Circana has released new Circana Compass insights, providing a comprehensive update on the 2024 performance of the global retail food and beverage (F&B) industry and an outlook for 2025.
Following Circana’s forecast for 2024 from a year ago and the recent midyear update, the market has mainly trended as predicted. Overall, dollar sales have grown by 2.6 percent, price/mix by 1.6 percent and volume sales by 1.1 percent in 2024.
As expected, price/mix growth in 2024 fell below historical averages as modest increases in base prices continue, countered by increasing promotion rates. Further contributing to average price changes, the mix of F&B products sold shifts as consumers trade down among current products while many also gravitate to more premium innovation in new items. Retail volumes grew as the post-pandemic wind-down stabilized, and rising prices when eating out prompted consumers to shift some volume back to at-home consumption.
Circana Compass: growth opportunities
While market volumes improved in 2024 versus 2023 and consumers remain tethered to more at-home spending, dynamics within retail F&B are challenging and will continue to moderate overall growth ahead.
“Consumers are driven by a demand for value, impacting both volume and price/mix growth,” said Sally Lyons Wyatt, global EVP and chief advisor at Circana.
“We’re noticing that channels offering everyday value have become more influential. E-commerce solutions also are increasing convenience and price transparency, with online transactions now driving 35 percent of food and beverage dollar sales growth, despite holding only a 10 percent market share. We expect consumers to continue leaning into private label, which saw a 3 percent volume increase over last year versus a 1 percent decline from mainstream brands as they selectively choose premium brands that deliver the right value.
“At the same time, unscripted consumer behaviors add complexity to the market dynamics. We’re seeing a shift from out-of-home dining, where traffic has fallen by 2 percent, to in-home meals, which rose by 1 percent in volume. Shopping patterns are also changing, with consumers making more trips, up 8.9 percent, but buying fewer items per trip – as much as an 11 percent decline – and shopping more perimeter categories versus center-store. As consumers adopt more selective buying habits, they purchase and stock up on some products less often, delay certain purchases, and switch to alternatives as they reassess spending from necessity and make more room for discretionary items.”
Circana Compass: 2025 predictions
Circana anticipates the F&B industry will see an increase between 2-4 percent in dollar sales in 2025. Price/mix will grow between 1.5-3.5 percent, reflecting continued modest base price inflation, stabilizing promotion levels and ongoing demand for value, including more premium benefits at the right price. Uncertainty around potential new government policies introduces a wider range of possible effects on industry costs (e.g., proposed immigration legislation and tariffs impacting wages, capacity and import costs) and requires careful monitoring to plan accordingly. Retailers and manufacturers face both stressed margins and increased public scrutiny on grocery prices, requiring them to balance value and incremental offerings.
Volume sales growth will likely range between 0-1 percent as we expect continued strength for at-home occasions with foodservice traffic improvement (e.g., more employees returning to the office). Ongoing channel migration and the shift in shopping behaviors with a value mindset will likely continue shifting where the volume growth opportunity sits.
Circana’s outlook, based on consensus from macroeconomists, assumes a moderate slowdown in economic conditions, including softer growth in 2025 than in 2024 for gross domestic product (GDP) and disposable income, a slightly weakening job market and stable consumer confidence. If economic conditions outperform expectations, we may see a slight decrease in volume growth as consumers dine out more, coupled with a stronger price/mix driven by demand for premium experiences. Conversely, weaker-than-expected conditions could reinforce in-home meal preferences but reduce willingness to pay for premium products.
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Circana Compass: global outlook
Circana expects F&B value sales across the EMEA region to continue to grow around 4 percent in 2025, following a similar trend in 2024. This growth will be driven primarily by a 3 percent increase in price/mix, with unit sales expected to rise between 0-1 percent. An important trend in EMEA is the expanding presence of generic and private-label brands, accounting for 39 percent of F&B sales, up from 37 percent four years ago.
In the APAC region, Circana projects unit sales to trend upward by 1.6 percent, following a flat performance in 2024. This increase, combined with slowing price/mix trends, will drive 4 percent value growth in 2025, reflecting a positive outlook for consumer confidence, driven by anticipated interest rate cuts and a gradual shift in spending from foodservice to retail.
Circana’s F&B outlook is developed using econometric demand models leveraging Circana’s Demand Forecasting Platform. More than 100 variables are analyzed to test hypotheses for each model, supported by a machine-learning algorithm and over 500 random forest models to determine the most important causal factors. Forward-looking input variable assumptions are developed using historical trends and insight from industry experts. This platform allows Circana to run scenarios and estimate future sales, breaking them down by their driving factors.
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