USDA: Half of consumers' food budgets spent on convenience

Dive Brief:

  • Consumption of convenience foods has increased among Americans for several reasons, according to a new report released by the U.S. Department of Agriculture last week.
  • On the consumer side, Americans are more time-constrained and often have less time to prepare food at home. Changes in income have also impacted household demand for convenience.
  • As for the industry, prices for many convenience foods have dipped in comparison to their less convenient competitors. Also, advertising for convenience foods, particularly fast food and snacks, is often more visible than other less convenient products.

Dive Insight:

Determining the best ways to improve convenience will be key to snagging a larger share of the average household food budget. Consumers dedicated about half of their household food budget to the most convenient foods purchased from fast-food and sit-down restaurants during the study's time frame.

Ready-to-cook and ready-to-eat meals and snacks comprised more than one-quarter (26%) of the average household food budget between 1999 and 2010, according to the report. And with the continued growth of snacking and demand for convenience since then, it's likely that percentage is even higher today.

RTE meals and snacks saw their portion of the average household food budget begin to increase across all geographic regions in 2007. RTC products' share of that budget remained fairly constant, USDA reported.

This shows how far manufacturers need to consider going to incorporate convenience into product formulations, packaging and marketing messages. RTC products are still desirable to consumers, but RTE products are where more growth opportunities lie. This includes segments like RTE snacks and liquid meal replacements, the latter of which are becoming increasingly preferred for morning meals when consumers are often on the go.

In terms of grocery store items, the convenience of the product and packaging itself seems to be more important than its advertising. USDA found that advertising investments significantly impacted fast food demand, but had little effect on RTE meals and snacks and other convenient foods.

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Filed Under: Manufacturing Packaging / Labeling