2024 Consumer Outlook: adapting to anxiety

Anyone hoping for a kinder, gentler post-pandemic world has no doubt been sorely disappointed by events of the past year. Inflation, political polarization, extreme weather disasters, and brutal military conflicts have been among the unwelcome realities of life in 2023.

Respite from economic and geopolitical tensions doesn’t appear to be on the horizon. “2024 is set to be yet another uncertain year,” says Jenny Zegler, director of Mintel Food & Drink. “This uncertainty will find consumers seeking any opportunity for relief from the escalating pressures of their lives.”

The anxiety and apprehension that stem from such pressures will affect how consumers think, feel, and shop in 2024. In this environment, consumers will make food and beverage choices that supply at least some measure of comfort, help preserve physical and mental health, and deliver on verifiable sustainability benefits—all while keeping a careful eye on household budgets. That’s the word from the trend trackers, market researchers, consumer experts, and food system watchers Food Technology polled to develop its 2024 consumer trends forecast.

It’s not all doom and gloom, however. Consumers will continue to cultivate cooking skills and enjoy home-centered socializing. They’ll also be on the lookout for products that point back to earlier, perhaps less tumultuous times in their lives, while still delivering on innovation.

Here’s a look at five overarching consumer trends that will help define the food and beverage market in 2024.

1) A Craving for Comfort

“The constant global, regional, and local crises” take a toll, and younger consumers in particular are feeling increasingly anxious about the world around them, says Euromonitor International Senior Research Analyst Erwin Henriquez. He describes the current market environment as an “anxiety economy.”

In this market, he says, “A wide range of food and drink products have emerged, promising to help consumers feel better about their lives. This trend is particularly noticeable in the drinks industry, where herbal teas are leveraging traditional positioning, and new products are incorporating plant extracts and nootropics.”

For Gen Z and millennial consumers, the groups that market intelligence service YPulse focuses on, the era of anxiety is manifesting itself in a couple of ways, explains Chief Content Officer MaryLeigh Bliss. On one hand, she notes, young adults are “gamifying” the shopping process, seeking out cheaper versions of high-end items. But notably, she continues, “Gen Z and millennials are willing to spend and splurge on the things that bring them big moments of joy,” whether that’s tickets to a Taylor Swift concert or a larger-than-life Halloween yard decoration.

There’s an element of nihilism to such splurge spending. “Many are feeling they should spend what they have to make their present joyful because the future is far from certain,” Bliss says.

“Feeling insecure creates demand for clean label, local products and traditional recipes that feel safe—like something your grandmother used to make,” observes Lu Ann Williams, global insights director, Innova Market Insights.

Many are feeling they should spend what they have to make their present joyful because the future is far from certain.

In the current stressful, tumult-filled period, consumers may take solace in products that remind them of happier, seemingly safer times, says Rabobank Senior Analyst Tom Bailey. “I think consumers find a lot of comfort in familiarity,” he continues. Bailey adds that although he forecasts a turn toward nostalgia, he expects that the most successful product offerings will deliver nostalgia with “a modern twist,” something he describes as “nostalgia-infused innovations.”

Dave Lundahl, CEO of behavioral insights firm InsightsNow, agrees with that assessment. “Brands that are both familiar and that provide ‘beneficial twists,’ will see the greatest growth,” he predicts. The Whole Foods Market Trends Council, for example, predicts that 2024 will bring new versions of ramen and other noodle meals that deliver on comfort and convenience, but with spicier seasonings and the addition of more exotic flavor varieties.

“Consumers aren’t taking big risks and are often choosing twists on comforting items they know and love, or nostalgic favorites that were due for a comeback,” says former Datassential Trendologist Mike Kostyo. “There’s a reason barbecue chicken wings were the fastest-growing single menu item of the past year: They are classic and comforting. Success in many segments will come from finding options that are still new and craveable to consumers, but in a flavor or format that is familiar.” He cites birria, which is one of the fastest-growing menu items that Datassential tracks, as an example. “The term was new to many U.S. consumers, but at the end of the day, it’s a meaty stew often served in a taco or burrito format,” says Kostyo. “[And] burrata was new to many consumers in name, but it’s basically a form of mozzarella. Options like that will do well.”

2) Tough Times, Tough Decisions

Pricing and value are of paramount importance to consumers, Kostyo continues. “While consumers had proven themselves to be pretty resilient in the face of higher prices last year, we’re starting to see some high-price fatigue,” he says. “They are feeling that sticker shock more. They have seen prices staying stubbornly high for months, and their savings are being depleted just as they are preparing to spend more as kids go back to school and the holidays are on the way. They’re having those conversations about whether going out to a restaurant is worth it, or whether they need that brand-name product.”

“Food and beverage prices are high,” agrees consultant Amy Marks-McGee, founder of Trendincite. “Consumers are much more budget conscious, and those higher prices impact their behavior.”

Datassential research shows that one in five consumers expect that their financial situation will worsen in the future, and nearly half are cutting back on eating out because of budgetary concerns, Kostyo adds.

Brands that are both familiar and that provide ‘beneficial twists,’ will see the greatest growth.

“Every brand needs to have in-depth conversations about their perceived value proposition, and how they are communicating that to their customers,” Kostyo emphasizes. “It’s not just about low prices, either, and in fact, some of the lowest-priced options in the industry can be perceived as bad values. It’s about the total experience—from offering up affordable indulgences to creating social moments to surprising and delighting consumers with hospitality and unique ingredients and dishes.”

Consultant A. Elizabeth Sloan, president of Sloan Trends, predicts “continued cautious consumer spending” and “more limited experimentation” with new products in the months ahead. She highlights incremental growth opportunities for regional options, fusion foods, and limited-time offerings—the kinds of products that are likely to appeal to risk-averse consumers.

Trends forecaster Suzy Badaracco, president of Culinary Tides, also anticipates interest in wholesome, regional fare, particularly from small towns in the Midwest and Deep South. “Think pimento cheese, milk punch, Alabama white sauce, Michigan bumpy cake,” and more, she says. Products like these can add interest to a dining experience without breaking the budget, Badaracco points out.

“While inflation rates have lowered, consumers are spending about 30% more for groceries compared with 2019, leaving less in their wallets for discretionary spending,” says Darren Seifer, food and beverage analyst with advisory firm Circana.

Marks-McGee and Louis Biscotti, national food and beverage services leader for accounting and advisory firm Marcum, cite opportunities for the ongoing expansion of private label brands. “This trend will continue not only due to high interest rates and inflation but because consumer preferences have permanently changed,” says Biscotti, noting that brand power has significantly eroded. And in the meantime, Marks-McGee points out, “Generic brands have upgraded. Store brands and private label brands are competitive, including products, flavor profiles, and quality.”

3) Home-Centric Habits

By Circana’s calculation, 83% of U.S. consumers’ meals were purchased at retail (supermarkets, club stores, mass merchandisers, etc.) and prepared at home in 2019, before the pandemic moved consumers even further in the direction of at-home eating. That figure is now 86%, a level that’s remained consistent for the past two years, Circana reports.

“Many consumers are still working remotely either full time or part time, keeping them closer to their kitchens and pantries,” Seifer says. “Inflation is also making restaurant meals out of reach for many, particularly those with lower household incomes.” What’s more, he adds, eating out is likely to be a less appealing option for those who are feeling the pinch of recently resumed student loan payments. Loan payment resumption is estimated to impact about $10 billion in discretionary spending, Seifer adds.

“COVID changed the way we socialize,” says Williams of Innova Market Insights. Innova data indicate that while out-of-home dining occasions remain important to consumers, they’re enjoying more in-home occasions and looking for new ways to make them special. Williams reports that Innova anticipates that the shift to more at-home eating occasions will continue to include both meals prepared at home and food and drink delivered from foodservice venues, with the latter being more affordable than dining out in a restaurant.

Feeling insecure creates demand for clean label, local products and traditional recipes that feel safe—like something your grandmother used to make.

“Delivered-in was accelerated by COVID, and consumer drivers for this globally are around time and energy—‘too busy to cook’ and ‘when I’ve had a hard day/week’ as well as for special occasions like a ‘special family meal’ or ‘special celebration,’” Williams notes. “At the same time,” she continues, “for some consumers, cost, coupled with greater choice in special food to enjoy at home and more convenient options, is helping to drive the cooking from home trend.”

“Entertaining at home is becoming more event-sized” for young consumers, says Bliss of YPulse. “Themed dinners, complete with elaborate décor and dress-up, are filling social media. Young people will increasingly be spending on at-home events that mix food, drink, and activities that make them feel more carefree for a night,” Bliss predicts.

With the trend toward more at-home eating, consumers want to up their cooking game. Seventy percent of consumers surveyed by communications consultancy Ketchum said they wished they were better at cooking, reports Jimmy Szczepanek, managing director, consumer food. “Food and beverage brands that can crack the code with easy-to-follow and delicious ways to use their products will be rewarded,” Szczepanek says.

To support the transition to cooking more at home, consumers looked to new appliances to help them keep it convenient. Kitchen appliance sales skyrocketed in 2020 and 2021, Circana reports. Seifer adds that sales have softened, but appliance usage is still on the upswing. In 2020, just about 37% of households had an air fryer, but by 2023, that total had jumped to 63%, “making it one of the new staples of American kitchens,” Seifer says.

Data from the International Food Information Council (IFIC) underscore the way that consumers are prioritizing convenience. “Eighteen consecutive years of IFIC Food & Health Survey data show clear priorities for consumer food and beverage purchasing habits: Taste is king, followed by price, healthfulness, and convenience,” says Kris Sollid, senior director of nutrition communications. But the 2023 survey signaled a change, Sollid observes.

“Convenience is closing in on healthfulness,” says Sollid, noting that millennials and members of Gen Z are driven more by convenience than those in older cohorts. “We may soon see our first change in the rank order among these four food-purchasing factors since IFIC’s Food & Health Survey was first conducted in 2006,” Sollid says.

4) Wellness Redefined

Increased interest in convenience doesn’t signify a de-emphasis on health issues, however. Preserving and protecting health remain important goals.

“Health and wellness will be back and front and center on consumer minds in 2024,” says Sherry Frey, vice president, total wellness, at consumer intelligence company NielsenIQ, voicing an opinion shared by many of the experts who offered input for this forecast.

“The pandemic put a spotlight on health and wellness for many consumers, but then took a back seat this year [2023] due to inflation,” Frey explains. “Consumers’ view on wellness will continue to evolve, with some consumers continuing to focus on using ‘food as medicine,’ for existing ailments as well as for prevention.”

Research by Innova Market Insights supports the emphasis on prevention. Specifically, more than a third of consumers surveyed by Innova say that they want to be proactive about maintaining good health, and many are focusing on personal responsibility, leading Innova to include “prioritizing prevention” in the list of top trends it identified for 2024.

Taking a proactive approach to health is a goal for a growing number of consumers, consultant Sloan agrees. “Being the best you can be is the new motivation for healthy eating as shoppers look for foods and drinks that help ensure healthy aging, enhance appearance, and maximize everyday performance and mental health,” she observes.

Pandemic stressors put mental health in the spotlight, and it’s stayed there, Marks-McGee points out. “Food and beverages that support consumers’ mental health and wellness with mood-enhancing ingredients will gain popularity in 2024,” she predicts.

The way consumers think about dieting has shifted, Frey says, noting that there’s less emphasis on dieting per se and more of a focus on overall health maintenance and paying attention to key food attributes. “We’re seeing an expanded view of wellness and growth in areas such as digestive health, mental health, and specific women’s health needs,” she says.

At the same time, once popular diet trends such as gluten-free, keto, and paleo seem to be losing steam, IFIC’s Sollid says. More products that help consumers feel full, beverages that offer rapid hydration benefits, and teas made with gut health ingredients will be on consumers’ wish lists in 2024, Sloan adds.

5) Sustainability With Authenticity

A focus on sustainability isn’t new for either consumers or food companies. What will be new in the months ahead, however, is the fact that consumers’ expectations around sustainability have changed.

“Consumers are going to be a lot more discerning about sustainability claims,” says Rabobank’s Bailey. “There’s been what we call greenwashing, which is basically saying one thing and doing another. You say that you have a low carbon footprint on this product, but really you’re excluding parts of the supply chain that might be carbon intensive,” he observes.

“So I think we’re going to see more holistic analysis of the supply chain in food,” Bailey continues, “and we’re going to have claims around sustainability that are authentically measured and could be qualified with the consumer—and that the consumer trusts and believes in.”

Food and beverage brands that can crack the code with easy-to-follow and delicious ways to use their products will be rewarded.

Lundahl of InsightsNow shares that view, predicting strong demand for products that are “verifiably sustainable.” He adds that “election year rhetoric will promote foods sourced by verifiably more sustainable agricultural practices, such as upcycling, carbon neutral, and natural or organic.”

“The focus on sustainability will continue to be driven by increased consumer consciousness, certifications, and new regulations and reporting,” says Marcel Koks, industry and solution strategy director for food and beverage at Infor, a software company.

Mickie French, executive director, The Center for Food Integrity, notes that the center’s research shows consumers are demanding transparency when it comes to sustainability efforts, and in other areas as well. “As trust in government—and even scientific data—declines, consumers are looking to companies to fill that gap of information and to be fully transparent about how they do business,” says French.

The expectation of transparency “manifests itself in consumers asking for on-pack information,” French continues. “Even if they don’t actively access QR codes and additional information, they say that just having the information available makes them feel that the brand or company is more transparent and, therefore, trustworthy.”

Facing Forward

Looking to 2024—and back on the events of 2023—brings to mind the old adage that “change is constant.”

“Let’s face it, the world has changed. And it’s going to keep changing,” says Infor’s Koks. “Competition is increasing, and customers are changing their habits and demands. The companies that succeed will be the ones that embrace the change, invest in cutting-edge ways of thinking and doing business, and, in some cases, take the necessary risks to get the job done.”

It’s likely that some of that change will be stressful, and that creates opportunities for food and beverage marketers. “Brands have an opportunity to help consumers better cope with the inevitable uncertainties of life,” says Mintel’s Zegler, citing analysis by the research firm.

“Food and drink can be marketed as an accessible and affordable escape, reward, or source of nourishment,” Zegler continues. “2024 will be a time to promote the benefits of quietly enjoying a cup of coffee or putting away technology during a family dinner.”ft