In the 1970s, my typical breakfast consisted of multiple bowls of sugary cereal with a glass of milk and orange juice. Today, my children, of ages similar to mine in the 70s, have never eaten sugary cereals, and breakfast juice consumption is an uncommon event. On a recent family vacation, as I watched my kids eating yogurt and berries for breakfast, it led me to wonder what available data might tell us about current breakfast food trends and the direction they are heading.
Anyone involved in the food and agribusiness industry is undoubtedly aware of the real and perceived trends of recent years: sugar has become almost taboo, protein is in, and fats are not the concern they were a decade ago. This past January, medical research, slowly building over the past 15 years, culminated when new federal dietary guidelines put a recommended limit on sugar and removed dietary cholesterol as a nutrient of concern.
However, scientific research isn’t the only factor behind America’s changing eating habits. Broad lifestyle changes among the populace, and more specifically the burgeoning millennial generation, have also had a major impact: later marriage, active social lives, health and fitness focus, distrust of “big food” corporations, environmental concerns, and addiction to smartphones and social media. Small meals or snacks eaten throughout the day have been replacing the age-old advice of eating “three square meals” each day.
What’s for breakfast?
Arguably, these trends have had the greatest impact on how Americans eat their morning meal. Breakfast cereals and fluid milk have been in decline for years – after all it’s difficult to eat a bowl of cereal, text, e-mail, check phone messages, and commute to work all at the same time? Recognizing the change in consumer lifestyles, many food service chains began offering breakfast on the go – fruit smoothies, breakfast sandwiches, and wraps. Retailers have responded, in kind, with breakfast bars and nutrition drinks designed to eat “on the go.”
These factors and others have been shaping consumption trends for at least the past decade. However, the “Great Recession of 2008-2009” also had a major impact on consumption patterns. These two recession years skewed the data and overwhelmed the changes in consumer preferences. Retail and food service sales dropped an astounding 7.2% in 2009 due to economic upheaval and decreased disposable income. As an example, total beef expenditures declined nearly 4% in 2009, likely due to the underlying economic conditions rather than a transitory one-year change in consumer preferences.
Because of the havoc the recession played with consumption data, I only considered the five-year period from 2011-2015 when looking at recent breakfast trends. In the rapidly changing retail and food service segments, recent trends are more relevant to today’s decision making anyway. As preface, since the USDA only compiles comprehensive data series for some of most common breakfast foods rather than all commodities, the per capita consumption numbers below involve some assumptions, and for some commodities, commercial disappearance, delivery, or availability data is used in lieu of consumption data. While not perfect, the chart below should fairly represent the underlying changes in actual consumption.
- Berries, including strawberries, blueberries, and raspberries, are among the fastest growing of all food categories (4.2% annually).
- Higher protein categories also tend to be growing: almonds, yogurt, and cheddar-type cheese. However, yogurt consumption, which has been growing for decades has actually declined for the past two years, which not only illustrates that no food consumption trend lasts forever, but also the trend away from sugar
- Fluid milk consumption continues its decades-long decline due to the downturn in cereal consumption, competitive pressure from plant-based “milks,” and demographic shifts.
- Consumption of higher-end Arabica coffee beans is increasing at 2.3% annually, which is about twice the rate of all coffee beans (including instant).
- Orange consumption, including juice equivalent, is in steep decline, though this could be related more to loss of citrus acres in Florida from citrus greening disease in combination with urban development of orchard acres.
- Although there has been plenty of industry supposition that consumers are avoiding sugar like the plague, the combined sugar/sweetener category (including corn sweeteners, honey, etc.) has not really changed much, declining on average only 0.2% annually.
- Similarly, though carbs gained a bad reputation amongst the diet-conscious crowd, the consumption of potatoes (increasing 0.1% annually) and wheat flour (decreasing 0.3%) are not exactly plummeting. Does this data support or contradict our current perceptions?
Where’s the bacon?
Certainly bacon consumption has increased in recent years, right? Actually, no. Per capita pork consumption in 2015 (46.9 lbs. retail weight) was actually lower than it was in 2009 (47.1 lbs. retail weight). Does that imply flat consumer demand for pork? No, not at all. The problem with interpreting meat consumption statistics is that near-term consumption is determined by supply availability. Pork supplies were limited from 2012 through 2014, first due to sky-high feed costs and then by an outbreak of PED virus. Market prices and consumer expenditure data gives clearer insight into consumer preferences. Though pork availability was nearly the same in 2009 and 2015, bacon prices in 2015 were 51% higher. So, it certainly appears that bacon remains very popular with consumers. Looking more broadly, total consumer meat expenditures have increased at an annual rate of 4.8% over the past five years, more than double the average growth rate in disposable income.
What does the future hold?
It is nearly impossible to predict which direction consumer food preferences may head. At present, the trending buzzwords in the retail food industry are local, natural, unprocessed, sustainable, high protein, and low sugar, but soon new buzzwords will be trending in the industry. In summing up the direction of consumer preference, I think we may safely state the following:
- Consumers have been and always will be enamored with innovation and convenience in food offerings.
- Healthy foods have always held attraction, but today, foods contributing to physical fitness and mental stamina may hold more appeal than weight-loss foods.
- Any significant new scientific findings related to food items will impact demand of that item
- As long as the economy stays relatively stable, cost consciousness will likely be a secondary factor in buying patterns as evidenced by the fact that overall food expenditures continue to rise at a faster pace than disposable income.
Rob Fox, serves as Vice President and Dairy Sector Manager for Wells Fargo’s National Food and Agribusiness group. Based out of Chicago, he serves lending offices across the country assisting with customers and prospects involved in the dairy processing industry. In his position, Rob monitors the national Middle Market portfolio of dairy processing companies, provides input into the underwriting process, evaluates collateral coverage, and assists with marketing efforts. Rob has been with Wells Fargo since 2008.
Prior to working at Wells Fargo, Rob spent over ten years working in various agribusinesses related positions including Senior Commodity Analyst with MF Global, Agribusiness Educator with the University of Wisconsin Extension Service, and Economist with USDA’s Foreign Agricultural Service. In addition, Rob owned and operated a 150-cow dairy farm in Wonewoc, Wisconsin.
Rob has a B.A. in Economics from Northwestern University in Evanston, IL, and an M.S. in Agricultural Economics from the University of California, Davis.