Changes in eating habits are proving to be a challenge for food and beverage companies as Americans get older and eat fewer meals throughout the week.
A recent report on U.S. food consumption shows that more people are cutting down on meals, snacks and restaurant visits because of rising food costs and an aging demographic. It has become a challenge for food-related businesses working to gain market share.
According to "Eating Patterns in America," a recently released NPD Group report, the number of annual eating occasions per capita in the U.S. has been on a steady decline as the cost to eat at restaurants outpaces the cost to prepare a meal at home.
Kim McLynn, executive director of public communications for the NPD Group, said this doesn't necessarily mean people are eating less food, but they are eating fewer times in a day.
An eating occasion can mean a snack of 12 cookies or a large meal with friends, McLynn said. "It's any setting where an individual eats."
Modest population growth is expected to increase food demand, but it's not enough to stop the average decline in eating occasions per capita, according to NPD Group. On average a person will eat 1,410 times this year, or roughly 461 billion times for the total U.S. population, down from 1,453 times per person in 2009. On a weekly basis, people on average eat about 27 times, a 3.5 percent decline from 28 occasions in 2009. Reasons for the overall decline stem from the tendencies of the nations' aging demographics, McLynn said.
As people get older, they tend to eat less, McLynn said.
"While it's true that finding growth in this market is challenging for food and beverage marketers, those that focus on being meal solutions providers by understanding consumers' needs and wants have the best shot at winning [market] share," David Portalatin, an NPD Group food industry adviser, said in a statement Monday.
Consumers are preparing meals at their homes to save a buck, or several. McLynn said the data suggest further "blurring of lines" as people complement a homemade salad with, for instance, a store-bought rotisserie chicken. Close to half of the dinners purchased from a restaurant are eaten at home, according to the 2018 report. Four out of five meals are prepared at home, an increase from a decade ago.
On the other hand, Deborah Pitts, a dietitian in Fayetteville, said the data reflect how more people today are busy or distracted and often skip meals, or eat food at their desk to save time.
"Now people eat at unusual times throughout the day," Pitts said. "They want to eat better, and they have more options because they are living in an age of information."
NPD Group, a New York market research firm founded in 1966, tracks U.S. food data on a daily basis, compiling information from thousands of participants that reflects consumer eating attitudes and behaviors. Participants report what and when they eat and drink at home and away from home. This marks the group's 33rd year tracking food data. The NPD Group, formerly known as National Purchase Diary Panel Inc., sells market data for others to use, including the nation's food companies.
Tyson Foods in Springdale, for example, adjusts aspects of its prepared-foods business to cater to changing consumer tastes. In the past year, Tyson's investment arm has worked with and supported startup companies in Chicago and California's Silicon Valley, including plant-based Beyond Meat and cell-based Memphis Meats, which offer ersatz meat products. Other food and beverage producers like Cargill, Campbell's and Coca-Cola also have venture capital groups that keep an eye on young, tech-related companies.
Ken Shea, a senior food and beverage analyst with Bloomberg Intelligence, said the trends noted in the report are not new. Slow population growth and an overall shift to foods perceived as healthful are a couple of the challenges that packaged-food companies have been facing in the market.
In response, companies are "emphasizing 'premium' products that tout new exotic flavors and/or attributes like digestion aid, protein, energy, etc.," Shea said in an email. "I expect acquisitions will remain a critical component for food companies to generate sales growth, particularly in emerging markets."
Martin Thoma, a principal of Thoma Thoma, a marketing firm in Little Rock, saw Tyson as one of the companies that is "offering solutions that address the evolving needs of our American families."
Meal delivery services such as Blue Apron, and Amazon's purchase of Whole Foods, are among the latest industry disruptions, Thoma said. They identified niches and opportunities in the market, he said, and were able to change to the needs of the customer.
"It's fascinating to think that Americans are eating less often," Thoma said. "Food and beverage is on its way to being classically defined as a mature market, and as a mature, or a shrinking market, it becomes more and more critical for businesses to capture market share, or in this case, stomach share."
Business on 10/17/2018