Volume growth is expected to remain minimal in 2025

CHICAGO – Market researcher Circana expects dollar sales in food and beverage retail to increase between 2.5% and 4% in 2025. Factors impacting revenue growth include an increase in price realization between 1.5% and 3.5%, continued base price inflation and consumer demand for value-based propositions, Circana said.

Volume is also expected to increase 0-1% due to increased at-home dining in response to food prices and channel migration. The updated forecasts follow Circana’s half-year report, which forecast 2025 US dollar revenue growth of between 2.5% and 3.5%, volume growth of between zero and 1% and higher price realization of between 2% and 3%.

“Consumers are driven by demand for value, which impacts both volume and price/mix growth,” said Sally Lyons Wyatt, global executive vice president and principal advisor at Circana. “We are seeing that channels that provide everyday added value have become more influential. E-commerce solutions also increase convenience and price transparency, with online transactions now accounting for 35% of food and beverage sales growth.”

This year, the food and beverage market performed similarly to Circana’s forecast for 2024: dollar sales rose 2.6%, compared to the researcher’s expectation of 2.3%. Volume rose 1.1%, in line with forecasts for 1% growth in 2024.

“Unpredicted consumer behavior adds complexity to market dynamics,” said Lyons Wyatt. “We are seeing a shift from out-of-home dining, where traffic is down 2%, to in-home dining, where volume is up 1%. Shopping behavior is also changing: consumers are taking more trips (up 8.9%), but buying fewer items per trip… As consumers adopt more selective purchasing habits, they are buying and stocking up on certain products less often, postponing certain purchases and switching to alternatives “Re-evaluate spending based on necessity and create more room for discretionary items.”

Globally, Circana expects US dollar sales to increase 4% in 2025 in the Europe, Middle East and Africa (EMEA) regions. Realized prices are expected to increase by 3% and volumes are expected to perform similarly, with growth between zero and 1%. As a particular area of ​​interest, the researcher identified the private label sector, which now accounts for almost 40% of all food and beverage sales in the EMEA region.

In the Asia Pacific (APAC) regions, expectations reflect comparable growth to sales in the US and EMEA. Sales figures are expected to increase by 4% in 2025 and volume by 1.6%. According to Circana, these numbers will be driven by expected interest rate cuts and a shift in dollar flow from hospitality to retail.