From the economy and inflation to the latest food trends and consumer behavior shifts, attendees at this year’s FMI Midwinter Conference are gearing up to share insights and learn from each other at this week’s event in Florida.
The FMI Midwinter Executive Conference is the year’s first key gathering of the food industry’s leading stores, wholesalers, independent operators, suppliers, service providers and manufacturers. Executive-level food retail industry players will convene for four days of meetings, keynote presentations, educational sessions, networking opportunities and more. The event is held annually by FMI-The Food Industry Association.
Attending this year for the first time as CEO of Advantage Solutions and as a new FMI board member is industry veteran Dave Peacock. “I’m excited to join fellow retail and consumer industry leaders to discuss the top-of-mind topics of the day as we kick off what’s poised to be another dynamic year,” he says.
As he prepares for the conference, Peacock shared his thoughts on six trends and developments that offer a view of what will shape the year ahead in the food retail industry.
- Macroeconomic stability. “As I look at 2024, I tend to be optimistic about where the U.S. economy is heading — maybe more so than a lot of people. I see both a soft landing economically and a consumer that’s resilient. The labor market is still strong, which should lead to continued consumer spending strength. Unemployment remains low and inflation is abating a bit, which should help improve retail foot traffic, especially for categories like food and personal care.
“I continue to see a lot of innovation, continued interest in large legacy brands and a growing appetite for private brands. So right now, for the food and personal care industry, things look favorable as we begin the year. In the face of ongoing geopolitical dynamics and volatility in the world, I recognize that things can change quickly. But, for the moment at least, I remain optimistic that the broader economy will continue to grow, even if a bit more slowly than 2023.” - Pricing stabilization. “With broader inflation reverting back to what we think of as normal levels, pricing in the food and personal care categories should stabilize. This should help people return to more typical patterns of shopping. While manufacturers are innovating primarily at premium price points to cater to consumers seeking indulgences, retailers are very focused on delivering value to their shoppers. This can come in a variety of forms, including an increased focus on building private brands, expanding assortments of value-priced brands and offering more promotions.”
- Food at-home vs away-from-home. “In 2023, we saw a greater level of inflation for food-away-from-home than food-at-home. Given the different cost dynamics and competitive aspects of retail and restaurants, this trend should continue in 2024. This serves as a tailwind for growth in food retail sales more broadly.”
- Focus on unit growth. “Early holiday sales data suggest that top-line sales in 2023 were solid while unit sales actually declined. Interestingly, most manufacturers and retailers we talk to predict they’ll grow unit sales in 2024, but say the industry overall will decline. The bottom line here is everyone is focusing on unit growth, so it will be increasingly important that the products on shelves are productive and priced well.”
- Shrink and theft remain an issue. “We all saw the headlines in 2023, and we’ll continue to see them in 2024 — though perhaps not as many. The issue of shrink and theft will remain a source of frustration for manufacturers and retailers this year, and they’ll continue to test ways to protect certain categories of merchandise without jeopardizing sales.”
- Growing bifurcation among shoppers. “While, as a whole, the U.S. consumer appears incredibly resilient, there’s persistent uncertainty and growing pockets of shoppers who are financially strained. A combination of headwinds will continue to affect some shoppers. The return of student loan repayments, a reduction in SNAP payments and high interest rates have been hard on this segment of U.S. consumers. Those pressures are not going away in 2024, and both manufacturers and retailers recognize a need to cater to two distinct sets of consumers at the same time.”
“The world is changing around us, and it’s always going to be changing,” Peacock says. “We as a company and we as an industry have to continue to evolve and adapt to that change. We have to be flexible and nimble. And we have to do what we say we’re going to do and hold ourselves to a high standard of strategic planning and service excellence.”
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