2023 will be a difficult year for food retail and consumer packaged goods. Food inflation (CPI) is above 10%, the highest level in decades. The Federal Reserve hiked interest rates seven times in 2022 and has predicted further increases in 2023. To make it to 2023, companies must prioritise cash flow and prevent the haemorrhage. Retail sales dollar growth is outpacing unit growth, which has become negative in many businesses. Customers are buying less after 18 months of price rises and stimulus spending.
Related post: Private label gain traction as consumers turn to them amidst rising inflation
To increase money from suppliers, retailers are asking for more private label and higher slotting fees. Pay-to-play is always advantageous in terms of economies of scale. Despite over 80,000 job vacancies in the food business, recent layoffs at Walmart, Pepsico, Misfits/Imperfect Foods, Motif Foodworks, Go Puff, DoorDash, General Mills, Coca-Cola, Beyond Meat, and Impossible Foods indicate that a “growth recession” has already reached the food industry. However, Once Upon A Farm CEO John Foraker is hopeful about the future.
