2024 Consumer Trends in the Food & Beverage Industry

The food and beverage industry is expansive. It encompasses a wide variety of unique operations, including manufacturers, grocers, distributors, restaurants and bars, caterers, food transportation services and similar businesses. According to USDA, there are nearly 1.7 million people employed in food and beverage manufacturing in the United States alone.¹ In recent years, the food and beverage industry has been undergoing a significant transformation, largely driven by consumers’ increasing focus on health and wellness.

Amid this transformation, the global food and beverage market is expected to grow to $9,225.37 billion in 2027.²

Given the breadth and fast-paced nature of this industry, it can be difficult for food and beverage operations to stay on top of consumer trends affecting the space. However, because the industry is heavily influenced by consumer behaviors (e.g., increased demands for food transparency, online shopping options, and organic food choices), businesses that fail to educate themselves on relevant challenges and opportunities may trail their competitors. This article will examine some of these consumer trends in more detail. Let’s dive into the key trends and challenges shaping this dynamic industry.

Consumer trends impacting food and beverage industry operations

1. Essential nutrient-packed food and drinks

Today’s consumers are more health-conscious than ever before and nutritional value is playing a pivotal role. Gone are the days when taste and convenience were the only factors driving food choices. Foods rich in essential nutrients, vitamins, and minerals are in high demand. People are actively seeking options that support their health and wellness goals, from boosting immunity to enhancing mental clarity.

A survey conducted by the International Food Information Council in 2020 found that approximately 54% of consumers consider the healthfulness of food when making purchase decisions. Notably, this shift is particularly pronounced among younger generations. Millennials and Gen Z are leading the charge, with around 63% of Millennials stating they prefer healthier food options, followed closely by Gen Z at 57%.

Several factors are influencing this move towards healthier eating habits. Increased access to information, thanks to the internet and social media, has enabled consumers to educate themselves about nutrition and wellness. Additionally, the rise in chronic diseases, such as obesity and diabetes, has heightened awareness about the long-term impact of dietary choices. Environmental concerns are also playing a crucial role, with many consumers opting for plant-based or sustainably sourced foods to reduce their carbon footprint. These combined influences underscore the growing demand for healthier, more nutritious food and beverage options, shaping the industry’s future.

2. The continued rise of plant-based products

In addition to being aware of nutritional information and where their food comes from, consumers are increasingly interested in healthier food alternatives. One such alternative is plant-based foods, which continue to grow in popularity and variety. In fact, sales of plant-based foods grew 13% from 2019 to 2022.³ According to recent market research, the plant-based food market is expected to grow at a compound annual growth rate of 11.54% from 2024 to 2030, reaching $19.07 billion by 2030.⁴

These days, plant-based foods are not only widely accepted by consumers, but they’ve also reached the mainstream. It’s not uncommon to find plant-based alternatives at the grocery store, in restaurants or even at fast-food chains.

This increased interest in plant-based eating can potentially be attributed to its benefits. For instance, plant-based diets may lower an individual’s blood pressure, promote heart health, help individuals lose weight, improve cholesterol or even reduce the risk of certain cancers.⁶ Additionally, plant-based eating has sustainability benefits, as plant products require fewer natural resources to create and are less taxing on the environment.⁷ As consumers become more aware of their impact on the environment and climate change, plant-based foods can provide an accessible way for individuals to make an impact. Data shows that a third of Americans substitute meat or dairy with a plant-based alternative an average of eight meals a week.

It’s not just vegetarians driving plant-based product growth, 68% of Americans have tried a plant-based meat or a dairy alternative.⁵ This creates a unique dynamic where consumers lack a defined diet and may eat both animal meat and plant-based alternatives on a regular basis. As a result, manufacturers may be challenged to create plant-based products that taste as close to what they’re imitating as possible.

Additionally, affordability may pose a threat to plant-based product growth. At the food service and retail level, plant-based burgers are often more expensive to make than those made from animals. If ingredients don’t become more cost-effective, the growth of plant-based products may stagnate. Still, despite potential hurdles, manufacturers are well-positioned to capitalize on the plant-based product trend, particularly if they can simultaneously manage food transparency demands.

3. Clean Labels

Clean labels represent a commitment to simplicity and transparency in food labeling. At their core, clean labels feature ingredient lists that are short and composed of easily recognizable items. This means steering clear of artificial additives, preservatives, and unpronounceable chemicals that might raise consumer concerns. Instead, clean labels prioritize natural and minimally processed ingredients that people can understand at a glance.

The movement towards clean labels is driven by a consumer desire for authentic and wholesome products. People want to know exactly what they are consuming and where it comes from. Clean labeling practices help in assuring customers about the quality and safety of the products, fostering a sense of trust and loyalty towards the brand. Moreover, as health-consciousness continues to rise, clean labels resonate strongly with those looking to make informed choices that align with their wellness goals. This trend not only benefits consumers but also encourages manufacturers to adopt more transparent and sustainable practices in their production processes.

While there is currently no universally mandated date for all products to adopt clean labels, the trend indicates that staying ahead of consumer expectations is crucial for brands. As a practical consideration, manufacturers should keep an eye on evolving legislation and industry standards to ensure compliance with emerging guidelines and to maintain consumer trust. This proactive approach is key to navigating the ever-changing landscape of the food and beverage industry.

4. Transparency in food production

Transparency isn’t just a buzzword; it’s a demand. Consumers want to know where their food comes from, how it’s made, and what’s in it. This includes everything from sourcing practices to production methods. Ethical sourcing, sustainable farming, and humane animal treatment are all under the microscope. Brands that can demonstrate transparency in their supply chains are winning consumer loyalty and standing out in a crowded market.

Manufacturers are increasingly adopting transparent sourcing practices to meet consumer demands for ethical and sustainable products. This involves providing detailed information about the origins of their ingredients, farming practices, and the overall supply chain. By sharing stories about their sourcing methods, companies can build a strong connection with consumers who value authenticity and integrity.

Regulatory frameworks and certifications are playing a crucial role in this transparency movement. For instance, labels such as Fair Trade, USDA Organic, and Non-GMO Project Verified provide consumers with assurance about the ethical and environmental standards upheld during the production process. These certifications are not just marketing tools; they reflect compliance with stringent guidelines aimed at promoting sustainability and ethical practices.

Statistics support the trend towards transparency and its positive impact on sales. According to a 2021 study by IBM and the National Retail Federation, nearly 70% of consumers in the U.S. believe it is important for brands to provide clear information about their sourcing practices. Moreover, products with transparent labeling have been shown to experience a 6% higher market growth compared to those without, indicating a clear consumer preference for transparency.

To stay competitive, manufacturers must prioritize accountability in their supply chains. This includes adopting blockchain technology to provide traceability and implementing more rigorous auditing processes to verify sourcing claims. As the market moves forward, transparent practices are not just a trend but a fundamental component of building trust and ensuring long-term consumer loyalty in the food and beverage industry.

Technology trends in the food and beverage industry

Technological advancements in food and beverage manufacturing

In addition to health and wellness trends, technology is revolutionizing the food and beverage industry. Three key technological advancements are particularly noteworthy: blockchain technology, AI-driven predictive analytics, and robotics. These technologies are not just enhancing efficiency but also addressing critical challenges faced by the industry.

Blockchain technology

Blockchain technology is emerging as a game-changer in the food and beverage sector, particularly in terms of ensuring transparency and traceability in supply chains. Blockchain is a digital record-keeping system spread across many computers, making it hard to change past information. The unchangeable and transparent nature of blockchain makes it ideal for tracking the journey of food products from farm to table.

For instance, by implementing blockchain, manufacturers can provide consumers with detailed information about the origins of their ingredients including the farming methods used, how the food was processed, and the path it took through the supply chain. This level of transparency can help build consumer trust and loyalty. Additionally, blockchain can play a significant role in ensuring food safety. In the event of a contamination outbreak, blockchain enables rapid traceability, allowing for quick identification and removal of the affected products, thereby minimizing health risks.

AI-driven predictive analytics

Artificial Intelligence (AI) driven predictive analytics is another transformative technology in the food and beverage industry. Predictive analytics involves the use of historical data, machine learning algorithms, and statistical techniques to predict future outcomes. In the context of food and beverage, AI-driven predictive analytics can help companies forecast demand more accurately, optimize inventory levels, and enhance supply chain efficiency.

By analyzing patterns and trends in consumer behavior, sales data, and external factors such as seasonal changes, AI can provide insights that enable manufacturers to make data-driven decisions. This can lead to reduced waste, better management of resources, and improved customer satisfaction as products are available when and where they are needed. Additionally, predictive analytics can assist in quality control by identifying potential issues in the production process before they become significant problems, thus ensuring consistent product quality.

Robotics

The integration of robotics in the food and beverage industry is addressing one of the critical challenges of labor shortages. Robotics technology is being employed to automate repetitive and labor-intensive tasks, improving efficiency and reducing the reliance on manual labor. From robotic arms used in packaging and palletizing to autonomous robots for sorting and inspecting products, these machines are enhancing operational efficiency.

Moreover, robotics can perform tasks with precision and consistency, minimizing human error and enhancing overall productivity. For instance, robotic systems can be used for tasks such as precision cutting, ingredient mixing, and even cooking, ensuring that the food products meet high standards of quality. As labor shortages continue to challenge the industry, the adoption of robotics is becoming increasingly essential for maintaining production levels and meeting consumer demand.

Challenges for food and beverage manufacturers

Staying informed of trends

With trends evolving at a rapid pace, it can be challenging for manufacturers to keep up. What’s popular today might be outdated tomorrow. This constant state of flux requires a keen eye on market research and consumer behavior. Manufacturers need to be agile, ready to pivot and adapt their product lines to meet new demands.

Adapting to these health and wellness trends isn’t without its risks. From sourcing high-quality ingredients to ensuring compliance with new regulations, manufacturers face numerous challenges. Risk management strategies and solutions are essential. Here are some key strategies and solutions:

Sourcing high-quality ingredients

1. Supplier audits and certifications: Conduct regular audits of suppliers to ensure they meet quality standards. Working with suppliers who hold relevant certifications, such as Global Food Safety Initiative (GFSI), can help guarantee the quality and safety of ingredients.
2. Diversification of supply chain: Relying on a single supplier can be risky. Diversify your supply chain by establishing relationships with multiple suppliers. This ensures that if one supplier faces issues, you have alternatives to source from, mitigating the impact on production.
3. Implementation of stringent quality controls: Establish comprehensive quality control processes. From initial sourcing to final product testing, having strict protocols ensures that only high-quality ingredients are used. Implementing technologies like blockchain can add an extra layer of transparency and traceability.
4. Sustainable and ethical sourcing: Engage in sustainable and ethical sourcing practices. This doesn’t just mitigate risks associated with supply chain disruptions but also aligns with consumer expectations for environmentally and socially responsible products. Ensure your suppliers adhere to fair trade practices and environmental standards.

Ensuring regulatory compliance

1. Stay updated with regulations: The regulatory landscape is constantly evolving. Manufacturers should have dedicated teams to monitor changes in regulations and ensure the business stays compliant. Subscribing to industry newsletters, joining professional organizations, and attending relevant workshops can keep your team informed.
2. Regular training programs: Implement continuous training programs for employees on regulatory requirements. This ensures that everyone, from senior management to operational staff, is aware of compliance obligations and understands the best practices to follow.
3. Leverage technology for compliance: Utilize software solutions designed for regulatory compliance. These tools can help track and document compliance activities, prepare for audits, and manage necessary certifications. Automation of compliance processes can reduce the risk of human error.
4. Collaboration with regulatory experts: Partnering with regulatory experts or consulting firms can provide valuable insights and guidance on compliance matters. These experts can assist in interpreting complex regulations and advise on best practices for maintaining compliance.
5. Internal audits and third-party inspections: Conduct regular internal audits to ensure compliance with regulations and quality standards. Additionally, inviting third-party inspectors to evaluate your operations can offer an unbiased review and highlight areas for improvement.

By implementing these risk management strategies and solutions, food and beverage manufacturers can not only ensure the quality and safety of their products but also build trust with consumers and maintain a competitive edge.

The future of the food and beverage industry

As discussed, the food and beverage industry is at a pivotal juncture, driven by evolving consumer expectations and groundbreaking technological advancements. Transparency and sustainability have become key pillars, with consumers increasingly demanding detailed information regarding sourcing, production methods, and ethical practices. The integration of blockchain technology, AI-driven predictive analytics, and robotics are revolutionizing operational efficiencies, ensuring food safety, and addressing labor challenges. However, with these advancements come inherent risks that necessitate robust risk management strategies, stringent quality controls, and a proactive approach to regulatory compliance.

For manufacturers, staying ahead means adopting a holistic approach that incorporates modern technologies, ethical sourcing, and agile adaptation to market trends. By prioritizing transparency and leveraging innovative solutions, brands can foster consumer trust and loyalty, ensuring not only compliance with evolving standards but also sustained growth and competitive advantage in a dynamic market. The future of the food and beverage industry lies in the delicate balance between innovation and tradition, efficiency and sustainability, ultimately paving the way for a thriving, trustworthy industry that meets the needs and values of modern consumers.