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    

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    

Fresh, Customized, & Contactless… More Robots in Foodservice

We’ve talked before about Sally, a salad making robot from Chowbotics (which was bought by DoorDash in February 2021). Sally seemed an ideal response to interest in healthy eating coupled with concerns about salad bars in the COVID-era, as consumers and businesses were more aware of germs and interested in contactless options.

But since we’re also in an era of shortages in labor – particularly in foodservice – and experiencing rising costs for labor, food, and facilities, there is additional energy behind the idea of how automation can help. Tech innovators have stepped in. The most recent example is the RoboBurger, first placed in New Jersey. This is not an April Fools’ joke – you can’t joke about National Sanitary Foundation (NSF) certification!

The RoboBurger requires human workers to stock the machine and to check it if on-board sensors report tech trouble, such as a power outage or other reason for improper heating or refrigeration. Otherwise, this 12 square foot mobile kitchen can make a fresh burger in about 6 minutes. The unit allows for 24/7 operation in places like college campuses, airports, malls, hospitals, and other such facilities where hot food demand could fall outside of conventional restaurant operating hours.

Freedonia analysts will continue to watch for ways that robots, artificial intelligence, and other innovations will enable businesses to operate more efficiently and affordably. These and other innovations will help businesses provide customers what they want and need when and where they want and need it.

For more information on discussion of opportunities, see Packaged Facts’ Food & Beverage industry coverage, including Food Carryout & Delivery (update coming in May 2022) and The Freedonia Group’s analysis of the packaging industry, including to-go containers in Foodservice Single-Use Products and Global Foodservice Single-Use Products. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Food & Beverage      Packaging    

Starbucks: New Plans to Adopt More Sustainable On-the-Go Foodservice Packaging

Where big companies step in, innovations tend to happen faster. We’ve long seen that retail-level and fulfillment innovations take off when giants like Walmart and Amazon adopt a process or policy. Starbucks is one of those foodservice giants propelling more eco-friendly foodservice packaging innovations.

Starbucks announced this week that it will be making additional steps to reduce single-use plastics in its restaurants and will increasingly incorporate ways to reduce single-use products altogether as it develops improved processes for reusable cups and plates.

There are a lot of different ways that restaurants and coffee shops are testing greater use of reusable cups, plates, and utensils:

  • Borrowing programs are being tested by a number of salad/sandwich places and coffee shops. In these programs, if you don’t use the plate or cup for dining on-site, you bring it back to the restaurant or an authorized collection bin and then get a fresh one with your next order. Some programs require the use of a loyalty card that tracks the cups and plates, while others use deposits that are returned or credits that are applied when the cups and plates are logged in as returned.
  • The development of on-site washing services is another potential avenue as customers can bring in their own cups, plates, and utensils. Sometimes this washing is done by the foodservice facility itself and other times they offer a low- or no-touch self-service wash station.

Each have their own challenges in areas such as logistics, costs, water-use, heath-code compliance, and speed of order fulfillment. The bigger logistical challenge is always going to be how to use a customer's own cup in a drive-thru line without holding up the line.

However, where there's a will (and there is), there's a way. Solutions will be created and those who develop them stand to make a lot of money by solving a widespread problem.

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

  Food & Beverage      Packaging    

What’s in a Name? Potentially Trouble

A rose by any other name would smell as sweet… with apologies to William Shakespeare, consumer products suppliers and branding professionals know differently.

Corona, the well-known Mexican beer brand (sold in the US by Constellation Brands), was initially thought to take a hit in sales in 2020 as its name was so similar to the coronavirus pandemic then raging largely unchecked. False associations with the virus turned out to not be as damaging as initially feared. This ended up being a case more closely related to the idea that there is no such things as bad publicity. The hubbub over the brand’s similarity to the virus ended up having the brand frequently discussed in the news. The company believed that its customers knew the difference between the virus and the beer; they did.

The current negative associations in the US with Russian branded products may be a little harder to refute. Vodka brands such as Stolichnaya and Smirnoff have long enjoyed positive associations as Russian vodka is seen as a premium product in the US. So, despite being made elsewhere, the brands have had little reason to loudly refute that perception.

For instance, the Stolichnaya vodka sold outside of Russia is made in Latvia and owned by Luxembourg-based Stoli Group. The company, which had been stepping back from labeling as “Russian Vodka” (the company had been sourcing ethanol from Russia, but is now shifting to Slovakia, despite the higher cost), is now changing the vodka’s name to Stoli to allow for even more separation.

None of this is new. It has happened before and will happen again. Companies and brands must stay aware of perceptions of their products and remain flexible to adapt.

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

  Consumer Goods      Food & Beverage      Packaging