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Rising Prices Cause 42% of Consumers to Give up Favorite Food Brands
A sizeable 42% of consumers say they have given up favorite food brands because of rising prices and economic concerns, according to a study from Information Resources, Inc. that shows the lagging economy is driving a dramatic move back to basics and a reversal of decades-long trends for convenient and healthier foods.
The “IRI Times & Trends Special Report: Competing in a Transforming Economy” report finds that CPG prices are up 6.6% vs. 2006, with significant price increases in eggs, pasta, baby formula and milk:
Escalating prices have bred high price sensitivity, driving declining demand across multiple categories, growth in private label, trial of lower-priced brands and accelerated channel migration, IRI said.
Though changes in shopping and purchase behavior vary based on life stage and presence of children, those with lower-incomes report being the hardest hit:
- Roughly half of all consumers with incomes less than $55,000 per year say they have trouble affording the groceries they need.
- Nearly a quarter of those earning between $55,000 and $99,000 also say so.
- Among those with incomes over $100,000, 16% report having trouble.
As a result, consumers are increasing purchases of basic ingredients and meal components, reducing restaurant spending and decreasing purchases of “non-essentials”:
- 53% of consumers report that they are cooking from scratch more now than they were six months ago.
- About 59% say they are buying fewer single-serving products.
- 55% say they are buying fewer prepared meals.
- 52% say they are buying fewer organic products.
- Stores are seeing a resurgence in sales of frozen foods, perishables, and “center-store” items.
- Private-label products show strong gains, with 50% of consumers saying they have stepped up their spending on such products in the last six months.
