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.