Just in time for Thanksgiving and the holidays—came news for which food and beverage processors could be thankful. Circana (formerly IRI) and The NPD Group released a 2024 food and beverage outlook with a projection of modest volume growth this year after three consecutive years of volume declines.
“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 Sally Lyons Wyatt, Circana executive vice president and practice leader. “With continued innovation and adaptability, retailers and manufacturers will be poised to position themselves for success in the coming year and beyond.”
In an earlier May 2023 release, Circana noted that 86% percent of annual eating occasions are sourced from grocers and other retail outlets. Officials said the figure shows at-home spending remains a more significant portion, 60%, of food and beverage sales. Looking ahead, Circana predicts the beverage and deli sectors will continue outperforming overall food and beverage unit sales in 2024.
One factor likely driving beverage growth is an increase in health-conscious consumers seeking more protein and energy options in their diet. Circana analysts note that beverage also has shown “more innovation than other departments, which delivered excitement and encouraged category exploration.” In the deli aisle, convenient grab-and-go options will drive sales as consumers prioritize meal options that address diverse needs.
Shifting consumer preferences in other departments throughout the store will likely put pressure on unit growth. To succeed in 2024, Circana believes perimeter aisles will need to optimize turn-key options for on-the-go consumers. In the frozen department, assortments should be reevaluated both in-store and online to ensure a variety of products are available to meet consumers’ needs. Consumers will likely look to the center store for solutions that deliver convenience, quality, and value.
Last June, Circana also addressed the topic of innovation with the company’s 2022 New Product Pacesetters, an annual look at leading new product launches in food and non-food categories. As ranked by first-year sales, Circana’s top 10 food and beverage honorees were Alani Nu, Dr Pepper Zero Sugar, Chick-fil-A Sauces, Truly Punch, Truly Margarita Style, Mtn Dew Spark, Tattooed Chef, Red Bull Green Edition, Gatorlyte, and Topo Chico Hard Seltzer.
“Consumers have a big appetite for new products, and the 2022 Pacesetters represent companies and brands that satisfy genuine needs and desires with focused, strategic approaches,” said Joan Driggs, vice president, Content and Thought Leadership, Circana. “Manufacturers and retailers that prioritize innovation are more likely to drive sales and foster loyalty.”
Circana said its report “illustrates the enduring power of CPG innovation, revealing that consumer spending on new product offerings remained elevated last year despite challenges surrounding high inflation, supply chain adjustments and ingredient costs.” The 2022 New Product Pacesetters achieved a staggering $6.8 billion in combined year-one sales across food, beverage and non-food solutions, compared to $6 billion in 2021 Pacesetter sales.
What are the new flavor, functions and product forms making headlines on today’s shelves? In assembling this year’s State of the Industry New Product Annual, it’s clear the Prepared Foods’ six “power trends” appear in every category. Those trend topics include plant-based products, natural and organic products, sugar reduction, added protein, immunity, and sustainability.
Read on for a category-by-category look at the trends and tastes powering new foods and beverages!
