Consumer consumption patterns are forcing major food companies to evolve to meet consumer needs.
New research from The NPD Group has revealed that evolving attitudes and behaviors have caused a shift in which foods and beverages consumers choose. Fewer dishes and ingredients are being used in meal preparation, and the number of food and beverage occasions are flat among U.S. consumers. Major food companies are now scrambling to meet these changing needs.
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 that 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 three-part meal, according to NPD’s food consumption research. 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. Overall, the number of food and beverage occasions consumed by the average American is flat.
“This means that food manufacturers and foodservice operators are increasingly competing for a larger share of a smaller food and beverage pie,” said 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.”
Another equally menacing fact for food manufacturers and retailers is consumers’ increasing demand for purity in their foods and beverages. Consumers are avoiding adulterated elements and looking for natural and fresh foods 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 Millennials’ 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.
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% being part of a minority race or ethnic group. Even more diverse are those Americans younger than five years old with 50% 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,” said 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.”
