11/07/2023

Food and Beverage Poised for More Promising 2024: Report

Circana researchers anticipate improving conditions and highlight areas for optimizing sales

Senior Editor

With fewer headwinds, grocers and CPGs can expect moderate growth in 2024, Circana's data shows.

In the often-turbulent 2020’s, the term “cautiously optimistic” is likely to be welcomed by retailers and CPGs who have faced a cascade of challenges over the past few years. That’s one of the market predictions from market insights firm Circana (formerly IRI and NPD), which released its food and beverage outlook for 2024.

Using advanced data to shape its projections, Circana reported that modest volume growth in the sector is expected in the coming year following three straight years of volume declines. That growth is set to be fueled by easing inflation and greater industry investment in promotions. The success of specific categories will also play a role in lifting overall performance, according to Circana.

For example, the company’s data shows that beverage and deli categories in particular will continue to outperform overall food and beverage unit sales in 2024. In beverage, health-conscious consumers will seek more protein and energy drinks, while other beverage makers continue to focus on new product development.

Meanwhile, the deli category is benefiting from a boom in grab-and-go offerings, with consumers back to searching for convenience and variety. Circana also pinpointed trends and opportunities in other parts of the store, noting that perimeter aisles will need to enhance options for on-the-go-consumers, while center store and frozen departments can also be revaluated to deliver on convenience and a more diverse assortment.

Sally Lyons Wyatt, EVP and practice leader at Circana, said that inventiveness and changing market dynamics bode well for many industry stakeholders. “With continued innovation and adaptability, retailers and manufacturers will be poised to position themselves for success in the coming year and beyond,” she remarked.

Circana leveraged its demand forecasting platform to make the predictions, analyzing more than 100 variables. Researchers were able to run scenarios and estimate future sales, breaking them down by driving factors.