Total store CPG volumes increased for the first time in three years — growing 1.1% for the year-to-date ending Sept. 29 — as consumers embraced value and e-commerce channels to manage high food prices, Circana shared in a recent webinar.
However, 2024 CPG dollar sales grew at the lowest rate — 2.5% year-to-date — in three years, compared to 4.7% and 8.6% in 2023 and 2022, respectively, according to Circana data. Price increases largely contributed to dollar sales growth in recent years. Volumes declined 2% in 2022 and 1.2% in 2023, due to inflation and high food prices.
“In normal times — where we are not in a compounded growth rate for pricing — 2-3% [volume growth] is the norm. We have actually been hovering at a lower than [normal rate] throughout the whole year. And what that has done is — even though we have volume growth — it is on a lower price versus a year ago, therefore ... the dollars have also softened,” elaborated Sally Lyons Wyatt, global EVP and chief advisor of CPG and foodservice at Circana.
2024 retailer trends: Ecommerce & value channels on the rise, private label continues growth
Four key trends are increasing volume and cutting into dollar sales in 2024, including value and ecommerce channels growth, private-label growth outpacing national brands, consumers moving away from mainstream products, and convenience store (c-stores) trips declining, said Wyatt.
Value channels and ecommerce are “driving 35% of food and beverage volume growth,” with ecommerce accounting for 10% of total dollar sales, Wyatt shared. Online ordering and in-store pickup and online ordering and delivery to home options were the two most popular means of ecommerce shopping, each accounting for 3% of total ecommerce dollar sales, according to Circana omnichannel data for the year ending Sept. 1.
Consumer demands for value-focused products boosted private label products, as many large CPG companies, like PepsiCo, struggled to maintain volume growth in 2024. However, consumers still treat themselves to premium and super premium foods and beverages, Wyatt explained.
Super premium foods and beverages outgrew private label in volume sales, increasing 4.3% and 3%, respectively, for the year ending Aug. 11. Premium foods and beverages rose 1.9% while mainstream products declined 1% for the same period.
“Many retailers have done an amazing job of getting their own brand out into the store with similar quality, with similar tastes, with similar forms as the national brand. And I think what this is showcasing is ... having a variety of options in your portfolio [is] so important because of what the consumer is seeking,” Wyatt elaborated.
Recently, Aldi’s US President, Dave Rinaldo, outlined the private label retailer’s ambition in the US, highlighting the importance of innovating alongside food manufacturers.
Consumers shift to in-home occasions, c-store volumes slump
In 2024, consumers embraced “just-in-time shopping”— making more grocery trips but buying fewer items — and opted to eat at home more often. Shoppers increased trips to the store by 8.7% in 2024 but purchases per trip dropped 11%, Circana reported.
Shoppers also reined in out-of-home and c-store spending, as volume c-store sales declined in back-to-back quarters, Wyatt explained. However, 2025 might see away-from-home meals and c-store spending increase, as more companies demand employees return to the office five days a week, she added.
Third quarter c-store volume sales declined by 5.4%, compared to a drop of 3.1% in the second quarter and a 1.2% decline in the first quarter. Additionally, out-of-home meal traffic (i.e., foodservice) was down 2%, while in-home traffic increased 1.1%, according to Circana data for the year ending Sept. 8.