KANSAS CITY — Retailers and food manufacturers will need to identify opportunities created by the shifting demands of younger consumers to compete with recent growth in foodservice spending.

Data from a report by FMI – The Food Industry Association, market researcher Circana and consulting company Oliver Wyman found foodservice spending outgrew retail food and beverage spending for younger shopping cohorts and high-income households during the last year, despite the food and beverage retail share by eating occasion increasing relative to pre-pandemic years.

Factors responsible for the shift range from the rise in popularity of online delivery apps to workers returning to the office and eating away from home. To recapture some of the spending loss, retailers can capitalize on the growing emphasis on food’s role in health and wellness and the increased importance of convenience.

“To win more customer purchases, food and beverage retailers and their suppliers need a better understanding of current consumer preferences,” FMI said. “Shifts toward spend for foodservice, the rise of digitalization, and return-to-office all provide food and beverage retail with opportunities to improve how they deliver on what matters most to consumers.”

Shoppers have begun to see their food and beverage choices as playing a significant role in their physical wellbeing, with examples such as the “food as medicine” trend. Consumers also paying attention to the relationship between diet and mental health, with nearly 75% of Americans report that the food and beverages they consume have a “significant or moderate impact on their mental and emotional wellness.”

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