“With the global middle class growing by 70 million each year and food prices expected to more than double within 20 years, fast-moving consumer goods companies in many markets are preparing for an unprecedented period of rising demand, economic pressures and aspiration-driven buying behaviour,” said James Russo, senior vice president, global consumer insights, Nielsen. “FMCG companies focusing solely on consumer income as a barometer of spending habits, however, are unlikely to fulfil their business growth expectations because this is not a middle-class-only trend.
“Food inflation impacts all consumer incomes. By looking instead at consumer diversity, spending flexibility and the consumer demand landscape, FMCG companies can better understand real-world buying potential and more accurately scale goods and services to meet the needs of consumers in both developed and developing markets around the world.”
Nielsen’s information shows that in-home food products were not the only areas of spending impacted by rising food prices. Areas where all respondents would change their spending include:
When asked about likely spending changes to specific food categories, 14% of global respondents indicated they would buy more loose, unpackaged, unbranded cereal (such as rice, wheat and grains). 11% said they would stock up on fresh or frozen fruits and vegetables, and 8% said they would buy more canned fruits and vegetables.
More than half of global respondents had no plans to change their spending on staple categories such as dairy products (68%), meat and poultry (62%), bread and bakery goods (60%), packaged foods (55%) and fish and seafood (52%).
Half of all respondents said they would buy fewer products such as candies, cookies and other sweets (59%), chips and other snack foods (58%), carbonated beverages (53%), alcoholic beverages (49%), prepared meals (48%) and convenience foods (45%).
“Traditional trade is still dominant in many countries, and in these markets, commodity purchases are part of consumers’ daily lives,” said Russo. “The challenge for marketers will be introducing new brands and products when food inflation is suppressing the ability for these consumers to grow their shopping baskets.”
The Nielsen Global Survey of Inflation Impact was conducted between 18 February and 8 March 2013, and polled more than 29,000 online consumers in 58 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America.
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