To help food services and other enterprises that sell food and food products get ready for what’s about to come, it’s good to know some of the trends in the industry (especially when it comes to inflation and consumer preferences). This way, you can better plan ahead and adapt your business to better service your customers.
Price increase of food and grocery products
A rise in price or Consumer Price Index (CPI) affects which products and how much of them are going to be bought by consumers. Higher prices often mean fewer products to buy. Also, other food products might not be bought at all because consumers are becoming more selective on which ones to buy.
According to the Australian Bureau of Statistics, some of the grocery products with the highest annual price change are:
- Fruits and vegetables (16.2%)
- Dairy and related products (12.1%)
- Bread and cereal products (10.0%)
You’ve noticed that fruits and vegetables have the highest annual price increase. This could be because of the following:
- Price increase of fuel for transportation
- Price increase of fertilisers
- Supply chain disruptions
The price increase might still go on in the year 2023 and beyond. The increase might slow down in the coming months, but still, consumers will feel the price increase and this will affect their everyday choices.
Inflation might also affect how Australians think and decide about food takeaways. Although prices of takeaways and fast foods have also increased (partly because meat and other ingredients have also become more expensive), consumers still stick to the practice because of convenience and variety.
Restrictions on movement because of COVID-19 further accelerated the rise of more food takeaways. In addition, it’s estimated that millions of Australians now often buy chilled and easy-to-prepare meals. It seems that consumers still prefer convenience and variety over price (if the price is still reasonable).
Those are the general trends in the food industry. With more food takeaways (or millions of Australians will still prefer this), it might be good to set up your supply chain that takes advantage of this trend (such as setting up more refrigeration equipment or sourcing more ingredients that are chilled or frozen).
It might also be good to provide more value as consumers are becoming more price sensitive about their purchases. Consumers can now easily compare the prices because of apps and websites. To stay ahead, it’s always good for businesses to streamline their operations, expand their menus (or just focus on the bestselling ones) and better understand their market.