Inside The Industry: Food and Beverage Consumer Trends for 2023

The cost of living crisis has caused industry wide disruptions, the most notable for the food and beverage industry being inflation in food and labour costs. According to Kantar Worldpanel data, in the 12 weeks leading up to October of last year, inflation of grocery prices hit a record high, with the average household facing a £643 increase in their annual bill. Alongside inflation, sustainability efforts continue to influence consumption habits. Let’s dive into the impact we’re likely to see.

Climate Responsibility

Climateresponsibility is now front of mind for consumers as they begin to feel the pinch caused by food shortages. According to Lu Ann Williams, global insights director at Innova Market Insights, ‘redefining value’ throughout the food and beverage industry will lead this year, as consumers ‘seek brands that listen, understand, and respond to their core values.’ She comments that consumers want brands that provide trust and confidence via their product formulations, communications, and wider sustainability actions. The Foodbytes 2023 Food Trends Report notes that consumers want to see more brands using sustainable packaging, limiting food wastage and engaging in upcycling efforts. We’re seeing big brands embracing this movement. In September of 2022 IKEA announced that it had managed to reduce food wastage by 54%, becoming the first major corporation to meet the UN’s 2030 goal. Sainsbury’s are among the supermarkets implementing further packaging reductions, announcing the removal of single-use plastic lids from its own-brand ranges, with lids on dips being the latest to go as of March this year.

Trust and traceability is proving to be equally as important as climate responsibility. Industry wide growing consumer distrust has highlighted the importance of brand trust this year. Within the food and beverage industry this will involve brands communicating, not only key product details and ingredients, but where the ingredients were sourced, how the product was produced and the conditions the product was produced in. In terms of growth opportunities, brands are likely to leverage advanced technologies like QR codes and blockchain to feature sustainability standards.

A desire for planet friendly menus featuring carbon labelling will be a key trend. A survey carried out by the Carbon Trust found that over two thirds of the ten thousand respondents stated they are more likely to think positively about a brand that could demonstrate it had lowered the carbon footprint of its products. However the challenge the industry faces is creating a unified approach to labelling.

Flexitarian Approach

Fueled by climate anxiety, conscious consumers continue to adopt a flexitarian approach to eating. On the second day of Veganuary this year, one person signed up every 2.4 seconds to eat a plant-based diet for the duration of January. Whatsmore, Unilever has noted that one in four people now identify as flexitarian. According to the 2022-23 Waitrose & Partners Food and Drink Report, 2022 saw people buying ‘less but better meat’ both for budget and health reasons. This trend is set to continue, though we are likely to see a greater decline in the consumption of traditional meat as opposed to an increase in plant-based alternatives. In the FoodBytes 2023 Food Trends Report, consumers cited price to be one of the top reasons for not continuing to purchase plant-based meat alternatives, finding them too expensive. However, 40% of consumers still plan to purchase plant-based meat substitutes in 2023, with millennials being the most likely. The report highlights how a clear and compelling message alongside products that are competitively priced and taste just as good as traditional meat will be key for this year. The 2023 Global Consumer Trends Report suggests that brands focus on real, simple ingredients as consumers desire whole-food health in plant based alternatives. Creating alternatives that are easy to prepare will aid in making these products more accessible, alongside clear narratives highlighting animal nutrition and welfare.