Driving Global Trends in Fresh Food Sales

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In 2023, growth of fresh food in total sales terms was virtually unchanged year-on-year. However, in retail, volume sales growth slowed significantly as rising prices constrained consumer purchases. On the other hand, the value of retail sales surged; not because consumers bought greater quantities, but because the fresh food they purchased in 2023 cost them more. On the other hand, volume sales via foodservice grew in 2023, as the steady return from the depths of 2020’s COVID-19 restrictions continued.

Inflation’s impact continues to be felt

In 2023, consumers worldwide struggled with rising fresh food prices and diminished spending power. Having increased by 3.6% in 2022, retail volume sales growth slowed to 1.4% in 2023. Nevertheless, retail value sales increased significantly as inflation pushed prices upwards. As 2023 continued, inflation slowed in many markets. However, while it remains positive, prices on shelves are still rising. Furthermore, and more importantly in this context, food inflation continues to run ahead of the overall rate in many countries. In the UK, for example, prices of food and non-alcoholic beverages rose by 8.0% in the year to December 2023, while the headline (CPI) inflation rate for the same period was 4.0%.

Chart showing Percentage Change in Average Unit Price on Selected Fresh Foods in Country

Eggs and poultry punished by avian flu

2023 saw avian flu scythe through farmed birds and wild birds alike. Millions of birds have died; further millions have been culled in attempts to limit the spread of the disease. This affected two of the most affordable sources of protein – poultry and eggs – with prices rising sharply as supplies were constrained and shortages occurred.

Various markets saw eggs disappear from shelves or run low throughout 2023, and at a global level, prices increased by almost 10% year-on-year

Source: Euromonitor International

The price surge in the US (a 25.6% year-on-year increase) even saw plant-based egg substitutes become a cheaper option, which boosted their sales.

While vaccinations are an option to combat the disease, this brings complications. For example, France’s decision to vaccinate ducks (starting in October) prompted the US to impose trade restrictions on French poultry imports, citing the fact that vaccinated birds may not show infection and it would therefore be impossible to tell if an infected flock was entering the country.Chart showing global egg sales

The harvest lottery of climate change

Farming worldwide continues to feel the impacts of climate change. In August 2023, the German Agriculture Minister, Cem Özdemir, summed up the situation succinctly when he said unpredictable weather events are “increasingly turning our harvests into a lottery game.” 2023 witnessed both scorching temperatures and floods in many important fresh food-producing countries. Spain, a key producer and exporter of fresh fruit and vegetables, is a good example of the new reality – it experienced four heatwaves across a 24-day period during the summer and recorded its highest ever temperatures for October. However, in between these record-setting heat events, September was characterised by record rainfall and flooding across the country. China, the world’s leading market for fresh food consumption, recorded its hottest ever temperature (52.2°C) in July 2023.

In October, the charity Action Against Hunger highlighted crops that it forecasts to be severely impacted by climate change over the next 20+ years. These include key fresh foods such as potatoes, bananas, soy and the grains necessary for meat (as animal feed).

Various issues lead to questions over meat’s place at the table

Drought is just one issue weighing on fresh meat across the world. In the US, for example, beef reached record high prices with herd numbers smaller than they have been in decades. Hay (for feed) is a particularly water-intensive crop, and stocks have been hit hard. Russia’s invasion of Ukraine resulted in reduced supply of fertiliser, which made growing crops to feed livestock even more expensive. This was in addition to the impact on grain supplies for animal feed: in July 2023, the Turkey/UN brokered grain transport deal collapsed with subsequent attacks on Ukraine’s export infrastructure. These challenges, along with the impact of avian flu on poultry, have meant that major meat businesses such as Smithfield Foods and Tyson have closed plants and made redundancies as customers struggle with rising prices.

Consumers in a number of key markets continue to reduce meat consumption, with this trend strongest in Europe.

Globally, over one fifth of consumers are now trying to limit their meat intake 

Source: Euromonitor International’s Voice of the Consumer: Health and Nutrition Survey 2023

Challenging times to continue

2023 was a year of challenges for the fresh food industry, and 2024 is set to bring more of the same. Where one supply issue eases, it appears another takes its place – January 2024 has brought Red Sea shipping disruptions, with an estimated 12% of global trade utilising this route. With the impact of climate change increasing year-on-year, there seems little prospect of prices returning to pre-pandemic levels.

For more on these trends, plus detail on Fresh Food sales around the world, please see our report, World Market for Fresh Foods.

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