Categories that have and have not survived high prices: A summary
- Since 2022, food prices have seen significant increases
- Essentials such as bread, eggs and pasta have weathered the storm
- Functional products like high protein snacks and functional beverages also continue to thrive
- Those less related to health, such as alcoholic beverages fruit juices, and meat substitutes, have suffered
- Coffee and chocolate have also taken significant blows
Since 2022, the world has been in the grips of a cost-of-living crisis, meaning prices for many essential goods have been significantly higher than normal.
As prices for everyday items go up, consumers are faced with far more consequential choices. If they can’t afford everything, they have to choose what to prioritise.
In such an economic situation, some products will weather the storm, while others will suffer due to pricing.
Products that have weathered the storm
Some products have weathered the high-prices storm better than others.
Essential products, such as eggs, pasta, water, frozen and chilled fruits and bread (especially bread baked in-store) have seen sales increases even while prices have been rising, explains Ananda Roy, senior vice president at insights company Circana.
Frozen fruit was one of the categories that saw the most significant growth in price (10.2% from a year ago). Bread has also seen significant price increases, going up 16% since the cost-of-living crisis began, in part due to the war in Ukraine.
Essentials have weathered the storm because they are “valued by budget-conscious households, particularly during times of economic uncertainty. Their ability to stretch across multiple meals reinforces their role as indispensable staples despite soaring prices”, explains Nathalia Theofilopoulou, senior consultant at data analytics company Euromonitor International.
Furthermore, “indulgent and health-forward products have demonstrated notable resilience, and even success, amid rising prices,“ explains Theofilopoulou.
In particular, products with functional benefits, like high protein dried fruits, nuts and seeds, functional beverages, herbal teas, and non-alcoholic spirits, have seen success. Even energy drinks have weathered the pricing storm.
“These categories have been successful primarily because of innovation – retailers and brands have added variety and the healthier options that meet the consumer’s evolving dietary and lifestyle choices,” Circana’s Roy explains.
Furthermore, the introduction of private label products in categories such as beverage and hydration has had a positive effect on sales.
Where pricing affected sales
Not all categories were so lucky. In some cases, rising prices caused sales to drop significantly.
“These products have either become discretionary or if an essential purchases, now unable to command a premium in a highly price sensitive category setting,” Roy explains.
Many of these products were those that had faced the most significant price increases compared to last year, including chocolate (12.7%), coffee (11.4%), butters and margarines (11.8%) and hot chocolate (7.9%).
It is specifically mass market chocolate that has suffered the most consequences from high prices, explains Julia Buech, senior specialist for food and agribusiness at Rabobank. Premium has done relatively well.
Other categories were also affected, including frozen rice, UHT cream, porridge and frozen meat substitutes.
Frozen meat substitutes were particularly affected. “Even marginal increases” in the price of meat substitutes, Roy explains, led to declining sales. A price increase of 1.7% drove sales down by 11%.
Other affected categories include those incongruent with consumer desires for health. For example, alcoholic beverages have been hit hard. This is particularly seen among young adults, many of whom are moving away from alcohol consumption, explains Euromonitor’s Theofilopoulou.
Fruit juices and concentrates are also seeing a decline, due to the negative health perception that surrounds them, as well as lack of innovation.
“Their association with artificial ingredients, high sugar content and limited nutritional benefits makes them less attractive to today’s health-conscious consumers, who are actively seeking cleaner, more natural options”, Theofilopoulou continues.
Meanwhile, the popularity of plant-based alternatives and the decline of traditional breakfast routines has meant the decline of the popularity of conventional milk.
Dairy products have actually seen significant price increases, driven by tight milk supply and rising feed and energy costs.
Overall, consumers have shown a clear preference for some products despite high prices, while others have fallen by the wayside.
