Circana last month released its food and beverage outlook for 2024 and it was cautiously optimistic - predicting a promising year ahead.
The deli is predicted to be one of the greatest growth areas in terms of sales and consumer engagement in 2024.
The deli is an area of multiple “entry price points,” said Sally Lyons Wyatt, executive vice president and practice leader at Circana.
“Instead of having somebody slice it out, weigh it for you and hand it back, you have some pre-sliced meats that are at an entry price point that (the consumer) is willing to afford. You've got some of the prepackaged sandwiches and things like that that you can grab and go. So it made sense that the deli was winning with those things because it had a little bit for anyone,” she said. “We think every producer and manufacturer needs to be looking at entry point options as well as premium options. Those two are the ones we see growing. And again, it might need to take doing some work with consumers to make sure you have the right offering for the right price.”
“Dairy deflation will help hopefully increase volume. Refrigerated (foods) we think should have an opportunity to grow volume,” she said.
Circana has suggested that success in the frozen aisles will hinge on offering diverse product assortments and cautions that manufacturers and processors can capitalize in size shifts.
“We lost a little bit of that during COVID, when retailers and producers/manufacturers, everyone was just trying to get products out to get them on the shelf. We lost a lot of assortment. We lost a lot of size variety,” Wyatt said.
Wyatt said F&B companies would be wise to keep affordability front and center.
“The word that I keep using with everyone is ‘consumer shifts.’ They're still eating and drinking. They're shifting in the choices that they make on where they eat, what they eat, how they eat – all of it.
Circana’s 2024 food and beverage outlook was developed using econometric demand models leveraging Circana’s Demand Forecasting Platform. Over 100 variables were analyzed to test hypotheses for each model, supported by a machine-learning algorithm and over 500 random forest models to determine the most important causal factors. The models were finalized based on their best fit, significance levels, and intuitive insights. Forward-looking input variable assumptions were developed using historical trends and insight from industry experts. This platform allows Circana to run scenarios and estimate future sales, breaking them down by their driving factors.
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