Data released by Circana reveals that as of mid-2024, the food and beverage industry is showing volume growth of 0.8%, a price increase of 1.4%, and top-line growth of 2.2%, all closely aligning with the original forecast.
“Following several years of economic volatility, we’re now seeing signs of stabilization across various sectors, including food and beverage,” says Sally Lyons Wyatt, global EVP and chief advisor at Circana. “While we anticipated greater support from an improving economy, the shift from away-from-home to in-home consumption helped keep our projections on track. Manufacturers will need to strategically assess how to stimulate demand and drive profitable growth, and Circana provides the data-driven insights necessary to inform those decisions.”
Key takeaways:
- In November 2023, Circana forecasted that 2024 would signal a return to growth for the retail food and beverage sector after three years of volume decline. The projected volume increase of 1% that Circana anticipated was above historical norms, following a 1% drop in 2023, coupled with the historically low-price increase of 1.6%, down from 5.7% in 2023 and 11.4% in 2022. As a result, top-line growth was expected to slow to 2.3%, compared to 4.7% in 2023 and 9.5% in 2022.
- Inflation has eased across the food and beverage sector in 2024.
- The refrigerated and frozen segments have outperformed initial expectations, with refrigerated trailing only produce as a leading department in volume growth year-to-date. On the other hand, the seafood and liquor segments have experienced volume declines.
- Circana expects 2024 retail food and beverage growth in both EMEA and APAC to outpace that of the United States in terms of top-line growth, with both regions projected to achieve 4-5% growth. In APAC, this growth is anticipated to be entirely price-driven, with flat unit sales. In EMEA, the strength in top-line growth is primarily due to increased price realization, with volume growth comparable to U.S. levels.
- Looking ahead to 2025, Circana projects a slight uptick in top-line dollar growth, expected to be between 2.5-3.5%, driven primarily by increased price realization between 2-3%, while volume growth is anticipated to moderate between 0-1%.
“As we approach the end of 2024, we anticipate the year will close out near our mid-year projections. We expect volume growth will ease to 0.5-1%, with some potential softening later in the year as fast food ‘price wars’ could impact retail F&B growth, assuming current economic conditions hold. Year-over-year price realization is projected to increase slightly to 1.5-2%, driven by slowing promotional investments and the introduction of new price increases. This will result in overall top-line growth of 2.2-2.7% for 2024,” says Wyatt.
