US & Global Economic Impact Analysis and Forecasts

Freedonia analysts and economists are sharing their insights on how major events are impacting different parts of the US and global economies.

Inflation, the US Food Market, & Consumer Behavior

There are a lot of factors behind rising prices in food, including still high demand for cooking at home, rising cost to transport food, supply challenges as processors shut down temporarily or issue recalls, seasonal/climate/weather challenges to crops, and global shifts in supply due to crisis points such as the war in Ukraine and sanctions on Russia.

Many consumers are concerned about rising or otherwise inflated prices in several product categories, but concerns are highest for food. In the Freedonia Group National Online Consumer Survey conducted in October-November 2021, 56% of respondents reported being very concerned about rising food prices. In the November-December 2021 edition of the survey, 50% of consumers strongly agreed they were concerned about rising food prices. By the February 2022 survey, this figure had jumped to 60% of consumers.

Similarly, in the October-November 2021 survey, 49% of consumers reported they were very concerned about food shortages. In the November-December 2021 survey, 27% of consumers strongly agreed they were concerned about shortages of food they typically buy, and this figure grew to 39% in the February 2022 survey.

Shortages typically mean higher prices; low supply and/or high demand brings on higher prices. So, people who are concerned about shortages are also showing their concern for rising prices. Consumers who are expecting the things they buy (in this case food) to become less available and for prices to rise will stock up now, thus assuring themselves of enough stock locked in before prices increase even more.

However, that is a self-fulfilling prophesy. As more consumers buy ahead of their need, that messes with supplies as manufacturers can’t keep up with demand, resulting in more shortages on shelves and driving prices up even more.

Freedonia analysts continue to watch inflationary trends for direct and indirect effects throughout the economy.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, especially coverage in the Consumer Goods markets and Packaging industries, as well as Food & Beverage coverage from our sister publisher Packaged Facts. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Food & Beverage      Packaging    

Urban Living Transitions: Tier 2 Cities, the Suburbs, & Rural Areas

A much discussed trend of the last few years is the pandemic era exodus from cities to the suburbs and rural areas…and potentially back again.

However, something to keep in mind: the Census figures being discussed in many of these articles are for the actual city boundaries, not metro areas. So when you see cities like Chicago and New York losing population, it includes people shifting to the suburbs just outside the city limits. In that way, it is still counted as the city losing population, even though people may not have moved that far away.

What makes those who move away from urban centers more likely to stick with their choice? It depends on their homeownership status and if they have kids. Homeowners are stickier in their location than renters are as the transaction costs to sell are much higher than moving at the end of a lease (or even breaking a lease, in many cases). Additionally, the move to the suburbs for the schools and larger yard when you have kids is an old story that repeats with each generation.

Still, for every article that has Millennials loving their new exurban lifestyle, there are ones about pandemic homebuyers who are miserable with the move to homeownership. They have maintenance responsibilities they didn’t have as renters and might be house-poor now, lacking the cash for the travel and events they would like to resume as the pandemic feelings ease.

But what are the effects of this movement – no matter the direction?

There are many implications to this trend. From building construction needs to the type of things consumers will be spending their money on. For instance, if you have that house now, are you investing in lawn and garden care equipment and supplies? Are you investing in a new deck? Are you buying paint and furniture? Or are you spending on travel and events and dining out?

Furthermore, this shift has implications also for infrastructure. Can investment in public transport and urban bike lanes be justified if city populations are falling and fewer people are commuting into the city?

This move to smaller cities, suburbs, and rural areas could also cause trends to spread differently. Classically, as people move, they take their tastes and preferences with them to their new homes. A primary example is the spread of international food trends along with immigration. While urban centers of Tier 1 cities are often the source of trends – from food to recreation to style and beyond – that might change. First, those leaving the urban centers will bring those tastes with them and businesses will form in smaller cities and suburban areas to give them what they want.

So not only will moving to the suburbs change the habits and preferences of the former urban dwellers, but their movement into the suburbs and rural areas will change these locations by their arrival. This could lead to trends spreading faster into smaller cities and rural areas.

What should we watch? Remote work trends are worth watching as it is a good part of seeing whether the exodus from urban centers holds. As more people no longer needed to consider commute times in selecting where to live, they could cast their real estate nets a little wider, sometimes even out of state. This opened up options to these people, and since they bought homes, they are now more sticky in their location compared to urban renters.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, especially coverage in Construction & Building Products, Consumer Goods markets, and Automotive & Transport industries. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Industry Studies    

One Company's Waste is Another Company's Raw Material

The circular economy is not just a chance to improve green-cred or as a marketing tool. It can be a financial benefit to a company’s bottom line too. If a company finds a market for something they otherwise would have to pay to dispose of, it's a financial win and a sustainability win.

We're looking at food waste for Packaged Facts this year as it’s a major issue food suppliers/retailers are targeting for sustainability goals (oh so very much waste), but not all food waste is edible or at least not edible in the same way, so...

Interesting case: Ford is using a plastic made using McDonald's coffee chaff (apparently that's coffee bean skin that comes off in the roasting process) for some of its headlight housings. They started working on this in late 2019, but talked about it recently in light of their pledge to reduce virgin conventional plastic use. Such material creativity has become more important, given the fact that recycled plastic materials are not available in large enough amounts to allow all the companies that need it for their sustainability pledges to hit their targets.

Others are also getting creative in making unconventional and more sustainable plastics. Loliware has developed a process using seaweed pellets that can be run through the same equipment that makes plastic straws, utensils, cups, etc. Right now, the company is only making straws and is able to offer these products at a competitive price because it doesn't need special equipment to make these straws. However, Loliware is expecting to expand into other areas with their molder partner Sinclair & Rush.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, especially coverage in the Packaging industries, as well as Food & Beverage coverage from our sister publisher Packaged Facts. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Food & Beverage      Packaging    

Autonomous Farming?

A big area for M&A activity in the last few years is in artificial intelligence, sensors, and related hardware.

The example of John Deere’s push into technology is a telling one. The company has been making many acquisitions in this area and this month announced it was acquiring artificial intelligence start up Light.

This announcement reflects two important trends:

1) It shows a legacy company increasingly moving into AI/robotics – a trend toward innovation that is occurring across industries and should not be ignored.


2) The company Deere acquired (Light) started out making cameras for smart phones, but then became a major player in autonomous vehicles by making advanced cameras and sensors – an example of a company taking something that was pretty basic and seeing a lot of downward cost competition and creating its own market by taking what it can already do into new markets.

Freedonia analysts continue to watch trends in AI, robotics, and other automation efforts across industries for additional opportunities.  

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, especially coverage in Construction & Building Products, Consumer Goods markets, and Automotive & Transport industries. Freedonia Custom Research is also available for questions requiring tailored market intelligence.