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Food companies that best understand their consumers are best suited to create value for them.
In brief
FCI provides insights into evolving food considerations beyond just price and taste.
Food companies that prioritize consumer values now will gain a competitive edge tomorrow.
Food businesses should be increasingly aligning capabilities and products to consumer segmentation.
At the EY organization, we believe that the future of the food industry lies in a consumer-centric approach. By leveraging the insights from our Future Consumer Index (FCI) research, food businesses can unlock new opportunities for value creation and understand how their consumer segmentation can drive investments and innovation.
FCI provides valuable insights into a reimagined food system, shedding light on the evolving preferences and priorities of today's consumers. Through FCI, we can examine how consumers are reshaping the food landscape and moving beyond traditional considerations like price and taste. While the research shows price remains paramount and even increasing in importance, we uncover emerging segments rooted in health and wellness, planet and societal interests, and the desire for exceptional experiences. By understanding these evolving consumer needs, businesses can develop capabilities, products and services to drive value truly based in consumer centricity. Gone are the days when food choices were solely determined by what was abundant and available. Understanding consumer preferences and buying behavior is critical to thriving in a reimagined food system.
We help companies navigate this transformative landscape, providing strategic guidance to adapt to changing consumer demands and create lasting value.
Exploring the US Future Consumer Index for food companies by the numbers
Section 1: Overview of consumer attitudes about food consumption and behavior
A chart showing the overview of high-level attitudes about food and consumption behavior as derived from the April 2023 results of the US Future Consumer Index Survey (FCI)
Section 2: Investigating the FCI segment’s considerations for the food system
FCI identifies 5 consumer segments that will shape the future of food consumption. In this section we explore the makeup of these segments, how they have adjusted over time and the differentiating food behaviors by segment.
How the consumer segments have shifted over time since the beginning of the COVID-19 pandemic.
A chart showing the different FCI segment considerations have moved over time starting from June 2020. In April 2023, the consumer segments appear in the following order: Affordability first (38%), Health first (23%), Planet first (13%), Society first (13%) and Experience first (13%)
There has been a dramatic shift among consumers towards affordability and health, demonstrating a reprioritization of individual pursuits over collective efforts.
Rising inflation and the anticipation of future disruption are driving consumers to look inward and retrench in routines and activities that worked during the pandemic.
These conditions are driving consumers to reevaluate what is important to them, and indirectly resulting in better consumption habits.
A chart showing the shifting attitudes toward food consumption and behaviors by segment as derived from the results of the April 2023 FCI study.
Section 3: Five key themes food executives should be considering for a more consumer-centric operating model
Brand power must be balanced against economic sentiment to optimize price and range
Brands that can’t compete on price must focus on where they can stand out in value
Margin lost in downtrading, and channel shifts can be offset by delivering affordable premiumization
Brands must identify where savings can be made to balance new costs with price sensitivity
Companies must seamlessly integrate digital channels into their offering to capture consumer attention
Companies must become listening organizations to build a single holistic view of the consumers they serve
Companies must adopt adaptive and agile stocking strategies to match market volatility
Companies must innovate with machine learning, but also address fears of staff regarding future prospects
At-home cooking is enabling curated products, advice and services to support healthier living
Products must comply to regulatory frameworks and satisfy the consumer’s demand for correct information
Products and services must focus on physical and mental health to align with consumer priorities
The rising prominence of mental health will require a proactive response to mitigate against future risk
Companies can differentiate by looking beyond the impact of what they sell to shape how it is consumed
Choosing the right technologies and tools will be crucial in embedding transparency and building trust
Those that can effectively scale sustainable solutions globally will be best placed to meet the targets set
Not only will companies use transparency to improve ESG metrics, but also to make efficiency gains
Companies must build the right contextual sensing capabilities to understand fluctuating environments
Companies must be agile with their experiences and plan to evolve them with change
As flexibility is the new loyalty, companies must deliver flexibility to make their experience sticky
Companies need to be investing in their direct consumer relationships to anticipate the next evolution
Summary
FCI insights drive innovation and investment for food companies by uncovering evolving consumer preferences beyond price and taste. Brands must adapt by balancing price, integrating digital channels, supporting health, embracing sustainability, and offering personalized experiences. The landscape demands businesses align with consumer values and needs to navigate this transformative moment.
