CHICAGO — Modest food and beverage growth is likely to take place next year following three consecutive years of volume decline, according to Circana's 2024 food and beverage outlook.
The categories are likely to experience a more favorable landscape as certain challenges from 2023 are expected to recede, the marketing firm said.
High inflation is anticipated to ease considerably in the year to come, and the impact of increased mobility on retail food and beverage consumption will likely be less pronounced, according to the forward-looking outlook, which offers insight into the likely performance of the food and beverage industry throughout 2024.
Additionally, Circana research indicates that several factors will impact food and beverage growth throughout the year, including an improving macroeconomic environment and growing promotional investments.
"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, executive vice president and practice leader, Circana. "With continued innovation and adaptability, retailers and manufacturers will be poised to position themselves for success in the coming year and beyond."
Certain departments are expected to lead the pack in volume growth. Circana predicts that the beverage and deli sectors will continue to outperform overall food and beverage unit sales in 2024. One factor driving this trend is an increase in health-conscious consumers seeking more protein and energy options in their diet, as well as increased innovation in beverages, which has boosted consumer excitement and encouraged category exploration.
Convenient grab-and-go options will also likely continue driving sales as consumers prioritize meal options that address diverse needs. Shifting consumer preferences in other departments will likely put pressure on unit growth, according to Circana, which advises retailers to optimize turnkey options for on-the-go customers.
Additionally, consumers will likely turn to the center store for solutions that deliver convenience, quality and value.
Circana's 2024 food and beverage outlook was developed using econometric demand models leveraging Circana's Demand Forecasting Platform. Forward-looking input variable assumptions were developed using historical trends and insight from industry experts, the company said.
Chicago-based Circana serves as an advisor on the complexity of consumer behavior. Through advanced analytics, cross-industry data and subject matter expertise, Circana provides insights and research that helps clients unlock business growth.