beverage, Circana reports. Health-conscious consumers are driving beverage sales, as they are looking for functional beverages that boost high protein and energy benefits. The drink aisle has also seen a surge in innovation from brands.
With consumers prioritizing grab-and-go options that address diverse needs, deli sales are expected to climb. According to report findings: “Shifting consumer preferences in other departments throughout the store will likely put pressure on unit growth.” This applies to prime shelf real estate. Products on perimeter aisles will need to optimize turnkey options, intended to meet the needs of on-the-go consumers. Frozen products should be reevaluated for both in-store and online purchase, to meet customers needs. Expect consumers to look for products that offer convenience, quality, and value, particularly at the center store.
Data and analytics from this report were developed using econometric demand models that leverage Circana’s Demand Forecasting Platform. More than 100 variables were analyzed to test hypotheses for each model. The models were designed with best fit, significance levels, and intuitive insights in mind. The future forecasting was created using historical trends and insights from industry experts. This allowed Circana to estimate future sales and test different scenarios.