Vying for a share of the $158 billion food and beverage industry
Circana’s newly launched Complete Eats report is based on unprecedented cross-channel panel expertise tracking $158 billion dollars of Australian food and beverage spending across FMCG and foodservice.
Inflation played a key role in driving growth of 6 per cent in spending per trip in both channels. But other behavioural measures highlight where the cross-channel competition for share of spend is being won and lost.
The Complete Eats report indicates that FMCG is capturing a larger portion of consumer spending at the expense of foodservice providers. This trend has become evident in the most recent year and even more so when contrasted with the period before the pandemic. FMCG’s momentum, favouring higher in-home consumer expenditure, seems poised to quicken as evidenced by the March quarter trading, which saw an increased disparity between spending on home-based consumption and dining out.
In the 12 months leading up to March, Australians increased their spending on retail food and beverages by $1.8 billion – showing a rise of 7.2 per cent from the previous year. This hike was supported by an extra 41.6 million shopping trips for food and drinks, as Australians became more active and frequented supermarkets and other food retail outlets more regularly due to an expanding population.
Nevertheless, the foodservice industry saw a significant decline of 9.9 million in customer visits, resulting in a modest spending growth of 5.9 per cent. This was primarily due to a 2.5 per cent decrease in patronage at full-service restaurants, where people usually spend more than double that of quick-service venues.
With foodservice inflation surpassing that of retail and a significant percentage of Australians consciously seeking ways to reduce expenses to counter growing living costs, higher-end dining experiences are facing increased scrutiny and a possible decline in patronage.
While total food and beverage spending is growing in both FMCG and foodservice, both channels are challenged by a need to stem the declines in items sold. With disinflation now well and truly established it has become a performance driving imperative in 2024.
Serve up success with Circana’s Complete Eats report
Get a complete view of the in and out-of-home spending across the $158 billion food and beverage market in Australia. This detailed report tracks spending across both retail and foodservice channels in Australia.
The post Vying for a share of the $158 billion food and beverage industry appeared first on Inside Retail Australia.