Named Innova’s No. 2 trend for 2023, affordable nutrition has become increasingly relevant for the 50% of consumers who say they are spending more on food and beverages since pandemic lockdowns.
More than half of consumers cite inflation and higher prices as the cause, with grocery and restaurant prices up 11.3% and 8.2% year-over-year, according to data from the Consumer Price Index in January 2023.
At the same time, consumers also report noticing so-called “shrinkflation,” with 66% of respondents in an Innova survey saying they noticed smaller grocery packs and roughly 55% noticing smaller restaurant and takeout portions.
The perceived smaller value coupled with higher prices has resulted in consumers opting for lower cost foods, cooking from scratch or searching for discounted items in order to save money. However, the desire for nutritious foods remains apparent, with consumers of all income levels ranking health above affordability as the most important factor in new product development.
“This is not just ‘give me cheap food,’” said Lu Ann Williams, director of global insights for Innova, in a Feb. 22 webinar. “This is ‘I want affordable nutrition.’”
Companies have begun to tackle the issue, resulting in a 86% year-over-year growth in new products with budget and affordability claims. Nestle SA also has recognized the need for creating affordable, nutritious foods and has employed artificial intelligence to help design products that can balance those and other needs.
Other companies are utilizing charitable initiatives to satisfy the need, such as PepsiCo, Inc.’s Food for Good program. The program is aimed at resolving food insecurity issues around the globe, and it took a particular focus to increasing access to nutritious food in June 2022.
Some CPG manufacturers also have committed to increase access to affordable nutrition as part of their brand’s messaging. In the United States, snack crisp maker 34 Degrees has dedicated a percentage of all crisps baked to be donated to charitable causes.“Assuming I’m the CEO of a mid-to-large size company, I would absolutely put this topic at the center of my growth strategy for my future,” said Kamel Chida, adviser to the Bill and Melinda Gates Foundation, in the webinar. “It’s a must do for companies, the market has changed, consumers have changed.”