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Food, Beverage Bounce-Back Expected

An improving macroeconomic environment and growing promotional investments indicate that food and beverage will grow throughout next year, according to Circana's 2024 Food and Beverage Outlook report. It predicts modest volume growth after a three-year decline in the category.

High inflation is anticipated to ease next year, helping to promote food and beverage sales.

“Amid shifting consumer preferences and evolving market dynamics, our food and beverage outlook not only highlights key growth opportunities for 2024 but reveals a cautiously optimistic outlook as we emerge from a myriad of challenges that the industry has faced over the past several years,” said Sally Lyons Wyatt, EVP and practice leader of Circana, in a statement. “With continued innovation and adaptability, retailers and manufacturers will be poised to position themselves for success in the coming year and beyond.”

Circana predicts the beverage and deli sectors will carry on outperforming overall food and beverage unit sales in 2024.

One factor likely driving beverage growth is an increase in health-conscious consumers seeking more protein and energy options in their diet. Additionally, beverage has had more innovation than other departments, which helps encourage category exploration.

In the deli aisle, grab-and-go options will likely continue driving sales as consumers prioritize meal options that address diverse needs. Shifting consumer preferences in other departments throughout the store will likely put pressure on unit growth.

To succeed in 2024, Circana suggests that perimeter aisles will need to optimize turnkey options for on-the-go consumers. In the frozen department, assortments should be reevaluated both in-store and online to ensure a variety of products are available to meet consumers’ needs, according to the research firm. Consumers will likely look to the center store for solutions that deliver convenience, quality, and value.

Related: Retailers Tout Deep Thanksgiving Discounts; US Grocery Coffee Sales Drop