Part 1 – Recession Trends: Fresh Food on the Chopping Block
The economy’s downward spiral has already claimed many jobs, houses and secure futures. Are our waistlines the next thing to suffer? As the world becomes accustomed to living under a gloomy economic cloud, more people are looking for ways to save – and unfortunately, fresh food seems to be the first thing ousted from America’s collective shopping basket.
Recent data show some expected consumer trends. Americans are eating out less and less, saving expensive meals for special occasions (Countries & Consumers, 2009; Lee 2009; Shea 2008). This has led to an increase in at-home dining and grocery sales – one of the few retail sectors currently expanding (3.1 per cent growth in 2009, compared with a 0.6 per cent decline across the retail market as a whole) (Talking retail, 2009). Major beneficiaries are lower-end stores who offer discounts and coupon deals, while more expensive stores are not enjoying the same boom. Consumers are more aggressively chasing deals, and are willing to go out of their way to find them. Statistics show that consumers are now more willing to “trade down” from value brands, and are opting for cheaper labels in staple items such as cheese, bread, milk and coffee. (Shea, 2008)
Unfortunately, the rise in home cooking has not led to healthier eating habits.
Reports suggest that amongst products on the rise are sugar-laden sandwich spreads, instant frozen/canned meals, salty snacks, butter/margarine, coffee, chocolate and pre-prepared side dishes (Lee, 2009). While dine-in restaurant profits are down, takeaway fast food sales were not as quick to fall, following aggressive marketing campaigns flouting bargain meals and convenience. (MSNBC.com, 2009)
It seems this is a worldwide trend (The Australian, 2009). Supermarkets in the UK have recorded a drop in fruit and vegetable sales by 7-8 per cent in the past financial year, while frozen pizza sales saw a six per cent rise, as did packaged chips by 12 per cent. (Metro.co.uk, 2009)
Not surprisingly, reports suggest that organic and fair trade and eco-friendly goods have also been shunned in favor of budget items. One report showed that organic food sales in 2008 finally slowed after a decade of steady growth, culminating in a record 15.8 per cent growth in 2007-2008 (Environmental Leader, 2009). Some organic farmers in the UK are currently seeking to cut the organic tag from their product to escape the dip in organic sales and the expenses organic production incurs. (Farming UK, 2008)
Are there other reasons behind the apparent backlash against healthy foods? Apart from the obvious savings, some reports suggest that consumers feeling the brunt of economic uncertainty may be looking for “comfort food” – foods that are filling, have longer shelf-life and may have a certain nostalgic familiarity (Dailey, 2009). Interestingly, several brands are tapping into the nostalgia trend, with Cadbury, Mars and some frozen dessert companies successfully re-releasing some classic, retro products. (Confectionery news.com, 2009; Food navigator.com, 2009)
Overall, it looks as though the average American consumer is choosing budget over green, and convenience over health. While it may seem like pre-packaged, processed foods are a cheaper, easier option, this doesn’t have to be the case.
Coming up in part two, we’ll look at why takeaway and processed foods aren’t necessarily cheaper/easier, explore some demographic statistics – are these trends consistent across different socio-economic groups? – and find ways to buy quick, healthy products without breaking the budget.
References
Confectionery news.com (Jul, 2009) Mars taps into nostalgia trend with Treets return. Viewed online 23 July 2009: http://www.confectionerynews.com/On-your-radar/Recession-effects
Confectionery news.com (Feb, 2009) Recession-hit consumers turn to Cadbury’s chocolate. Viewed online 23 July 2009:http://www.confectionerynews.com/On-your-radar/Recession-effects/Recession-hit-consumers-turn-to-Cadbury-s-chocolate
Countries and consumers (2009) FMCG and the recession – how are consumers of food, drink and tobacco products responding? Viewed online 23 July, 2009: http://www.euromonitor.com/FMCG_and_the_recession_how_are_consumers_of_food_drink_and_tobacco_products_responding
Dailey, K. (2009) Is the recession making Americans fatter? Viewed online 23 July, 2009: http://blog.newsweek.com/blogs/thehumancondition/archive/2009/06/01/is-the-recession-making-americans-fatter.aspx
Environmental Leader (2009) U.S. Organic Food/Bev Sales up by 17.1%. Viewed online 23 July, 2009: http://www.environmentalleader.com
Farming UK (2008) Organic farmers dump label in recession bid. Viewed online 23 July, 2009: www.farminguk.com
Food navigator.com (2009) Arctic roll and jelly come-back in recession. Viewed online 23 July 2009: http://www.foodnavigator.com/
Lee, A. for Fastcompany.com (2009) Who’s winning – and losing – in the food recession. Viewed online 23 July, 2009: http://www.fastcompany.com/blog/anne-lee/green-room/recession-proof-foods
Metro.co.uk (2009) Sainsbury’s plans 445m expansion after sales rise/Veggies chopped as the credit crunch bites. Viewed online 23 July, 2009: http://search.metro.co.uk/tag/food-sales.html
MSNBC.com (2009) Despite recession, McDonald’s sales still rise. Viewed online 23 July, 2009: http://www.msnbc.msn.com/id/31171643/
Shea, R. for Seeking Alpha (2008) Consumers shifting food purchase patterns into recession mode. Viewed online 23 July, 2009: http://seekingalpha.com/article/72113-consumers-shifting-food-purchase-patterns-into-recession-mode
Talking retail (2009) Grocery sector will be resilient in recession, says survey. Viewed online 23 July, 2009: http://www.talkingretail.com/news/industry-news/12085-grocery-sector-will-be-resilient-in-recession-says-survey.html
The Australian (2009) Consumer sentiment reflected in purchase power. Viewed online 23 July, 2009: http://www.theaustralian.news.com.au/business/story/0,28124,25583297-14741,00.html
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This is an interesting post. I wonder why people are moving towards packaged goods over fresh foods, fruits and vegetables? I would have imagined that fresh fruits and vegies are in fact cheaper. I wonder if it’s a comfort food thing – similiar to dropping exercise and good eating habits in times of stress. Could be worth a little exploration.
In addition one trend that I have also noticed is the move towards store branded, private label products. These are generally the same quality product at a cheaper price (5-20%). In an article about Wal-mart’s private label re-branding businessweek states that ¨skepticism toward store brand products is dissipating…64% of shoppers in 2008 said they often or always buy a store brand rather than a national one…that’s an increase of 59%¨
I’m sure this has something to do with economic times. It will be interesting if this behaviour sticks after the recession
http://www.businessweek.com/bwdaily/dnflash/content/mar2009/db20090316_585298.htm?campaign_id=msn
Mortgaging your health is never a bargain. The wife and I have actually been buying more fresh foods. We just make bigger batches and freeze the extra. The processed foods we do get though have to be thoroughly researched.