Consumer confidence is on the decline. The University of Michigan’s Consumer Confidence Index recently showed a 14% decline in short-term economic expectations, reflecting persistent pressure from elevated food prices and a fragile global economy. For food marketers, that volatility is translating into harder budget decisions and increased scrutiny on performance.
Early signals suggest a shift in strategy is already underway. In a recent study of senior advertising and marketing leaders, 26.4% said they are reallocating spend toward lower-cost, higher-efficiency channels, while 22.4% are reducing their media frequency to maintain flat budgets.
To navigate ongoing uncertainty, brands must strike a careful balance between protecting near-term performance and maintaining long-term growth. That requires discipline, flexibility and a willingness to rethink traditional budget allocation. Consider this your toolbox for building a more resilient ad strategy in an unpredictable year.
Keep the lights on
Rising costs for fuel and ingredients are forcing food companies to make difficult trade-offs. Some brands are absorbing higher costs, while others are adjusting packaging, reformulating products or optimizing supply chains.
One investment that should remain is marketing. Historically, brands that pull back too aggressively on advertising during downturns risk long-term damage, including erosion of brand equity, reduced customer loyalty and slower revenue recovery. Cutting visibility may offer short-term relief, but leads to long-term decay.
Instead of going dark, food marketers should focus on efficiency. That means prioritizing higher performing channels, like social media, print or audio and allocating dollars toward what is working now. For instance, audio delivered an ROI of about $2.50 while print delivered an ROI of over $4.
Maintaining a consistent presence, even at lower overall spend levels, helps brands stay relevant with consumers and better positions them to scale quickly when conditions improve.
Have a plan in place
With much of the food industry still weighing the long-term impact of changing consumer sentiment and the economy, brands must prepare themselves for whatever is on the horizon.
When so much is up in the air, scenario planning is vital for riding out the storm. Scenario planning combines historical performance data with current market conditions, providing marketers with multiple budget scenarios to understand how different allocation strategies impact outcomes like incremental revenue, reach or return on ad spend (ROAS). For example, scenario planning can help a food brand determine where to shift investments or what level of spend maintains a baseline level of performance.
When paired with marketing mix modeling, these scenarios become even more actionable, allowing teams to simulate outcomes before making real-world budget shifts. This helps them adjust quickly to changing market conditions, like supply chain disruptions or sudden shifts in consumer spend, in a matter of minutes instead of reacting weeks later. This also positions them to get ahead of competitors who might not be as nimble.
The food industry is no stranger to disruption. From pandemic-era demand swings to ongoing inflation, CPG brands have spent years adapting under pressure. This time is no different. For marketers, that means maintaining a baseline level of brand investment, utilizing scenario planning in their budget decisions and staying ready to pivot as conditions evolve. Smart brands that adopt this approach will not only win the current term but come out stronger in the long run.
