The Future of the Food & Beverages Industry: What to Expect in 2024 and Beyond

by | Mar 15, 2024

Get ready for substantial growth as the Food and Beverage (F&B) industry anticipates a remarkable surge. According to the latest forecast from the international research organization IGD, the global grocery retail market is set to generate an additional US$2.2 trillion in sales by 2024, reflecting a substantial 24% increase. This surge is fueled by factors such as an expanding population, a burgeoning middle class, and the flourishing urban and suburban markets, providing businesses access to an ever-expanding consumer base.

This robust growth underscores the inherent resilience and adaptability of the F&B industry. Beyond the sheer market size, the sector is undergoing notable transformations influenced by dynamic consumer preferences, technological advancements, and a heightened emphasis on sustainability. As we approach 2024, F&B businesses must remain agile and align with these evolving trends.

Let’s delve into the upcoming trends and strategies defining the F&B industry in the coming year, ensuring businesses are well-positioned to navigate and capitalize on the evolving landscape.

Exploring Trends in the Food and Beverage Sector: 2024 Outlook

As we enter 2024, the food and beverage sector grapples with ongoing challenges, including supply chain management disruptions, increased inflation, and evolving consumer preferences, particularly in alternative meat and dairy products. Cash-strapped consumers resist further price hikes, prompting manufacturers to explore different strategies. Some may even witness a drop in food prices as a response.

While plant-based offerings encounter a slowdown in demand and scrutiny over quality, the upcoming year holds opportunities for a “course correction” by businesses. The focus will shift towards understanding and meeting consumer preferences to rejuvenate growth in this space. On the other hand, cultivated meat, having gained regulatory approval in 2023, faces challenges in scaling up production, convincing skeptical consumers, and securing necessary funding for expansion.

Artificial intelligence is expected to play an increasing role in the sector in the coming year, influencing various aspects of the industry. Additionally, changes in the breakfast category and a downturn in the beef industry are anticipated trends that will shape the landscape of the food and beverage sector in 2024.

Trends Shaping the Food and Beverage Industry in 2024

The Food and Beverage (F&B) industry stands at the threshold of a transformative year, navigating through a dynamic landscape influenced by evolving consumer preferences, technological advancements, and an increasing focus on sustainability. In this exploration, we delve into six key trends shaping the industry, unraveling the complexities and opportunities that lie ahead.

#Trend 1: Economic Realities: Food Price Relief and Industry Responses

After experiencing two years of price hikes to counter rising costs, food manufacturers face a different challenge in 2024. Companies must explore internal cost management strategies as consumers and retailers resist further price increases. Artificial Intelligence (AI) is emerging as a critical player, offering efficiencies and cost-saving opportunities. Walmart’s push for lower prices pressures manufacturers, ushering in an era of heightened focus on pricing and promotions.

#Trend 2: Rise of Artificial Intelligence: A Transformative Wave in Operations

Artificial intelligence is set to play an increasingly vital role in food and beverage operations. Large and small companies recognize AI’s potential to enhance production, set prices, develop products, and improve supply chain efficiency. The technology’s evolution and improved accessibility make it an attractive option for businesses seeking innovative solutions. As AI’s influence expands beyond production, its application in communications, marketing, and product visuals is anticipated to grow.

#Trend 3: Breakfast Category Evolution: Adapting to Changing Consumer Preferences

The breakfast category faces a turning point as consumer attitudes toward morning meals shift. Recent research suggests a decline in Americans consuming breakfast, as only 35% reported eating in the morning daily last year, according to Statista data. This trend could pose challenges for the category. Breakfast cereal experiences a long-term decline due to a growing aversion to processed ingredients. Major players such as General Mills are adjusting their strategies, with some companies diversifying into snacking and pet food. The category anticipates changes, including a rise in fermented breakfast foods and a focus on nutritional needs.

#Trend 4: Meat Industry Dynamics: Navigating Shifting Demand and Sustainability Concerns

The meat industry will face challenges in 2024, influenced by inflation, environmental pressures, and evolving consumer preferences. Beef faces a decline in production and consumption due to economic caution and a shrinking consumer demographic. Poultry, however, anticipates growth as consumers prioritize affordability. Sustainability concerns, particularly carbon emissions, remain a focal point, prompting industry players to address environmental impacts.

#Trend 5: Cultivated Meat: A Pivotal Year for Commercialization and Challenges Ahead

The cultivated meat industry is undergoing a transformative year, marked by regulatory green lights and ambitious expansion strategies. According to Rabobank’s 2024 beef industry report, a 4.5% decline in production and a 3% drop in beef consumption are projected. The group attributes this to economic caution among consumers globally, including in Asia, potentially leading to decreased beef volumes in the U.S. Despite brands securing funding and making notable progress, challenges underscore the importance of well-defined business plans and a clear path to profitability. Lingering safety concerns and labeling disputes necessitate transparent practices from manufacturers. Forecasts of consolidation in the cultivated meat space echo the evolutionary trajectory in the plant-based sector.

#Trend 6: Plant-based Sector Course Correction: Embracing Plant-based 3.0

The plant-based sector reflects a challenging year marked by operational issues and market disruptions. Leading companies such as Beyond Meat, Planterra, and Impossible Foods face headwinds, prompting a need for course correction. In 2024, the industry embraces “plant-based 3.0,” focusing on consumer needs and nutritional value. A shift toward more natural ingredients, such as mushrooms and legumes, signifies a strategic move to reconnect with consumers and restore positive growth.

In summary, 2024 presents the food and beverage industry with diverse challenges and opportunities, urging businesses to adapt, innovate, and align with evolving consumer preferences.

Optimizing Financial Excellence: A Comprehensive Approach with Prime Source

At Prime Source, success in the Food & Beverage industry relies on efficient financial management. As a seasoned Group Purchasing Organization (GPO), we offer a multifaceted approach tailored to address the specific challenges businesses encounter in this competitive landscape.

  • Exclusive Supply Contracts: Our primary focus is negotiating exclusive supply contracts on your behalf. Leveraging our extensive network and industry knowledge, we secure deals beyond standard offerings, resulting in cost savings and ensuring a reliable, diverse supply chain to safeguard your business against disruptions.
  • Streamlined Purchasing Processes: Recognizing the significance of seamless procurement processes, Prime Source streamlines purchasing operations, eliminating inefficiencies and reducing the burden on your internal resources. Our goal is to make procurement cost-effective, providing your team the capacity to concentrate on core business functions.
  • Industry Insight and Trend Analysis: Staying ahead in the Food & Beverage sector requires a keen understanding of industry trends. Prime Source offers in-depth market analysis and trend insights beyond traditional GPO services. This proactive approach enables your business to anticipate consumer preferences, regulatory changes, and shifts in market dynamics.
  • Cost Containment Strategies: Cost containment is at the heart of our services. We work closely with your team to implement effective cost-cutting strategies without compromising quality. This involves scrutinizing every aspect of your supply chain and operational expenses, identifying areas for optimization, and implementing sustainable solutions.
  • Consultative Partnership: Prime Source acts not as a service provider but as a consultative partner invested in your success. Our team collaborates with yours, offering guidance on industry best practices, expense management, and strategic decision-making. This holistic partnership ensures that your business survives and thrives in the face of evolving market challenges.

By combining the power of exclusive contracts, streamlined processes, industry insights, and consultative support, we empower your business to achieve financial excellence and sustainable growth.

Take Charge of Your Financial Future with Prime Source

Ready to transform your Food & Beverage business into a beacon of financial efficiency? Partner with Prime Source today and unlock a world of exclusive supply contracts, simplified purchasing, and expert financial guidance. Explore the added benefits of nutritional optimization, Food & Beverage GPO, and cost optimization to ensure a comprehensive approach to financial excellence.

Contact us now to schedule a consultation and discover how Prime Source can elevate your financial standing in the Food & Beverage industry.

FAQs

Q1: What Is a Group Purchasing Organization (GPO) in the Food & Beverage Industry?

A1: A GPO is a collaborative platform that leverages the combined purchasing power of multiple businesses to negotiate better deals with suppliers. In the Food & Beverage sector, Prime Source acts as your strategic partner, optimizing procurement processes and securing exclusive supply contracts to enhance cost savings.

Q2: How Does Prime Source Ensure Exclusive Supply Contracts Benefit My Business?

A2: Prime Source utilizes its extensive industry network and knowledge to negotiate exclusive supply contracts tailored to your business needs. By securing deals beyond standard offerings, we ensure cost savings, a reliable supply chain, and diversified procurement sources, safeguarding your business against disruptions.

Q3: What Sets Prime Source Apart From Traditional Expense Management Services?

A3: Unlike traditional expense management, Prime Source takes a holistic approach, acting as a consultative partner invested in your success. We offer comprehensive services, including streamlined purchasing processes, industry insights, and cost containment strategies, ensuring your business achieves financial excellence and sustainable growth.

Q4: How Does Prime Source Address the Challenges of Nutritional Optimization in the Food & Beverage Sector?

A4: Prime Source provides in-depth market analysis and trend insights beyond standard GPO services. We assist your business in anticipating consumer preferences, regulatory changes, and market dynamics shifts. Our consultative partnership ensures your products align with evolving nutritional trends, giving you a competitive edge.

Q5: Can Prime Source Assist in Implementing Cost-Cutting Strategies Without Compromising Quality?

A5: Absolutely. Prime Source collaborates closely with your team to scrutinize every aspect of your supply chain and operational expenses. Through thorough analysis, we identify areas for optimization and implement sustainable solutions that cut costs without compromising the quality of your products or services.

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