TRENDS FOR THE FOOD AND DRINK INDUSTRY 2023

1.     CONSUMER BEHAVIOUR & THE COST OF LIVING CRISIS

Positives:

Recent research indicates the following positives:

  • 45% of consumers consider eating and drinking out a fundamental activity of theirs.
  • Around 2 in 3 adults (64%) recently said despite the cost of living crisis they would find it difficult to stop eating and drinking out.
  • 7 in 10 people say eating and drinking out is still the treat they most look forward to.

Negatives:

  • 83% of UK adults have less disposable income as a result of the cost of living crisis.

2.     KEY DRIVERS BEHIND THE 2023 TRENDS

  • The ever-growing health trend – with new legislation on HFSS products as well as a widely shared Government aim to reduce obesity, there will be pressure on producers to provide low calorie options.
  • As noted above, the cost of living crisis in impacting consumer behaviour – despite considering eating and drinking out a ‘fundamental activity’ consumers are having to become more mindful about how they spend their money, going out less frequently than they would typically do.
  • Protecting the planet has become a real priority for many people, again enhanced by Government pressure and new legislation driving organisations to become more transparent about their sustainability goals and initiatives.
  • The legacy of the pandemic – many peoples lifestyles and routines have changed – hybrid and remote working are commonplace, routines less rigid, eating and drinking out venues are used for work as well as leisure and finally our nation has become more experimental with food and drink as a result of the many on line sessions by chefs and food and drink producers.
  • Social media use – this continues to boom with half the UK population using Instagram and 7 in 10 using Facebook. Over 2 in 5 Instagram users (38%) follow food and drink influencers and over 1 in 3 (36%) follow producers or hospitality outlets official accounts.  This puts pressure on producers to offer ‘insta worthy’ recipes, drinks or experiences.
  • More choice – ongoing innovation means consumers are faced with new concepts, brands, formats and flavours so it is increasingly difficult to stand out from the crowd.

 

3.     CONSUMERS CONSCIOUS CHOICES

There are four factors affecting consumer choice in terms of food and drink experiences:

  • The calorie conundrum 
  • Cost matters
  • Mindful drinking
  • Sustainable choices

Consumer’s will consciously weigh up the above when considering choices, depending on  their priorities – this could be a desirable reduced calorie option, a low cost option, drinking in moderation (another growing trend) or generally making sustainable choices.

13% of 18 – 34s say they typically drink non alcoholic alternatives when they go out, and engagement with non alcoholic alternatives amongst this group and 35 to 54 year olds has doubled since August 2020.

Consumers are paying more attention to labels, looking for food and drink that they perceive to be better for the environment. Consumers are embracing the Earth’s natural products, becoming more focused on sustainability and protecting the environment – this reinforces the desire for local and seasonal products as well as the demand for ethical and sustainable supply chains.

Foraged ingredients are no longer niche – 53% of UK adults say they find the idea of seeing foraged ingredients in products or on menus appealing.

4.     RETRO LOVE

Surprisingly there is also a strong trend for retro food and drink with consumers looking for well loved classics and re-vamped historical favourites which evoke a sense of nostalgia or novelty.  A sense of nostalgia is often driven by a need for comfort and stability in times of uncertainty and change.  Implications of Brexit, the pandemic, the Ukraine war and the current cost of living crisis are likely to drive this trend even further. Retailers have reported an increase in demand for retro foods and there is also evidence of excitement in the out of home market.  Bakeries and dessert shops are creating cakes around old confectionery and milkshakes and cocktail providers are joining the party.  The research supports this:

  • 57% of adults surveyed find the idea of nostalgic or retro themed drinks appealing with the same percentage for retro food.

5.     TRENDING SPIRITS

The two trending spirits for 2023 are clearly going to be tequila and rum (this trend started in 2021/2022).  Both spirits have grown in market share whilst the historical gin boom has begun to decline, with intense competition between the growing number of distilleries in the UK (820, up from 710 in 2020).

Signature serves – cocktails have also grown in value share of the market in the quarter leading to April 2022.  Within this market there has been a growth in demand for less mainstream, more unique cocktails.  37% of consumers say if they are opting for a cocktail when out for drinks they will always or almost always go for a signature cocktail if it is available.

 

6.     CONFECTIONERY – CHOCOLATE

As reported in the Grocer in September 2022, Confectioners are shrinking their bars to manage rising costs.  They predict that more of the same is coming.  Mondelez, owners of the Cadbury brand, reported to the Grocer that they have had to face significantly increased production costs – ingredients, energy, packaging plus rising inflation so its products are now ‘much more’ expensive to produce.  Sugar is up 34.6% on 2020 prices, fresh milk up 108% and cocoa beans are up by 9% (Mintec research August 22).  Not only are some manufacturers getting flack from shrinking pack sizes but the sector has increased prices by an average of 3-4% or 3p per pack across the market.  Shoppers are responding by buying at discounters with Lidl and Aldi turning in the strongest value growth.  Moving to hard discounters to cut costs is likely to be one the prime aspects of consumers ongoing behaviour in 2023.  Bucking the trend though, mints have defied the downturn, turning in take home growth of 5.8% on units up 3%.

 

Brand e Marketing

December 2022

Sources:  CGA Trading Index, CGA Cost of Living Consumer Pulse and CGA Proprietary Data sample -UK adults, CGA/Bidfood/Neilsen trends 2023, CGA Brand Track Mixed Drinks report, The Grocer and Mintec.