Top 10 trends driving consumer behaviour in 2023

1. Redefining value

Political instability has risen from #9 to #2 in global issues of concern for consumers. Interest rates and inflation are on the rise and environmental concerns continue. It’s little surprise that cost and value for money are now the dominant factor influencing consumers’ purchasing habits.

Innova Market Insights (IMI) global insights director Lu Ann Williams, says, “Redefining value throughout the food and beverage industry will lead in 2023, as consumers seek brands that listen, understand, and respond to their core values.”

In practice, that means brands and manufacturers need a deep understanding on where consumers draw the line on compromise, because everyone is having to make hard choices.

“They want brands that provide quality, trust and confidence via their product formulations, communications and wider sustainability actions.”

The top responses on product features worth paying more for were fresh products, locally produced products, and functional ingredients that boost physical health.

Meaningful success can come through actions that combine economic benefits with clear health and sustainability goals.

2. Affordable nutrition

Williams says this trend is a “virtually untapped opportunity” that will “persist for years”.

In 2022, 62 per cent of consumers reported a noticeable rise in the cost of food and beverages. In response, they are looking for simple, nutritious, and affordable goods.

The market responded with an 86 per cent increase year-on-year in food and beverage launches with a budget claim.

For Williams, what used to be a focus for lower middle-income countries now offers potential in the richer parts of the world, with consumers saying innovation should focus on making essential nutrition affordable. This gives brands many opportunities to test their capabilities.

To meet the nutritional, environmental, and economic demands of consumers, manufacturers must innovate to extract maximum value from raw materials and the production process.

3. Generational push

While health benefits and affordability are key drivers across all demographics, novel flavours are the siren call for young and experimental audiences. They embrace the new and different, while being extremely responsive to positive engagement from brands. For Gen Z and millennials, food and brand choices are important signifiers of lifestyle, beliefs, and values.

“Gen Z consumers care about flavour over affordability. That makes sense, because for millennials, affordability, having kids, and the price of housing are really important. And with Gen X and boomer consumers, who might be getting their first high blood pressure reading, naturalness is more important and very much associated with health,” Williams says.

This trend builds on the 2021 Age of the Influencer and 2022 Voice of the Consumer trends, with Williams saying the biggest takeaway from panel discussions with influencers this year was that we are in a new era of two-way conversations between consumers and branded manufacturers.

“More and more consumers want to be involved and say they should be involved. It has never been more important to know your consumer because it’s never been easier to reach consumers,” she says

4. Plant-based: unlocking a new narrative

While 2022 saw the plant-based sector meet some roadblocks with growth slowing, its maturity and move away from simply mimicking animal proteins will open opportunities to diversify and expand. Taste, texture, and price are still big barriers for many consumers.

Williams says, “Nobody wants a hamburger that maybe costs 20 per cent more but gives you 20 per cent less satisfaction on the eating experience.

“But there is opportunity here when consumers say, stop doing the standalone products. It means there are many other things to do, not just meat or dairy alternatives.”

Gen Z consumers are growing up thinking that plant-based milk is the taste and texture of milk, so they will have different tastes and textures expectations.

She adds that while many look to the stock price performance of some of the bigger players as the barometer for the sector, “nothing drives a trend faster than the government”.

She cited The Netherlands – the second largest food and agricultural exporter in the world after the US – that has a national protein strategy.

“There is a national protein strategy here. They’re describing it as a period of transition from an animal-based protein economy to a plant-based economy. One of the targets is having 20 per cent of all the agricultural land devoted to plant protein. I think it says a lot when you see the research power of this country.”

5. Farming the future

Building on 2022’s top consumer trend being the health of the planet, consumers are increasingly invested in the source of food, tying in with major global concerns of transparency, health, sustainability, and waste.

IMI found public curiosity for innovative technologies such as vertical and regenerative farming is increasing. While these methods can help maximise flavour, nutrition, and yield, they can also win consumer support if they are shown to improve the quality and sustainability of global food production.

Williams says, “Brands need to demonstrate how novel production techniques are benefitting farmers, people, and the planet. Of course, then you have to balance that with the willingness to pay prices because products made with regenerative agriculture are going to cost more. That’s the trade-off.”

IMI’s consumer surveys found 70 per cent of consumers like products that mention the benefits of their sourcing of the farming method. They also relate that to more natural and organic products that are better for the planet and personal health.

6. Quick quality

Another trend building on the last couple of years, quick quality is about consumers still wanting products that are convenient but are also healthy.

Two thirds of those surveyed said they were looking for simple and convenient ways to ensure their daily nutrient intake.

IMI asked consumers what they look for when purchasing a meal kit. Value for money, freshness, and health benefits topped the list, convenience was further down the rankings.

Brands that offer clean ingredients with a great flavour impact, and offer more of a “helping hand”, so consumers participate more in the cooking are well received.

“Twenty-five years ago, Tesco set the world on fire with its chilled ready meal case that was 100 per cent done for you, you just had to heat it and eat it.

“Now, consumers are a bit more willing to participate in the cooking. It is definitely something that represents a great opportunity,” she says.

Consumers are seeking more than convenience alone, but it can enhance a brand’s key values and positioning.

7. Devouring digital

Brands are starting to embrace the full potential of consumer connections by enhancing real life with digital experiences that range from the functional to entertainment.

“You can’t ignore the impact that digital technology and social media have on what’s happening in food.

“Some companies are really following TikTok trends. Digital technologies that are driving changes in personalised nutrition to pure entertainment with novelty flavoured beverages are already here,” Williams says.

She adds there are lots of different ways to leverage this trend but merging food with digital experiences is key to reaching young people.

From those surveyed, the strongest responses to the question “How do you feel about digital food and beverage experiences?” came from consumers aged 18 to 34.

It also allows companies to leverage brand platforms for wider and more meaningful impact, driving curiosity with consumers. It can change the perception of your brand, making it seem younger and more innovative – something a brand can also do by connecting with an issue.

8. Revenge spending

Small pleasures have a heightened effect as luxury spending comes under pressure, providing opportunities to enhance brand perception.

Williams says, “Coming out of Covid, when food was our entertainment, into this period of very high prices and limited budgets, food can be in luxury.

We know consumers are spending more on food and beverage post lockdown, while also trying to save money when buying food and beverage.”

For brands, one way to leverage this is releasing limited edition products. Williams says it doesn’t need a complicated slotting discussion with retailers, it can be done direct to consumer at the point of sale. There has been a 30 per cent average annual growth over the past three years for products with a limited-edition claim.

“It’s about finding those little luxuries that bring you some a bit of pleasure. Again, 60 per cent of consumers that say they are in a worsened financial situation also say that they’re more likely to make a one-time impulse purchase when it’s innovative. And again, we saw with young consumers, Gen Z, and its interest in flavours. It is a big purchase driver.”

9. Unpuzzle health

On pack messaging is a go-to source for consumers keen to know about the health and nutritional value of a product.

For Williams, when asking how you can make it easier for consumers to understand how healthy a product is, “nothing drives a trend faster than the government”, echoing her thoughts in Trend 4.

This trend is about re-establishing trust, providing clear cues, and helping consumers navigate choices. This gives brands the chance to educate and deliver on health messages and product benefits.

IMI found the top responses from consumers on how they determine if a product is healthy were the ingredients list and nutrition label.

“I don’t believe that, but it does tell you what consumers think they should be doing. They will probably look for commentary online from what they consider a trusted source, which right or wrong is reality. Own research and on pack claims are also very important,” Williams says.

She sees a lot more conversation around labelling on products and government regulation, with standardised criteria helping consumers navigate choices.

“I think there’s no turning back. Governments are going to continue to nudge or regulate somehow to try to encourage food companies in the industry to do better. If it works or not will be a highly iterative process and with lots of changes.”

10. Positively imperfect

With the transparency trend growing in recent years, IMI found three in five consumers say their trust in a brand increases when the brand communicates the challenges they are facing on the product.

Openness about the complexities of sustainability is appreciated by consumers who do not expect brands to be 100 per cent perfect.

“This whole idea of being involved in a brand’s journey is important. Consumers say that they feel more involved when the brand is very honest about it,” Williams says.

Irreverent messaging on products can make it more authentic and less corporate when you’re a bit cheeky or maybe very honest on a product.

“It’s very easy for me to sit here in my chair and say, you should do this, but I don’t think it’s a bad idea to figure out how to best communicate that we don’t have to be perfect, and companies also don’t have to be perfect, and in fact you’re just doing the best you can.” 

This article first appeared in the Feb/March 2023 edition of Food & Drink Business magazine.