How Major Food Brands Respond to Lower Spending

By: Anneken Tappe · April 09, 2024 · Reading Time: 2 minutes

Americans Cut Back

Economists have been wondering when consumers would start cutting back on their spending in the face of high prices. But for certain groups that has already taken effect. Lower-income earners are reshuffling their food spending, and that’s forcing major food brands to adapt.

High inflation, which has fueled significant price hikes for food in recent years, has been a major issue for American consumers — especially those with limited discretionary spending.

According to NielsenIQ’s Food in America survey, people now spend $132 on what only cost consumers $100 in 2019. That’s a particular issue for Americans who haven’t received a significant raise over the past few years.

Brands Adapt

Years of sustained high inflation coupled with the expiration of pandemic-era government benefits have caused this shift in spending, and lower-income Americans are prioritizing foods that provide the most bang for their buck.

In response to falling sales from low-income consumers, many major food makers are switching strategies and opting for more protein-packed snacks in more affordable sizes. For example, Conagra Brands (CAG), for example, which owns Birds Eye and Swiss Miss, has introduced cheaper family-sized packs.

If they aren’t offering new products, other food makers, such as Kraft Heinz, are leaning into discounts and other incentives to get buyers back.

Read more reporting here .

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