Circana Forecasts Uptick In Food, Beverage Volume In 2024
The food and beverage segments could see modest volume increases in 2024 as inflation is expected to ease “considerably” in the New Year, according to a new report from Circana.
New data from the consumer research firm’s 2024 Food & Beverage Outlook predicts a more favorable landscape for consumers in the coming 12 months as headwinds that weighed down 2023 are expected to recede. Research also shows that several factors will impact food and beverage growth in 2024, which includes 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.”
Circana research indicates that specific departments are expected to lead the pack in volume growth. Among them are the beverage and deli sectors that are expected to outperform overall food and beverage unit sales in 2024.
One factor likely to drive beverage growth is an increase in health-conscious consumers seeking more protein and energy options in their diet. Another likely factor fueling beverage sales increase is continued innovation, which recently has delivered excitement and encouraged category exploration.
In the deli aisle, convenient grab-and-go options are expected to continue driving 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 officials said its research indicates that perimeter aisles will need to optimize turnkey 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, Circana said.
Circana’s 2024 Food and Beverage Outlook was developed using econometric demand models leveraging Circana’s Demand Forecasting Platform. More than 100 variables were analyzed to test hypotheses for each model, supported by a machine-learning algorithm and more than 500 random forest models to determine the most important causal factors.
