MIDA, the Marketing, Industry and Food Distribution Chamber, recently offered its members the results of a study on the situation of the industry. The study included a survey of 28 industry leaders who delved into the impact that demographic changes are having on the purchase and consumption of food.
It is quite obvious that a declining population results in lower total food consumption. However, total population changes understate the impact on the food industry since age is also important. Older adults eat less than growing adolescents.
Smaller families are resulting in a lower average ticket price at the counter. A family of four persons will have an average ticket price that is higher than two families, each composed of a couple.
As a higher percentage of the population retires and collects Social Security, food purchases increase in the period immediately after the 3rd of each month, after these people receive their Social Security payments. In contrast, when people are in the labor force, they collect weekly, bi-weekly or twice-a-month payments, and thus, their food purchases are more spread out throughout the month.
Retirees also have more time to review the shopper sales and check out for discount coupons. Thus, there is more “cherry picking” of different stores in order to take advantage of lower prices.
Food is now sold in smaller sizes, like the recent reduction from 2-liter soda bottles to 1.5 liters.
New flavors are targeting adults and occupying a larger share of total shelf space. For example, total shelf space for cereals may be the same, but sugary cereals are giving way to cereals targeting adults, such as those with high fiber content. Beverages traditionally targeted to a young crowd are now carrying flavors like ice tea.
Healthy products are increasing in appeal. Thus, chicken is gaining on red meat. Fruits and vegetables are growing in popularity, albeit their high cost acts as a restraint. Products such as low-salt beans and beverages with no-sugar added still command a low market share, but they are here to stay.
In theory, demographic changes are important. In the food industry, they are destiny.