With volume sales of many food and beverage products fairly stagnant across many Western European markets, encouraging consumers to trade up to higher-value products remains the key way for multinational food and drink firms to grow their sales in this region. However, relying on this trend puts firms in a precarious position, as consumers are also able to trade down when they are feeling stretched financially. This means that the Western European food and drink producers are in no way immune to the effects of a global economic downturn.
Business Monitor International's (BMI) U.S. Deep Recession scenario attempts to examine the impact a severe and prolonged economic downturn in the U.S. during 2008 and 2009 would have on the global food and drink industry. Although this event is not part of BMI's core scenario, it remains a possibility and is worth modelling as the effects would be so sizable and far reaching.