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CHICAGO — The global food and beverage (F&B) industry saw modest sales gains in 2004, according to the latest Circana Compass insights report, which provided a cautiously optimistic outlook for 2025.
Dollar sales in the F&B sector rose by 2.6% this year, driven by a 1.6% increase in price/mix and a 1.1% boost in volume sales. The trends closely align with Circana’s earlier forecasts, reflecting stabilizing post-pandemic dynamics and shifting consumer behaviors.
While price/mix growth slowed compared to historical averages due to rising promotional activity and selective consumer spending, retail volumes saw modest growth as consumers gravitated back to at-home meal preparation. This trend was bolstered by escalating costs in the foodservice sector, which saw a 2% decline in traffic compared to a 1% volume increase for in-home meals.
“Consumers are driven by a demand for value, impacting both volume and price/mix growth,” said Sally Lyons Wyatt, global executive vice president and chief advisor at Circana. “Channels offering everyday value are gaining influence, while e-commerce continues to expand its role, now accounting for 35% of food and beverage dollar sales growth despite holding just a 10% market share.”
Private-label brands also saw notable gains, with a 3% increase in volume compared to a 1% decline for mainstream brands. Consumers selectively embraced premium products, driving a 3% volume increase in this category as they sought a balance between quality and cost.
Circana’s insights also highlight shifting shopping behaviors. Consumers made 8.9% more trips to grocery stores but purchased up to 11% fewer items per trip. Volume growth was concentrated in perimeter categories like fresh produce, which rose by 2%, compared to a marginal 0.6% increase in center-store items.
Looking ahead, Circana projects dollar sales growth of 2.0% to 4.0% in 2025, with price/mix increasing by 1.5% to 3.5%. Volume sales are expected to grow between 0% and 1%, as at-home meal occasions remain steady and foodservice traffic improves with the continued return to office work. However, macroeconomic uncertainty, including potential new government policies on immigration and tariffs, could create challenges for the industry.
Circana’s analysis anticipates that economic conditions in 2025 will moderately weaken, with slower GDP growth, a softening job market, and stable consumer confidence. In a stronger-than-expected economic scenario, consumers may opt for more dining-out experiences, which would drive premium product sales. Conversely, a weaker economy could reinforce in-home dining preferences, potentially dampening demand for higher-priced items.
Regionally, Circana forecasts 4% value growth in the EMEA market for 2025, driven by a 3% increase in price/mix and flat unit sales growth. Private-label brands continue to expand their share in this region, accounting for 39% of total F&B sales. In the APAC region, unit sales are expected to climb by 1.6%, fueling a 4% value growth amid improving consumer confidence and a shift from foodservice to retail spending.
Circana’s projections are based on advanced econometric demand models leveraging over 100 variables and machine-learning algorithms to analyze market trends and identify growth drivers. These insights help retailers and manufacturers navigate the complexities of consumer behavior and capitalize on emerging opportunities in a dynamic market landscape.
