“The bottom line is that major food companies and retailers are faced with meeting changing consumer needs with processes and infrastructure that were built for the mass produced foods consumers craved a decade ago,” says NPD's David Portalatin.
Chiago (PRWEB) February 16, 2016
There is a confluence of changing demographics, economic pressures, and evolving consumer attitudes and behaviors creating shifts in the foods and beverages consumers choose, and as a result major food companies are scrambling to meet these changing needs, finds The NPD Group, a leading global information company that has been continually tracking all aspects of how U.S. consumers eat for over three decades. This unprecedented shift in consumer attitudes and behaviors have food manufacturers struggling to find growth in a changing marketplace where legacy brands are ceding share to smaller, new entrants and the store perimeter is outperforming center of the store.
Among the contributing factors to Big Food’s current dilemma is consumers’ increasing demand for purity in their foods and beverages. Consumers are avoiding adulterated elements and looking for natural and fresh food and beverages at grocery stores, and avoiding the processed foods on which many major food companies base their business. Fresh, limited processing and natural are desired characteristics particularly among Millennials. Given Millennial’s integration of fresh and natural foods into a healthy lifestyle and the fact that NPD’s 30+ years of eating pattern trend shows that consumption of fresh foods increases with age, the longer term outlook for fresh foods is strong based on a deep-dive generational study NPD is currently conducting.
Another equally menacing fact is that the number of food and beverage occasions consumed by the average American is flat, according to NPD. The number of dishes and ingredients used to prepare meals continues to decline as more one-and-two dish meals grow at the expense of the traditional 3-part meal. Consumers are also relying more on “healthy” portable snack foods to be a part of their breakfast, lunch, and dinners. Dinner has seen the greatest contraction in dishes and ingredients while breakfast has actually gotten a little more involved with the popularity of eggs.
“This means that food manufacturers and foodservice operators are increasingly competing for a larger share of a smaller ‘food and beverage pie,” says David Portalatin, vice president, food industry analyst at NPD. “This doesn’t mean that main meals, ingredients, condiments, and side dishes are going away, it just requires food manufacturers to reconsider the role of these items in the occasion and how these items can stay relevant to consumers’ new eating patterns.”
Generational and multicultural attitudes are also influencing U.S. consumer consumption patterns and the business of food. Millennials are more diverse than the generations that preceded them with 44 percent being part of a minority race or ethnic group. Even more diverse are those Americans younger than 5 years old with 50 percent being part of a minority race or ethnic group. By 2044, the U.S. Census Bureau projects that more than half of all Americans will belong to a minority group.
“The bottom line is that major food companies and retailers are faced with meeting changing consumer needs with processes and infrastructure that were built for the mass produced foods consumers craved a decade ago,” says Portalatin. “It’s now a battle for share of stomach but through acquisitions and American ingenuity, food companies have made progress over the past few years in finding white space, growth occasions, and new products.”
About The NPD Group
The NPD Group provides global information and advisory services to drive better business decisions. By combining unique data assets with unmatched industry expertise, we help our clients track their markets, understand consumers, and drive profitable growth. Sectors covered include automotive, beauty, consumer electronics, entertainment, fashion, food / foodservice, home, luxury, mobile, office supplies, sports, technology, toys, and video games. For more information, visit http://www.npd.com and npdgroupblog.com. Follow us on Twitter: @npdgroup.