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2024 Food Industry Trends

Clarkston’s team of food and beverage consultants have highlighted the top food industry trends that businesses should consider. Read all 5 trends for 2024 by downloading the full report here.

The consumer food products industry has been at the forefront of global supply chain challenges, elevated inflation, and shifting consumer demands. This has triggered higher prices and disrupted operations, labor, and procurement. Despite these obstacles, this environment has also provided companies with opportunities for innovation and growth by meeting these roadblocks with novel products and superior service.  

The global market for consumer-packaged foods is valued at nearly $1.1 trillion and is anticipated to reach $1.6 trillion by 2030. The following findings will delve into the up and downstream pressures affecting the industry, including elevated input prices and labor shortages. It will also explore the ever-changing preferences and demands of the consumer, from value-driven purchasing to innovative methods of brand discovery.

2024 Food Industry Trends

Trend #1: Up and Downstream Pressures

External challenges have put pressure on industry inputs and have complicated their relationships with downstream partners, like distributors and retailers. This multi-pronged assault on the bottom line has been and will continue to define the industry for the near future.  

The costs of raw materials, energy, and labor have continued to increase due to geopolitical conflicts and fiscal and monetary policies. As a result, food prices are nearly 11% higher today than they were in 2021. In fact, 2022 saw the fastest rise in food prices since 1979. While inflation is cooling in 2023, these elevated food prices still linger. Eggs, for example, are 250% more expensive in 2023 than they were two years prior. These higher prices are being passed onto consumers, impacting their purchasing habits. Lower-income households, in particular, are dealing with the pain of this inflationary environment by consuming food of lesser quality and quantity. 

In an attempt to mitigate labor and supply chain risks, packaged foods companies have invested heavily in capital expenditure. These expenses, while achieving more stable sources of transportation and staffing, have eaten into EBITDA margins, which are far below historical performances and market figures. Food sold on promotion has eclipsed levels not seen since 2019 in response to lower sales figures. While 2024 might see a low grocery inflation rate, prices have still outpaced wages in many cases; this helps explain why grocery bills are still one-third what they were in 2019. Because of this, consumers will continue to search for deals or sacrifice higher-quality ingredients and pre-packaged meals for cheaper and homemade food. The next year will see high promotional activity as the supply is trying once again to meet demand.  

Download the Full 2024 Food Industry Trends Report Here

Trend #2: Flexitarian Diets Build Plant-Based Stability

While plant-based diets are nothing new, their broader adoption by consumers in the United States is accelerating. Consumers’ budgets are increasingly informed by personal convictions and health concerns, such as environmental impact or animal cruelty. According to one report, 40% of consumers purchased meat or dairy alternatives within the last six months. This segment of the consumer population is loyal, with 64% of them buying plant-based alternative products several times a month. The wider acceptance of plant-based products is also an indicator of a flexitarian consumer, with only 20% of those consumers eating a plant-only diet. This is an encouraging sign that these products can attract the more casual consumer as well as the dedicated vegan or vegetarian.  

The plant-based foods market is sized at nearly $43 billion and is expected to grow at a CAGR of 18.10% and eclipse $162 billion by 2030, according to Bloomberg Intelligence (BI). This growth is, in part, being driven by the partnerships between consumer products companies and restaurant chains. Segment leaders like Beyond Meat, Impossible Foods, and Oatly have all made moves to position themselves among traditional food options at some of the most influential restaurants in the world. These partnerships have largely gone well by triggering higher foot traffic and expanding their consumer bases. Consumer product companies should be aware of these developments since we typically see restaurants setting the trends that are then adopted within the retail world. For example, plant-based burgers saw increased demand within retail after Burger King’s Impossible Whopper roll-out.  

The plant-based foods segment is not without its challenges. This inflationary environment will test whether consumers, particularly those in the low-to-middle income levels, will sacrifice purchasing power in favor of plant-based goods. Additionally, consumers will need to continue to buy into the health benefits of these alternative products to transition beyond a fad and into a consumer staple.  

Continue reading by downloading the full report below.

Download the Full 2024 Food Industry Trends Report Here

Read last year’s Food Industry Trends Report here.

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Contributions by Ian Civiletti

Tags: 2024 Trends