The global food & beverage industry is closing out 2024 with a 2.6% increase in dollar sales and even a small gain (1.1%) in volume, according to Circana. For 2025, the market research firm predicts a 2-4% increase in dollar sales, 1.5-3.5% growth in price/mix and volume growth of 0-1%.
Value, with a heavy nod to private label, was noted in this year’s figures. “We’re noticing that channels offering everyday value have become more influential,” said Sally Lyons Wyatt, global executive vice president and chief advisor at Circana. “E-commerce solutions also are increasing convenience and price transparency, with online transactions now driving 35% of food and beverage dollar sales growth, despite holding only a 10% market share.
“We expect consumers to continue leaning into private label, which saw a 3% volume increase over last year versus a 1% decline from mainstream brands as they selectively choose premium brands (+3% volume) that deliver the right value.”
As expected, Circana said, price/mix growth in 2024 fell below historical averages as modest increases in base prices continue, countered by increasing promotion rates. Further contributing to average price changes, the mix of F&B products sold shifts as consumers trade down among existing products while many also gravitate to more premium innovation in new items. Retail volumes grew as the post-pandemic wind-down stabilized, and rising prices when eating out prompted consumers to shift some volume back to at-home consumption.
Uncertainty around potential new government policies introduces a wider range of possible effects on industry costs (e.g., proposed immigration legislation and tariffs, which impact wages, capacity and import costs). Retailers and manufacturers face both stressed margins and increased public scrutiny on grocery prices, requiring them to balance value and incremental offerings.
“We’re seeing a shift from out-of-home dining, where traffic has fallen by 2%, to in-home meals, which rose by 1% in volume,” Lyons Wyatt continued. “Shopping patterns are also changing, with consumers making more trips, up 8.9%, but buying fewer items per trip — as much as an 11% decline — and shopping more perimeter categories (+2% volume) versus center-store (+0.6%).
“As consumers adopt more selective buying habits, they purchase and stock up on some products less often, delay certain purchases, and switch to alternatives as they reassess spending from necessity and make more room for discretionary items.”
Circana’s outlook is based on consensus from macroeconomists and its own algorithms. It assumes a moderate slowdown in economic conditions, including softer growth in 2025 than in 2024 for gross domestic product (GDP) and disposable income, a slightly weakening job market, and stable consumer confidence.
If economic conditions outperform expectations, there may be a slight decrease in volume growth as consumers dine out more, coupled with a stronger price/mix driven by demand for premium experiences. Conversely, weaker-than-expected conditions could reinforce in-home meal preferences but reduce willingness to pay for premium products.