Let’s face it. Turning the page on a new calendar year doesn’t mean leaving behind all that happened before. Last year found consumers still adjusting to two years of COVID pandemic impacts.

Today’s consumers still balance so many real-life issues and ideals. Most look for overall money-saving value and continue to reduce non-essential spending at restaurants, grocery stores, and on alcohol. And when it comes down to supermarket in-aisle purchase decisions, they’re not only weighing price but also competing interests for a new or novel experience (with unique flavors, ingredients, textures, colors and taste); essential, functional benefits for physical and mental health; and even environmental health for the planet.

Essential

While 85% of consumers say rising inflation has had an impact on the way they shop overall, there are areas in which they are not willing to compromise (NPD America’s Health Pulse: Closing the Gap Between Wants and Needs, 2022). Today’s brands are being pushed to be different, accessible, and to seem premium and/or customized—all while driving cost savings for their own operations.

Consumers are considering price, convenience, functional benefits, experience, and taste when reaching for new products. That has beverage formulators striving for the ultimate “it” factor that makes the product essential. One interesting new example is Hydralyte’s latest collaboration, a ready-to-mix hydration beverage mix developed with actress Shay Mitchell. In another example, Siren Shrub Company LLC, Stevens Point, Wis., created a canned coffee shrub that touts the many benefits of apple cider vinegar.

Among the top 100 most innovative companies are the usual suspects, including PepsiCo, Coca-Cola, Nestlé, and Unilever. What’s interesting too, here, however, is that retailers including Walmart and Target make the list for their latest private label category efforts (BCG Most Innovative Companies Report, 2022). With the expansion of their in-house lines, we’ve seen new products from GoPuff’s Basically and Goodnow brands, Target’s Favorite Day, and Kroger’s Simple Truth.

It’s likely we’ll see these sizable investments prompt an added level of competition as more accessible and affordable options appeal to consumers. Sixty-seven percent of consumers have switched to generic brands to save money at some point in 2022, suggesting that inflation may reduce brand loyalty but won’t reduce interest in trying new products (Morning Consult, 2022). Target’s Casa Cantina line of ready-to-drink cocktails and Aldi’s Pacific Fruit wine-based spritzers are just a few new products playing into consumer demand in the alcohol category—while offering shoppers a more affordable price point.

Plant-based products have become more mainstream but these offerings carry higher overall prices than their animal-based counterparts. In spite of the lack of cost parity, we still expect key types to grow—including oat and almond milks. Oat milk dollar sales were up 41.6% during a 52-week period ending November 2022, according to data from IRI. Separately, Food Manufacturing reports that the almond milk market is expected to grow at a CAGR of 15.2% from 2022 to 2023.

Environmental

Younger generations are defining trends driven by what they value most and they support brands and products that resonate with them. #EcoTok has been a key indicator of the proliferation of environmentally-friendly alternatives to everyday items and from July 2022 through November 2022, the number of videos using this hashtag grew by approximately 42% on TikTok. End of Part 1