- Six in 10 consumers who shopped for food in April said they had difficulty finding specific items, according to Morning Consult’s latest supply chain and inflation report. However, most consumers eventually tracked down and bought grocery items that they had rated as hard to find.
- For consumers who considered but did not purchase a certain grocery item, 41% cited its unavailability, while another 35% were influenced by its high price, according to Morning Consult’s previous survey.
- As supply chain bottlenecks result in empty store shelves and food prices continue to rise, consumers are increasingly changing their buying behavior to cut costs, including taking advantage of discounts and buying private label brands.
Shortages across the food and consumer goods industry have become a mainstay of the pandemic. Over the past year, everything from cereal to cream cheese have disappeared from store shelves, as ongoing supply chain issues throw up roadblocks. Most recently, a widespread shortage of baby formula, which came in the wake of a product recall and plant closure, led President Biden to invoke the Defense Production Act this week to boost supply.
Along with shortages, consumers are also grappling with record-high food prices. According to the latest Consumer Price Index data, food-at-home prices saw their largest 12-month increase in over 40 years. Recent data from Inmar Intelligence revealed that in response, some consumers are buying less food items overall, with more than one-third stating that they have either reduced the number of items that they purchase per trip or have stopped shopping for food as much.
One group shifting their buying habits significantly are millennials and Gen Z, whose spending decreased 9% and 12% in March, respectively, compared to a year ago, according to an analysis by Morning Consult. Millennials, who typically spend more on groceries than other generations, are now cutting spending in several areas, the data firm stated.
More consumers are also concerned with prices on food staples, Morning Consult found. Over half of all consumers noticed that meat prices have increased, according to the firm. Nearly half of all consumers (49%) said that they are “very concerned” with meat price increases, with produce and dairy following at 40% and 39%, respectively.
The rise in food prices has given lower-priced private brands an opportunity for growth. Morning Consult found that among all U.S. adults, 43% said that they are now often buying private label to cut costs, compared to 36% last October. This number was the highest for millennials, 45% of whom are buying store brands, and for households earnings less than $50,000 (47%).
Companies that sell private label items are seizing on the opportunity for growth. TreeHouse Foods saw strong sales in its fiscal first quarter, with a 7.9% increase compared to the same period in 2021. CEO Steve Oakland said in a statement that private label is “becoming increasingly important to our customers and their consumers as they manage a higher cost macro environment and seek better value.”
While private label has an opportunity to grab onto the growth, it also is not immune to supply chain challenges. In TreeHouse Foods’ most recent quarterly earnings call this month, Oakland said that the company is still working through issues around materials, ingredients and packaging, and that supply chain issues have limited the company’s ability to meet demand.
“Our supply chain limits have really been the inhibitor for us, not the demand piece,” he said. “And so as that slowly improves, we think the absolute volume and units are going to improve.”