Rising costs and selective shoppers, make value and innovation vital
Food and beverage retailers are facing challenging conditions. Just as costs are climbing across the supply chain, consumers are becoming increasingly resistant to paying more.
In other words, business owners are being squeezed from both directions. It’s a situation that Colm Maguire, chief executive of the Australian Food and Grocery Council, says is likely to persist. “What we are seeing now is not a short-term disruption, but a structural shift in the cost of doing business driven by global instability, including the Middle East conflict.”
To combat this, he recommends more disciplined planning, better use of data and a clear focus on operational performance across the supply chain.
When it comes to food and beverage product creation, Michelle Teodoro of Mintel observes that consumers are becoming more intentional. Many are selecting products that work hard, like protein-enriched food or electrolyte-laden drinks. “People are increasingly looking for products that do more than one thing.” Others are seeking out small indulgences or treats to balance out the belt-tightening that has come with cost-of-living pressures. “I don’t see that changing.”
“What we are seeing now is not a short-term disruption, but a structural shift .”
Colm Maguire, chief executive of the Australian Food and Grocery Council
Numbers to know
750k
The number of posts featuring ube on Instagram
Forget matcha. Ube, the bright purple yam, is the latest, hottest ingredient on social media. Starbucks rolled out an iced ube coconut macchiato; Trader Joe’s launched an ube mochi pancake mix; and The UK’s Costa Coffee chain just released a ‘sweet ube’ range.
$5.66 billion
The projected size of Australia's quick commerce market by 2034
On-demand grocery delivery is set to grow nearly five-fold over the next decade from $1.16 billion1 today. Coles is now on Uber Eats with up to 17,000 products available, while Woolworths has expanded across MILKRUN and DoorDash.
1300%
The surge in Google searches for creatine gummies
Move over protein. Creatine has long been sold as a powder at gyms and supplement stores, but lately it’s hit the mainstream thanks to a new iteration of creatine gummies. The global creatine supplements market is projected to leap from US$1.37 billion in 2025 to US$8.68 billion by 20332.
52%
The share of Gen Z consumers who buy themselves a small treat once a week
As economic pressures continue, many younger consumers are embracing "little treat culture", and spending on affordable luxuries such as specialty drinks, premium snacks and limited-edition products. According to one US survey3, 52 per cent of Gen Z buy themselves a small treat at least weekly.
TRENDS
Private label gets a Gen Z glow-up
Gen Z are driving the popularity of home brands - spending 18.4 per cent4 of their grocery budget on average on private-label products. By mid-2027, under-30s are set to be the biggest consumers of home brand products. Research shows that Gen Z consumers are discovering premium home brand products on TikTok, and view them as trendy and innovative.
Feeling “swangy”
First came “swicy”, the sweet-meets-spicy mash-up that landed hot honey on every menu. Now flavour forecasters have a new portmanteau: “swangy” - sweet, spicy and tangy - and its cousin “swavory” - spicy, sweet and savoury. Think vinegar-forward flavours like miso caramel and chilli plum. Taste and nutrition consultancy Kerry has branded it "Maximalist Flavour": consumers leaning into bold, layered, multisensory experiences5.
Waste not, want not
The global upcycled food market is projected to almost double in size to US$68.56 billion by 20326 as brands take innovative approaches to upcycling leftovers from food manufacturing. Take Brisbane startup I Am Grounded, which turns coffee fruit into a snack bar stocked nationally at Woolworths and Harris Farm. Or Melbourne brand Nutri V, which transforms imperfect broccoli, cauliflower and pumpkin into vegetable powders and kids' puffed snacks.
Sources
1 IMARC Group,2 Nutrition Integrated, 3 Bank Of America, 4 Retail World, 5 Kerry Insights, 6 Fortune Business
All references to any registered trademarks are the property of their respective owners. Afterpay does not endorse or recommend any one particular supplier and the information provided is for educational purposes only.
Categories