Circana Growth Insights Circana

As inflation continues to press consumers, volume sales are down across food and beverage. Amid economic headwinds and a return to pre-pandemic activity levels, consumer behaviors are changing, but we are not consuming less. Circana thought leaders David Portalatin and Alastair Steel explain how shifting behaviors are illustrating new patterns in consumption across retail and foodservice.  
Highlights:  
Food inflation might be easing, but we’re still paying around 30% more for retail food and beverages than we were pre-pandemic. As consumers trade down, they are also buying smaller amounts to avoid waste.  
Where disinflation is seen in retail, it’s not occurring in foodservice, where the price of a meal is more than 4 times that of food sourced from retail. Still, growth can be seen for the morning and afternoon dayparts and at quick-service restaurants.
Consumers are looking for deals. Restaurant apps are helping get diners in the door and feeling good about the value on offer. At retail, coupons are coming back, but not at depths that are motivating shoppers.  

Circana has undertaken an extensive audit of America’s kitchens, recording what’s in our pantries and refrigerators, and inventorying appliances, cookware and utensils. Findings, found in the new report, Inside America’s Kitchens, reveal that we’re stocking far fewer food items than in 2020, yet we’re making good use of tools in our meal prep. Darren Seifer, Circana Food & Beverage Industry Analyst, shares insights into behavioral changes and generational differences.  
Highlights:  
With the inflation of 2023, consumers are pulling back on impulse purchases and doing their best to avoid waste. There are an average of 10% fewer pantry items in 2023 than there were in 2020.  
Convenience is a priority for all consumers, but how we realize it differs, often based on our ability to pay for speed, great taste, fresh offerings and customization.  
While coffee is nearly ubiquitous across households, there are dramatic generational differences in how it’s prepared. Generation is an indicator of other food items, as well, with older consumers more likely to have staples like cooking oil and canned tomatoes, while the youngest households are more likely to have pasta sauce and pasta on hand.    

Inflation may be easing, but consumers are still paying dramatically higher prices than two years ago, and face increasing pressure resulting from the additional SNAP benefits that expired earlier this year, forthcoming student loan repayments and increasing credit card debt. Still, consumers of all household incomes are finding affordable escapes or rewards and easy entertaining ideas, courtesy of fresh foods. In this Fresh Pulse episode, Jonna Parker, principal of Circana’s Fresh Center of Excellence, and Anne-Marie Roerink, president of 210 Analytics, discuss macroeconomic pressures, why even cash-strapped consumers are making choices based on “and” not “or,” and the importance of connecting with the right shoppers with the right products.  
Highlights 
The pinch of inflation continues to hurt, but fresh offerings can lean in by defining their “value” to the shopper. Across household income groups, value doesn’t equal lowest price.  
Shopper trips are up but baskets are smaller than two years ago, with consumers visiting more retailers to fulfill their needs. Too many retailers and brands are focused on high-spending boomers, often without realizing the changing behaviors of this group. It’s time to look to where growth will come from.  
Along with more frequent, small trips in-store, online shopping appeals to those wanting to stick to a budget. Both work against in-store discovery, meaning marketers must work harder to showcase new delights and solutions.  

Kristen McClean, executive director, industry analyst, Circana Books & Entertainment, describes books as “ideas wrapped up for sale.” When we study the books people buy, we learn about their thoughts and their shifting attitudes over time. This understanding helps us better meet changing consumer preferences.
Highlights:
Books reveal the radical changes that are taking place as we find our post-pandemic normal, including a return to work, experiential travel, and increasing interest in physical well-being.
These interests, in turn, will affect product innovation, marketing strategies, and the influencers and social platforms consumers engage with.
Sales of fiction books are up for three consecutive years, including romance, fantasy, and escapism, which are causing a ripple effect across the CPG, toys, and entertainment industries. “Kidults” might be driving more toy sales, but marketers of all products should take note of their child-like preferences.
 

Easing inflation is making headlines, but consumers remain challenged by high prices. In this Fresh Pulse episode, Jonna Parker, principal of Circana’s Fresh Center of Excellence, and Anne-Marie Roerink, president of 210 Analytics, discuss consumer behavior, macroeconomic challenges, and why plus-one purchases are undervalued.  
Highlights: 
Consumers are on the hunt for deals and will shop across multiple stores to find them. While trips were up, baskets were down around five units per trip in June 2023. 
Consumers’ value of their time has rebounded since the pandemic. As a result, hybrid meals are now the norm, with consumers leveraging freshly prepared retail options, restaurant offerings, and pantry staples to pull together meals.
Bakery items epitomize the value of a plus-one purchase, as consumers look for affordable items to brighten lunchboxes, reward small accomplishments, or elevate meals. Retailers should encourage extra purchases through their apps.   

Consumer tech purchases for school, work, and entertainment were high during the pandemic. Tech items also have a long lifecycle, with replacements occurring on average every four years. The net result is a sluggish consumer tech industry in 2023. Circana’s Mike Crosby, executive director, industry advisor for commercial and consumer technology, and Paul Gagnon, vice president, industry advisor, consumer technology, share their outlook on the consumer tech market for the remainder of 2023 and into 2024.  
Highlights:  
Most tech sales take place at the end of the year, from back-to-school season through the winter holidays. Retailers and manufacturers should use digital platforms to encourage consumers to shop in store, an easier place to showcase wares and adjacent products.  
Innovation in consumer tech took a back seat to production during the pandemic. Look for the innovation pipeline to fill again at the close of 2023 and into 2024. There’s excitement around AR/VR as Meta ups its game and Apple enters the arena.
Consumers might be ready for tech upgrades and replacements, but budgets are tight. Many consumers will look for ways to extend the life of products they already own. Retailers and manufacturers should be prepared for the upcoming holiday season with optimal innovation or promotions — or both.