Consumer Grocery Trends Amid the 2024 Pricing Squeeze
Introduction: Navigating the 2024 Pricing Squeeze
At the top of the year, it felt as if most economic experts forecasted an imminent recession. Paired with growing anxieties that tend to reignite around election years, consumers were seemingly bracing for the worst.
The good news? By most accounts, financial experts from institutions like Bank of America and U.S. Bank are no longer forecasting a recession.
However, when we surveyed American consumers in September, we found stark behavioral changes in grocery shopping habits, in part due to anxiety around the recession. Here are three key takeaways we pulled from our survey:
Takeaway 1: Economic Concerns Driving Consumer Behavior
Even with more optimistic forecasts, it seems like consumer anxiety remains high. Our survey revealed that even towards the end of 2024, 72% of consumers are still concerned about a potential recession.
When consumers were asked whether the potential threat of a recession has impacted the way they eat, 61.5% of consumers reported cooking at home more frequently to cut back on costs. This insight is critical for CPG brands looking to position their products as budget-friendly or easy-to-make meals for price-conscious consumers.
Price consciousness was a common theme throughout survey responses. When asked how the potential threat of a recession has changed how they shop for groceries, 45% of respondents said they are grocery shopping at multiple retailers to find the lowest prices available. Delivering value to these consumers within off-site environments like recipe pages could be a significant way to streamline these pain points in the purchasing journey.
As consumers continue to prioritize and reshape their grocery shopping habits around cost-saving, we need to turn our attention to their growing willingness to try affordable product alternatives - like private label options.
Takeaway 2: Growth of Private Label Products
One of the most significant findings from our survey was the growing shift towards retailer owned brand products. 54.6% of respondents have reported already swapping for cheaper brands or store brands in the face of a potential recession.
When directly asked whether they have already started purchasing more retailer owned brand products in anticipation of a potential recession, 61% of respondents said they have begun doing so.
Here’s where it’s critical for CPG brands and agencies to home in on price consciousness when building out their targeting strategies. When asked which categories they’d most likely substitute with retailer owned brand products, pantry staples (66%) and dairy products (57%) led other categories by a significant margin.
CPG brands can leverage this to defend against consumers changing to alternatives like retailer owned brand products. Pantry and dairy brands can drive brand loyalty by educating shoppers on the long-term value of buying higher quality, brand-name products.
Now, let’s explore online recipe usage in the face of recession concerns, and how recipes serve as the ideal environment to meet price-conscious consumers.
Takeaway 3: The Role of Digital Recipes in the Pricing Squeeze
In our 2024 State of Online Recipes report, we found dramatic growth in online recipe usage. In fact, 91% of consumers reported regularly using digital recipes, pointing to these publications as significant touchpoints in the consumer purchasing journey.
When asked whether their online recipe usage has changed due to concerns of a potential recession, 40% of consumers directly attributed the recession to using online recipes more. It’s evident that, regardless, digital recipes are playing a growing role in influencing meal planning, especially with a looming recession in mind.
The takeaway? CPG brands can seize this moment by integrating themselves within contextually relevant ad environments like online recipe pages, aligning product suggestions beside recipe content. This is especially critical when you consider that recipe pages also inspire over 80% of consumers to purchase a new ingredient or product they have not purchased before.
Conclusion: Leveraging Digital Recipes to Reach Price-Conscious Consumers
Ultimately, our survey highlights the growing shift towards retailer owned brand products and online recipe growth in the face of economic uncertainty. Consumer behaviors and shopping habits are adapting accordingly, and online recipes are a critical touchpoint to reach them during points of inspiration.
At the heart of this insight lies our key recommendation: contextually relevant ad environments, like online recipe pages, offer a unique opportunity for CPG brands to strategically target price-conscious consumers as they face a pricing squeeze.
By leveraging unique contextual ad formats across high-intent environments like digital recipes, CPG brands and agencies can meet consumers in the right mindset, offering affordable and easy-to-make solutions that directly address their financial concerns. Reaching consumers at the point of inspiration can not only increase media efficiency, but also position brands as a viable solution during a pricing squeeze.