Convergence in Global Food Demand and Delivery
by Anita Regmi, Hiroyuki Takeshima, and Laurian Unnevehr
Economic Research Report No. (ERR-56) 39 pp, March 2008
Globalization and income growth are resulting in increasing
similarities worldwide in diets and food delivery mechanisms. Using
consumer food expenditure data and food vendors' sales data, this
report demonstrates that food-purchasing patterns and food delivery
mechanisms of high income countries are being increasingly copied
by both upper middle-income countries (Mexico and Poland, for
example) and lower middle-income countries (Brazil and China, for
What Is the Issue?
With increasing convergence in food systems, both the benefits
and problems associated with modern food delivery are becoming more
universal. For example, income growth and globalization of the food
industry have improved access to and availability of an array of
nutritious food products worldwide, promoting global trade in these
products. The ongoing changes in food supply chains have
contributed to modernization of food marketing in many developing
countries, spurring agribusiness development and the establishment
of modern food standards and regulations.
However, greater access to highly processed and calorie-rich
foods has also led to an increased incidence of obesity worldwide.
And globalization, which facilitates the standardization of food
delivery, also heightens the risk of cross-border food
contamination. Given such potential concerns, there is a need to
better understand the dynamics of the global food industry, the
pace and direction of change in food consumption patterns, and the
evolution of the food retailing and foodservice (restaurant)
sectors across countries.
What Did the Study Find?
Middle-income countries are beginning to resemble high-income
countries in their food purchasing patterns at both retail and
foodservice outlets. Middle-income countries appear to be following
trends associated with high-income countries, with upper
middle-income countries fast approaching the per capita expenditure
and sales levels of high-income countries and lower middle-income
countries also gaining.
Analyses of food expenditures across 47 countries indicate
significant convergence in consumption patterns for total food,
cereals, meats, seafood, dairy, sugar and confectionery,
caffeinated beverages, and soft drinks. That convergence reflects
consumption growth in middle-income countries due to rapid
modernization of their food delivery systems, as well as to global
The convergence trends were faster in the early 1990s but slowed
somewhat during the late 1990s and early 2000s, perhaps a result of
slower income growth during the latter period. Convergence in total
food expenditures, though, remains significant, particularly for
meat, dairy, sugar, and caffeinated beverages.
Significant convergence in food expenditures for high-value
products and packaged food implies a modernized food delivery
system that makes these products available to consumers.
Convergence across high- and middle-income countries is evident in
several measures of food system modernization, including consumer
expenditures on packaged foods, supermarket sales, and foodservice
(particularly fast-food) sales.
The analysis also found evidence of convergence in the
attributes of new food products introduced in both high- and
middle-income countries. The share of labels with attribute claims
of "natural," "convenient," or "high quality" tends to increase
with the affluence of a given market. Convenience, for example,
accounted for 27 percent of all label claims in Japan (a
high-income country), 12 percent of total claims in Mexico (an
upper middle-income country), and 6 percent of claims in Egypt (a
lower-middle-income country). Such differences are to be expected
given the higher opportunity cost of time in high-income
Labels claiming healthful nutrients, such as added vitamins and
minerals, showed a reverse trend, accounting for 51 percent of all
claims in Indonesia (lower middle-income), 33 percent in Hungary
(upper middle-income), and 27 percent in Japan. Even though
preferences in developing countries are evolving toward those of
consumers in high-income countries, many consumers in developing
countries still prioritize obtaining adequate nutrition. Consumers
in high-income countries, who may take adequate nutrition as a
given, focus more on avoiding unwanted nutrients (as represented,
for example, in the sale of low-fat foods) or attaining other
attributes like organic sourcing.
Findings of convergence in food expenditures are important
because they imply that demand for higher valued food products will
continue to be strong in developing countries. As market
opportunities for agricultural producers, distributors, and
retailers grow in these countries, regulations and standards for
food safety and quality will become increasingly important.
How Was the Study
Annual data on 47 countries were collected from Euromonitor
International for food expenditures and for total food sales from
retail and foodservice outlets, covering 1990-2004. Data on product
label claims were obtained from Product Scan, covering 2001-05.
Using regression analysis, the expenditure and sales data were
examined to evaluate whether convergence trends exist in food
expenditure patterns and in food sales by retail outlet type across
different countries. While past studies have examined convergence
in food consumption patterns among high-income countries in Europe
and North America, this study expands the analysis to cover
middle-income countries and methods of food delivery.
Consumer demand for various food attributes was also analyzed
using label claims on new products introduced in high- and
middle-income markets. Convergence trends in expenditures were
analyzed for total food, packaged food, and 11 food subgroups.
Convergence trends in food delivery examined food sales from retail
outlets such as supermarkets, hypermarkets, discounters, and
convenience stores, while trends in foodservice outlets included
fast-food sales and total foodservice sales.