While inflation is more moderate for food away-from-home (7.6 percent vs. a year ago*) compared to food-at-home (13.1 percent vs, a year ago*), the typical away-from-home eating occasion still costs 3.4 times more than in-home food sourced from retail.
To offset rising food costs, consumers are choosing to bargain hunt when grocery shopping, eating more meals at home and cutting back on restaurant visits, according to Information Resources, Inc. (IRI) and The NPD Group (NPD), both of whom recently merged to create one global technology, analytics and data provider.
The nearly $1.5 trillion at- and away-from-home food and beverage market is forecast to grow around eight percent in 2022, with at-home food (8.7 percent sales growth vs. a year ago) outpacing away-from-home (six percent vs. a year ago), according to IRI’s and NPD’s inaugural joint research.
The research offers the first-ever comprehensive view of the “Complete Food” market – examining how consumers buy and consume food at home, use restaurants and foodservice outlets – and uncovers new insights about consumers’ trade-offs to save money and splurge in the current inflationary environment. The research forecasts the Complete Food market to grow by three to five percent in 2023.
Key Findings on the Market
Other key findings from the IRI-NPD research identify what’s driving shifts, how occasions at home are evolving, and the impact of rising inflation, including:
- Hybrid and flexible work schedules enable up to 20 million U.S. workers to work from home, which keeps the substantial majority – 62.5 percent – of the food dollar on retail at-home sales, while 37.5 represents foodservice spending.
- Consumers are bargain hunting, preferring more mainstream and value brands over premium brands, choosing private label foods in select categories and occasionally buying premium products as affordable luxuries.
- Consumers are migrating to more at-home food to offset rising costs, as noted by the deceleration in foodservice traffic, down three percent in July. Even when dining out, consumers trade down to more value foodservice outlets, like quick service restaurants, as evidenced by the growth in average customer check vs. menu prices.
- Market bifurcation is intensifying as higher-income households prefer premium products and lower-income shoppers prefer mainstream and value products. More growth is driven by higher-income households, as lower-income households are more economically challenged.
Restaurants That Offer Value Are Top of Mind for Consumers
“With inflation hitting 8.5 percent in July, it’s no surprise that consumers are trading down to lower-priced options and opting for more value, especially when dining out,” said Dr. Krishnakumar (KK) Davey, president of CPG and retail thought leadership for IRI and NPD. “While the pandemic and recent inflationary pressures shifted demand, restaurants and foodservice outlets offering value, convenience and at-home indulgence are top of mind for consumers and will continue to grow.”
David Portalatin, senior vice president and industry advisor for food and foodservice for The NPD Group, said, “Even with the impact of elevated grocery prices, dining out is still much more expensive than eating at home. As we head into 2023, restaurant recovery will be slow and steady, as traffic begins to return to pre-pandemic levels. Current demand suggests that culinary trends are shifting to incorporate more bold flavors inspired by global and regional influences.”
The IRI-NPD inaugural joint research merges IRI's retail point-of-sale data on what consumers purchase and where they shop with NPD's continuous following of at- and away-from-home eating behaviors.
IRI and NPD completed their merger in August 2022, creating a leading global technology, analytics and data provider. The merger brings together colleagues across the globe to offer more than 7,000 clients a comprehensive, accurate view of consumer behavior, total retail purchasing and consumption trends across a range of industries.
To learn more about IRI, visit IRIWorldwide.com/en-us. To learn more about NPD, visit NPD.com.
*U.S. Bureau of Labor Statistics, Consumer Price Index, July 2022
Plan to Attend or Participate in the
Vibe Conference, Feb. 27 – March 1, 2023
To learn more about the latest trends, issues and hot topics, and to experience and taste the best products within the on-premise beverage community, plan to attend the Vibe Conference, Feb. 27 to March 1, 2023 at the Sheraton San Diego Hotel & Marina. Visit VibeConference.com.
To book your sponsorship or exhibit space at the Vibe Conference, contact:
Fadi Alsayegh
Sales & Sponsorships
Email: [email protected]
Phone: 917-258-5174
Donna Bruns
Sales & Sponsorships
Email: [email protected]
Phone: 936-522-6932
Charlie Forman
Sales & Sponsorships
Email: [email protected]
Phone: 845-262-1041
Connect and follow Questex’s Vibe Conference and community at Facebook and LinkedIn.