Food inflation: a complex challenge for the food industry
In this SIAL Insights report, inflation in the food sector is presented as a major challenge for the industryFaced with persistent price increases, consumers and professionals are adopting new strategies to adapt to this challenge
In this SIAL Insights report, inflation in the food sector is presented as a complex challenge for the industry. Over the past two years, food prices have reached historically high levels, often exceeding overall inflation rates. In France, cumulative inflation for fast-moving consumer goods (FMCG) in supermarkets reached +20% over 2022 and 2023, putting significant pressure on household purchasing power. Faced with this situation, 50% of consumers have changed their consumption habits, favouring special offers (60%), reducing food waste (49%) or choosing more affordable brands (47%). This adaptation is also reflected in a decrease in the size of shopping baskets and increased use of promotions.
The rise of private labels despite declining volumes
In France, where the cost of living crisis is particularly acute, the volume of sales of fast-moving consumer goods (FMCG) fell slightly by -3.1% in 2023 compared to 2022. However, this situation has been accompanied by a positive trend for distributor brands, whose sales in value have increased by +14%. This trend shows that, even in a difficult economic climate, consumers are managing to adapt their purchasing habits to maintain a balance between budget control and product diversity. On the other hand, responsible products are struggling to keep up with this trend, with growth limited to +3.8%, well below the FMCG average (+8.6%), a sign that environmental concerns sometimes take second place to economic imperatives.
Adapting supply to meet new consumer expectations
Food inflation is forcing the industry to rethink its supply model. Adapting product formats is becoming essential, with a preference for smaller portions or packaging better suited to consumer needs. At the same time, distribution networks are evolving to meet new expectations: in Germany, discount stores are gaining in popularity, while in countries such as Nigeria and India, practices such as group buying are developing. This evolution reflects a need for increased flexibility to reconcile economic constraints with demands for practicality. The food industry must innovate to continue offering accessible products while supporting the transition to more responsible consumption.
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Source image: SIAL Insights
