Consumer data firm Circana, formerly IRI & The NPD Group, has shared new details on inflation and consumer spending following the company’s Growth Summit, held in Las Vegas March 20-22.
Food inflation for the 12 months ending February 2023 was 10.2% at-home and 8.4% away-from-home. At- and away-from-home food and beverage sales grew 8% in 2022, a larger jump than previous years. At-home food spending remained a large portion of the food and beverage sales, 61%, which corresponds with the 86% of annual eating occasions sourced from grocers and other retail outlets.
At-home food and beverage sales were up 9% and reached $931 billion in the 52 weeks ending in December. Direct consumer foodservice spending was up 6% with $606 billion in sales for 2022.
"One of the behaviors consumers have historically used to manage higher food costs is trading down," said Cara Loeys, principal of CPG Client Engagement at Circana. "Consumers gravitate to larger pack sizes in the grocery store for a lower price per volume. They've also traded from premium to mainstay and value brands to get as much as possible without spending more. These behaviors are a correction from the pandemic when consumers, flushed with cash, purchased premium grocery items."
While 2022 was about value pricing to manage budgets, David Portalatin, food and food service industry advisor at Circana said that 2023 will be about the other attributes that play into value.
"Price will always be important, but consumers define value differently. For example, consumers who visit a restaurant aren't necessarily looking for the cheapest meal," he said. "They're looking for the menu items they crave or foodservice outlets that offer quality and variety and enable them to treat themselves."