Rising food prices are driving down volumes of food purchases across multiple categories, according to new data from IRI.
In its September report on food inflation, IRI examines which foods and beverages have shown high price elasticity. The most prominent examples include:
- Frozen dinners/entrées: Prices up 21% in August compared to August 2021; volume down 11% in August compared to last year.
- Cookies: Prices up 18% year-over-year in August; volume down 8.9%.
- Coffee: Prices up 18% YOY; volume down 6%.
- Cold cereal: Prices up 16% YOY; volume down 1.7%.
Not surprisingly, lower-income shoppers are responding with greater sensitivity to the situation. In 2021, consumers with less than $30,000 a year income accounted for 55% of the growth in grocery sales dollars; in 2022, that share is projected to be 25%. Stores in low-income areas are seeing sales volumes decline across multiple categories, especially frozen seafood, which was down 15% in the 12 weeks ending Aug. 7; candy, down 8%, and snack bars, down 6.4%.
There are some of what IRI calls “pockets of premiumization,” where volume sales for premium brands are increasing despite inflation. These include nut butter, up 13% in the 12 weeks ending Aug. 7; sports drinks, up 12%, and snack nuts and seeds, up 29%.
