‘Indulgent’ food segment at ‘high risk’ to inflation: GlobalData
The segment will only grow by 2.2% in volume annually from 2021 to 2024.
The ‘indulgent’ food categories such as chocolate and confectionery, savoury snacks, and ice cream are at “high risk” to global inflationary pressures as consumers prioritise buying essential goods.
In a report, GlobalData said the number of US consumers who claimed to spend a “high amount” on chocolate and confectionery declined by 12% in the third quarter compared to the first quarter.
It said the segment will only grow by 2.2% in volume yearly from 2021 to 2024, with chocolate and confectionary being the hardest hit as its volume growth will slow to 1.5% annually during the same period, from 2.1% from 2016 to 2019.
Ice cream, meanwhile, will face a double-digit growth in value from 2021 to 2024, but only at 2.2% growth in volume.
“As these products are often positioned as treats and rewards and not staple parts of weekly meals, they are more likely to be compromised in consumers’ shopping baskets as household budgets continue to get tighter and consumers consider their health priorities,” Jenny Questier, senior analyst at GlobalData said.
Questier added emphasised the costs of ice cream, which include manufacturing logistics and storage for freezing, will be shouldered by consumers as prices of energy surge.
“Added costs combined with the seasonality of these products will further dampen peoples’ desire to purchase these in the future as they focus on essential items,” the analyst said.