The news has been tough to interpret lately. On the one hand, we have just seen several earnings reports where F&B giants like PepsiCo and Coca-Cola have reported resilient demand for products despite price increases — and have indicated that prices may go even higher. On the other, several consumer surveys have shown that people are feeling the pinch at the grocery store.
Adding to the latter body of work is a new survey commissioned by Ingredient Communications showing that almost all (97%) of U.S. consumers have noticed price increases on food and beverage products in the past three months.
As a result:
- 50% have purchased a food or beverage product less often, up from 38% last December
- 62% said they had switched to a cheaper brand, compared to 58% last year
- 21% said they had stopped purchasing a product altogether, roughly in line with the results from last year
Richard Clarke, Managing Director of Ingredient Communications, said: “Since we conducted our first price sensitivity survey, the war in Ukraine has exacerbated an already volatile situation. As well as difficulties sourcing certain raw materials, fuel costs have gone through the roof. With winter on the way in the western hemisphere, and no sign of Russia backing down, demand for energy will spike and it’s hard to see any short-term easing of the inflationary pressures that food companies and consumers are facing.”