The growth of the U.S. food and beverage market slowed in 2010 (0.6%) compared to 2009 (1.3%), according to a SymphonyIRI Group report released at the show today. It projects that price increases will fuel growth in food and beverage, this year (1-1.5%) and next (1.8% to 2.2%).
Shoppers may take more expensive groceries in stride since many believe their personal financial situation is going to improve. But despite their outlook, consumables growth is expected to trail that of the overall U.S. economy.
Consumers are expected to stick with tried and true retailers and brands, but in order to retain them, marketers are going to have to reinvent themselves, says Dr. Krishnakumar Davey, managing director of Symphony Consulting.
"To succeed, these manufacturers and retailers must innovate by continuously introducing new products, packaging, pricing, merchandising and promotion strategies, and customizing these initiatives to highly discreet shopper microsegments."
Traditional supermarkets will have to battle the drug, convenience and dollar store segments in particular, since their CAGR is forecasted to grow 4.7%, 3.5% and 2.6%, respectively, between 2010 and 2012.