A move to three square meals a day, more home cooking, and an all-out cry to ‘get real’ are among the major trends reshaping the food industry in 2011 and beyond.
Although the consumer food products industry demonstrated definite signs of improvement last year, financially wary—and weary—consumers will continue to practice conservative food spending and eating behaviors in 2011, albeit to a lesser degree than two years ago. Rising food and gasoline prices, along with high unemployment and inflationary fears, will likely make 2011 another challenging year. One-third (33%) of consumers feel their own financial situation will get worse in 2011; 40% believe the economy will fail to improve in the next six months (IRI, 2011).
But it’s not all doom and gloom for food marketers. Just over seven in 10 meals (72%) are now prepared in the home, rejuvenating once stagnant basic ingredient, home baking, and prepared mix sectors; 18% of meals were purchased at restaurants (NPD, 2011; Sloan, 2011a).
Eating-in and take-from-home trends have rejuvenated the center store, which houses many of the 10 fastest-growing categories in unit sales in grocery, drug, mass excluding Wal-mart, and convenience stores (FDMxC) (IRI, 2011). Examples of such fast-track categories include ready-to-drink tea and coffee, snack/granola bars, and dried meat snacks (see Figure 1). Across meal-related segments, the fresh and frozen foods departments also posted above average growth, led by frozen vegetables and refrigerated lunches (IRI, 2011).
Figure 1. Top 10 Consumer Packaged Goods Growth Categories (% change in unit sales, 2010 vs 2009 in FDMxC). From SymphonyIRI Group.
Small, indulgent treats, e.g., cheesecake and frozen novelties, enjoyed brisk sales (IRI, 2011). Among the 10 largest consumer packaged goods (CPG) food categories, chocolate candy, salty snacks, and bottled water made significant gains in FDMxC in 2010 (IRI, 2011). New/unique varieties, recipes, and flavor combinations topped the list of claims found on some of the most successful new foods/drinks introduced from 2009 to 2010 (IRI, 2010a). Claims that relate to technological advances (packaging that permits steam cooking in the microwave, for example) are now second only to flavor claims among the year’s best-selling new foods and beverages (IRI, 2010a).
In 2010, selecting groceries to prepare nutritious/wholesome meals was a priority for food shoppers, second only to taste. Shoppers also said they were purchasing products in order to help manage a specific health condition and to lose weight (IRI, 2010a).
Although consumers say they’ll continue to eat out less frequently this year than they did a few years ago, U.S. restaurant industry sales are projected to reach an all-time high of $604 billion after three years of declines (IRI, 2011). Sixty percent of quick-service restaurants (QSRs), 86% of fine dining establishments, 84% of casual restaurants, and 68% of family dining restaurants plan to add new menu items this year (NRA, 2011).
Private-label share gains slipped in both dollar and unit sales in 2010, down 0.5% across all channels (IRI, 2011). However, at $88.5 billion in sales, private label will remain a powerful force (PLMA, 2011).
Supermarkets continue to dominate consumer food spending with a 49% share of sales in 2010. The drug channel posted notable gains in the food/beverage area in 2010 (IRI, 2011).