Packaged Food in the US

Innovation emerges as key to growth in an increasingly competitive market

In 2018, sales growth recovered slightly within US packaged food, with a small uptick being registered relative to the slower than usual growth witnessed in recent years. Much of this better performance came as a result of strong value growth in health and wellness areas, which are experiencing sustained growth in demand.

Revamping of traditional concepts of packaged food products

Much of the innovation in packaged food can be described as a revamping of traditional products to better align with changing eating habits and health trends. New offerings following this theme can be found throughout the area, representing some of the biggest growth drivers for manufacturers.

Mergers and acquisitions continue to provide opportunities for growth

The common theme in the competitive environment in packaged food in 2018 has been mergers and acquisitions. Large, long-established companies still need to innovate to maintain their success, with many of these companies having found that it is more cost-effective to acquire small and innovative companies rather than focusing on in-house research and development.

Online grocery retailing slated for aggressive expansion

E-commerce is having a huge impact on nearly all retail areas, with packaged food fast becoming no exception. Every day, more and more consumers are shopping for their groceries online, with this trend expected to grow even faster during the coming years.

Further consolidation and innovation expected

On the heels of slower than usual growth in recent years, US packaged food players are expected to see annual growth that, while consistent, will fall short of past performances, with milder sales growth projected for the foreseeable future. This slowdown in growth appears to be at least partially attributable to rising incomes in a healthy economy and the growing number of young single urban consumers - dynamics that have resulted in shrinking family sizes and increased ability to spend a greater portion of income on eating outside the home.

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