Grocery stores have been in a state of flux in recent years, influenced broadly by the economy and supply chain issues and, at the store level, by how consumers want to shop. This year, grocery bills are expected to exceed $300 a week, which in turn will impact the choices consumers are making at the shelf as they juggle brand loyalty and price. Therefore, it will be more important than ever for grocery stores to curate products that play to both value and breaking food trends.
With that in mind, let’s take a look at some of the trends that are influencing everything from store formats to product labeling to shopping habits — and how people are connecting over food.
Consumer Packaged Goods: Labeling Matters
More than ever, we’ve seen greater demand for clean labels: People want full transparency around ingredients in their food. In 2024, labeling will play an even bigger role.
Take THC-infused products, for example. As cannabis legalization expands, consumers are increasingly curious about these novel offerings — and cautious. Product labeling and marketing could play a critical role in consumer perception, but there’s a debate within the industry about how much information to provide.
The argument for strong labeling on cannabis products focuses on consumer safety and education: detailed labels that cover potency, effects, risks, and compliance with regulations for quality control. This information could help consumers make choices and have a better experience with THC-infused products. However, opponents argue that such labeling might perpetuate negative stigma, overwhelm consumers with complex information, burden producers — especially small businesses — and potentially promote misuse by emphasizing potency.
We’re also seeing a similar shift in consumer expectations around meat and milk substitutes. While more and more products are entering the market every year, leaders like Impossible Meat and Oatly have seen losses. Consumers want less complicated labels, fewer fillers, and more health-boosting nutrients. The expected challenge for these leader brands will be to re-formulate and improve their marketing efforts to focus on functional foods and benefits of plant-based diets.
Economic Factors
Although the USDA predicts that at-home food inflation will slow to about 1.2 percent in 2024, food prices are still high. Consumers are increasingly aiming to maximize dollars — even if it means sacrificing quality and the emotional connection to the brands they love.
This economic pressure has most notably impacted produce. Higher quality often equals higher costs, creating conflicts for consumers who value quality and affordability. The same is true for packaged goods. In the case of fresh foods, it’s up to grocery stores to find creative ways to offer value through bundles, discounts and loyalty programs.
Anecdotally, rising inflation and “shrinkflation” seem to be pushing shoppers toward big-box and club stores. Sales of brand-named basics are faltering, and conventional grocery stores are witnessing a decrease in overall shopping. Consequently, there’s increased stress on the fresh departments to perform well for grocery retailers.
Meanwhile, consumers are progressively aware of the environmental impact of their food choices and demanding more sustainable products, from production practices to packaging. The conundrum for everyone is that sustainably produced goods cost more. Grocery stores have the opportunity to educate consumers on the long-term gains of sustainable choices.
Reshaping Store Formats
In 2024, the convenience store industry will continue to see growth, as well as new and more premium formats, like the Gelson’s Markets partnership with Rove. These fresh formats strive to provide quality, convenience and a better shopping experience, potentially redefining what convenience stores can offer. The “gas station sushi” punchline won’t be landing the same way in the future.
The integration of new shopping technologies, including online ordering, self-checkout, and pickup services, has been accelerated. However, 2023 also saw a score of closures among pickup and delivery-only formats. This seesaw emphasizes the vital need to balance tech efficiency with human interaction.
Labor Challenges and Solutions
Labor shortages are a significant challenge for the grocery industry — there aren’t enough people to work checkout stands or keep shelves stocked. Grocers are also exploring creative staffing solutions, like flexible scheduling and employee incentives, to attract and retain workers.
Innovative grocery stores are also adopting new technologies, like automated inventory systems, self-checkout kiosks, and even robotic assistants. Yet, we know that consumers are craving more human connection, not less, and as noted above, efficiency can’t be the only goal. New technologies allow the opportunity for staff to spend more time assisting customers and building the store’s community.
Bringing People Together
A more heartwarming trend for 2024 is the emphasis on bringing people together. As consumers seek affordable ways to connect, we’re seeing an upsurge in content centered on getting together for breakfast or brunch. Hosting the first meal of the day can be as enjoyable as it is economical — there are so many creative options, from simple, cozy breakfasts to elaborate brunch spreads.
Another emerging trend is transforming homes into social hubs. Instead of expensive nights out, consumers are recreating these experiences at home, like a Friday bar with DIY cocktails and movies or music. This shift not only affects grocery shopping choices, but also widens opportunities for brands to meet these new home-based experiences with fresh content marketing.
Long gone are the days when grocery could be considered a sleepy, stable aspect of the retail sector. It’s clear that the industry is at a crossroads of various dynamic economic, technological and sociographic trends.
As brands and stores adapt to changing trends, the underlying theme is clear: staying attuned to consumer needs and preferences will be crucial for success in 2024 and beyond.
Brian Brown is the president at Ingredient, a food marketing agency that inspires meaningful connections between consumers and brands.
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