Circana, a leading advisor on the complexity of consumer behavior, 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%, price/mix by 1.6% and volume sales by 1.1% 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 existing 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.

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 executive vice president 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% of food and beverage dollar sales growth, despite holding only a 10% market share. We expect consumers to continue leaning into private label, which saw a 3% volume increase over last year versus a 1% decline from mainstream brands as they selectively choose premium brands (+3% volume) that deliver the right value.”

Circana anticipates the F&B industry will see an increase between 2% and 4% in dollar sales in 2025. Price/mix will grow between 1.5% and 3.5%, 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% and 1% 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. 

Circana’s F&B outlook is developed using econometric demand models leveraging Circana’s Demand Forecasting Platform. Over 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.

About Circana 
Circana is a leading advisor on the complexity of consumer behavior. Through superior technology, advanced analytics, cross-industry data, and deep expertise, we provide clarity that helps almost 7,000 of the world’s leading brands and retailers take action and unlock business growth. We understand more about the complete consumer, the complete store, and the complete wallet so our clients can go beyond the data to apply insights, ignite innovation, meet consumer demand, and outpace the competition