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ERS analyzes data collected by various national (U.S. trade data
from U.S. Department of Commerce) and international organizations
(United Nations trade data, consumer expenditures and other economic
indicators from the World Bank), and a commercial vendor (Euromonitor)
to examine ongoing evolutions in global food markets.
International Consumer Trends
Consumer food expenditures in recent years (see Excel table) indicate a shift toward consumption of higher value food
products across all income levels. As income grows, consumers in
lower income countries shift their food purchases away from carbohydrate-rich
staple foods toward more expensive sources of calories, such as
meat and dairy products. (See Richer
World Wants a Richer Diet for more information.) An examination of food expenditures and food sales data indicates that middle-income countries, such as China and Mexico, appear to be following trends in high-income countries, measured across several dimensions of food system growth and change. These include trends in important food expenditure categories, such as cereals and meat, and in indicators of food system modernization, such as supermarket and fast food sales. (See Convergence in Global Food Demand and Delivery for more information.)
The changes in food consumption patterns are largely driven by
income growth and demographic factors, particularly lifestyle changes
brought about by urbanization, away-from-home employment of women,
and increased levels of information. While income growth, which
affects the purchasing power of consumers, is one of the most important
factors contributing to demand changes, urbanization has been equally
important in changing the composition of the food basket consumed.
Urban areas are generally associated with higher income levels,
larger number of women in the away-from-home workforce, higher levels
of education, and a wider array of food products available. Economic
growth can continue indefinitely and go in cycles. However, urbanization
has so far been a one-way process and, as occurred in developed
countries, eventually the rural share of the population becomes
so low that urbanization is no longer an important factor in projecting
food demand. Among developing countries with a large share of rural
population and rapid rates of urbanization, urbanization is expected
to significantly alter consumers' diets with a greater consumption
of meats, fruit, vegetables, and processed food products. (See Where
Will Demographics Take the Asia-Pacific Food System? for more
information on these and other demographic trends.)
(see Excel table)
Urbanization and income growth are also associated with more household
amenities that enable consumers to purchase and store perishable
food products. During the last decade, the percentage of households
possessing refrigerators (see Excel
table) increased significantly in most developing countries.
Similarly, the percentage of households owning microwave ovens (see
Excel table) is rising
across countries, promoting sales of "ready meals."
Retail Trends
Analysis of retail sales data (see Excel
table) reveals further trends in food consumption patterns
across countries. Packaged
food products account for large shares of total food
expenditures among consumers in high-income countries where
the demand for convenience is growing. The United States,
the European Union, and Japan account for over half of total
global sales of packaged products. In developing countries,
intermediate products—such as vegetable oils, dry pasta,
and other dried products—account for the bulk of retail
sales. However, market trends indicate strong growth in
sales of packaged food products among developing countries.
This growth involves three-fourths of the world's consumers
and is partly due to rapidly growing income levels.
Trends in the soft drinks and beverage sector are often an indicator
of consumer ability to purchase higher value foods, and foreign
investment in the beverage sector often functions as a bellwether
for the health of local food industries. (See Globalization
of the Soft Drink Industry for more information.) Analysis of
soft-drink retail sales data (see Excel
table) indicates a rapidly expanding sector with large sales
growth in Eastern Europe and Asia. Markets in developed countries,
however, are sluggish, particularly for carbonated drinks. Carbonated
drinks face strong competition from fruit juices and various health
and ethnic drinks. In many developing countries such as India, where
growing affluence has spurred the demand for clean drinking water,
increased demand for bottled water has further boosted total soft
drinks sales.
Demand for process attributes has increased consumption of quality-assured
products—such as organic foods—in many developed countries
and among small wealthy segments of some developing countries. In
many countries, particularly in Western Europe, this has resulted
in increased sales of private retail
brands (see Excel table),
because retailers can set and enforce their own product quality
standards. In developing countries, expansion of supermarket chains
has also introduced private retailer brands, mainly as cheaper substitutes
for major manufacturer brands.
See the recommended reading page for
ERS reports and articles related to international consumer and retail
trends.
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