Food: Campbell’s says cash-strapped consumers pushing at-home cooking to highest levels since early 2020

Why it is the topic trending: Why At-Home Cooking is Back on the Menu

• Inflation is causing shoppers to be more selective with their spending and stretch their food budgets.

• This economic pressure is leading consumers to favor cooking at home as a more cost-effective alternative to eating out.

• The shift towards at-home cooking is pushing meal preparation to its highest levels since the early days of the COVID-19 pandemic in 2020, when restaurant dining was significantly restricted.

• Campbell's, a major food manufacturer, is directly benefiting from this trend as consumers stock up on their soups, sauces, and broths for home-cooked meals.

Overview: As inflation continues to impact consumer spending, there's a significant resurgence in cooking meals at home. This trend is largely driven by consumers seeking to maximize their food budgets by using affordable ingredients for home-prepared meals. Campbell's has seen a notable increase in demand for their core products like condensed cooking soups, broths, and Italian sauces. While their meals and beverages division is performing well, the company is facing challenges in its snacks segment, where inflationary pressures have led to a decline in consumption. Overall, the current economic climate is presenting a dual scenario for food companies, boosting sales in at-home cooking staples while negatively affecting discretionary snack purchases.

Detailed findings: Key Insights from Campbell's Report

• Surge in At-Home Cooking: Consumers are cooking at home at the highest rate since early 2020.

• Budget-Friendly Ingredients Favored: Shoppers are opting for ingredients that help them stretch their food budgets further.

• Boost for Core Campbell's Products: This shift is creating a positive trend for Campbell's condensed cooking soups, broths, and Italian sauces.

• Strong Performance in Meals and Beverages: Campbell's meals and beverages segment experienced a 15% surge in sales during the third quarter, reaching $1.5 billion. This growth was partly fueled by the acquisition of Rao’s owner Sovos Brands.

• Continued Strength in Soup Business: Campbell’s soup business maintains strong performance, with wet soup offerings appealing to younger individuals who are increasingly cooking at home.

• Market Share Growth for Several Brands: Six of Campbell’s top eight meals and beverages brands, including Pace, Pacific, and Swanson, either grew or maintained their market share in the third quarter, with overall consumption increasing by 2%.

• Broad Consumer Income Group Adoption: Improved consumption of meals and beverages is observed across all consumer income groups. Consumers are seeking value, quality, and convenience from these brands.

• Decline in Snacking Consumption: Despite the boom in home cooking, inflationary pressures have led to a decrease in the consumption of snacks.

• Snack Sales Dip: Campbell’s snack sales decreased by 8% to $1 billion in the third quarter.

• Challenges with Goldfish Brand: The company specifically noted that more effort is needed to revitalize the Goldfish cracker brand and restore its historical growth.

• Monitoring Tariff Impact: Campbell’s is closely monitoring the potential impact of tariffs on its business, as it imports tinplate steel and canola oil. These trade headwinds could reduce fiscal-year earnings by 3 to 5 cents per share.

• Mitigation Strategies for Tariffs: Campbell’s is actively working on strategies to minimize the direct impact of tariffs, including inventory management, exploring alternative sourcing, and considering targeted pricing adjustments when necessary.

Key success factors of product (trend): Meeting the Needs of Frugal Home Cooks

• Affordability: Products that allow consumers to prepare meals cost-effectively are highly successful. Campbell's soups, broths, and sauces are generally affordable staples.

• Versatility: Ingredients that can be used in a variety of dishes, stretching their utility and reducing waste, are favored. Campbell's products are often used as bases for numerous recipes.

• Convenience: While the trend is home cooking, products that simplify the cooking process and reduce preparation time are still valuable. Campbell's canned goods offer a level of convenience.

• Familiarity and Trust: Established brands like Campbell's benefit from consumer trust and familiarity, especially during times of uncertainty when shoppers may revert to reliable choices.

• Long Shelf Life: Products with a long shelf life are practical for consumers looking to stock up on affordable staples and reduce shopping frequency.

Key Takeaway: The surge in at-home cooking, driven by inflation and consumers' need to stretch their budgets, is significantly benefiting companies like Campbell's, particularly their lines of soups, sauces, and broths. This trend highlights the resilience of affordable, versatile food staples during economic hardship. However, it also presents challenges for snack brands as consumers become more selective with discretionary spending. Food companies must navigate this dual impact by capitalizing on the demand for home cooking solutions while addressing the slowdown in snack consumption.

Main trend: The main trend is a significant increase in at-home cooking driven by inflation and consumers' efforts to save money on food.

Description of the trend (please name it): The Inflation-Driven Home Cooking Revival: This trend describes the resurgence of meal preparation at home as consumers actively seek more affordable alternatives to eating out amidst rising food prices and economic uncertainty.

What is consumer motivation: Economic Savings and Budget Stretching

• Reducing Food Costs: The primary motivation is to lower overall food expenses by preparing meals at home rather than spending more on restaurant food or takeout.

• Maximizing Food Budget: Consumers aim to make their existing food budget go further by using affordable ingredients for home-cooked meals.

• Controlling Ingredients and Portions: Cooking at home allows consumers to have more control over the ingredients used and the portion sizes, which can contribute to healthier eating and cost management.

• Avoiding Restaurant Markups: By cooking at home, consumers can avoid the markups associated with restaurant meals, saving a significant amount of money.

What is driving trend: Inflation and Economic Uncertainty**

• High Food Inflation: The rising prices of groceries and dining out are making at-home cooking a more financially attractive option.

• Economic Uncertainty: Concerns about the overall economy and future financial stability are prompting consumers to cut back on non-essential spending and seek cost-saving measures in everyday life.

• Comparisons to Pandemic Behavior: The article draws a parallel to the early days of the COVID-19 pandemic, suggesting that in times of restricted or expensive external options, consumers naturally gravitate towards home-based solutions.

What is motivation beyond the trend: Value, Quality, and Convenience**

• Seeking Value for Money: Consumers are looking for food options that provide good value in terms of cost and quality, and home cooking allows for this balance.

• Desire for Quality Meals: Cooking at home enables consumers to use fresh ingredients and prepare meals to their own quality standards.

• Convenience of Familiar Routines: For some, cooking at home is a familiar and convenient routine, especially when dining out becomes less frequent due to cost.

Description of consumers article is referring to: The article refers to a broad range of consumers across different income levels in the United States who are feeling the impact of inflation on their food budgets.

• Who are the consumers article refers to: American shoppers who purchase food for consumption, including those who previously dined out more frequently.

• Who are them: They are individuals and households adjusting their eating habits in response to rising prices. This includes younger individuals who are increasingly cooking at home, as specifically mentioned by Campbell's CEO.

• What kind of products they like: They prefer affordable ingredients that can be used to prepare a variety of meals at home. This includes staple items like soups, sauces, broths, and basic cooking ingredients.

• What is their age?: The article mentions younger individuals are increasingly cooking at home, suggesting this demographic is significantly contributing to the trend. However, the overall trend of seeking value is likely prevalent across various age groups.

• What is their gender?: The article does not specify gender. Cooking at home is a common activity across genders.

• What is their income?: While the trend is driven by economic pressures affecting a wide range of consumers, Campbell's CEO noted "improved consumption across all consumer income groups" for meals and beverages, indicating that even those with higher incomes are seeking value. However, the impetus is likely stronger for those with tighter budgets.

• What is their lifestyle: Their lifestyle is currently adapting to include more time spent preparing meals at home, potentially reducing time spent dining out or ordering takeout.

• What are their category article is referring shopping preferences: They are more likely to prioritize price and value when shopping for food. They may be less inclined to purchase non-essential or premium food items and snacks.

• Are they low, occasional or frequent category shoppers: They are frequent shoppers for grocery items as they are preparing more meals at home.

• What are their general shopping preferences-how they shop products, shopping motivations: They are likely to be more focused on finding cost-effective options, potentially comparing prices and looking for deals on staple ingredients. Their primary motivation is to feed themselves and their families affordably without sacrificing too much on quality or convenience.

Conclusions: High inflation rates are driving a significant shift in consumer behavior towards cooking more meals at home. This trend is benefiting companies like Campbell's, which offer affordable and versatile cooking staples. However, it also presents challenges for the snacks industry, as consumers become more selective with their discretionary spending. Food companies need to acknowledge this dual reality and adapt their strategies to capitalize on the resurgence of home cooking while also addressing the changing dynamics in the snacking market. The impact of potential tariffs adds another layer of complexity for manufacturers to navigate.

Implications for brands: Capitalizing on the Home Cooking Trend

• Highlight Affordability and Value: Emphasize the cost-effectiveness of products and how they can help consumers stretch their food budgets.

• Promote Versatility and Recipe Ideas: Provide consumers with recipe suggestions and demonstrate how their products can be used in a variety of home-cooked meals.

• Focus on Core Cooking Staples: Ensure a strong supply and effective marketing of essential ingredients like soups, sauces, and broths.

• Consider Bundling and Value Packs: Offer bundled products or larger, value-sized options that appeal to budget-conscious consumers.

• Explore Partnerships: Collaborate with recipe developers or influencers to showcase affordable and appealing home-cooked meal ideas using their products.

Implication for society: Potential Shifts in Food Culture and Habits

• Increased Cooking Skills: A greater emphasis on home cooking might lead to an improvement in cooking skills and a renewed appreciation for preparing meals from scratch.

• Family Meal Revival: More frequent family meals prepared and eaten at home could strengthen family bonds.

• Potential for Healthier Eating: With more control over ingredients, consumers might opt for healthier meal options when cooking at home.

• Reduced Food Waste: Planning and cooking meals at home can potentially lead to less food waste compared to dining out or ordering takeout.

Implications for consumers: Adapting to a More Cost-Conscious Approach to Food

• More Time Spent Cooking: Consumers will likely need to dedicate more time to meal planning and preparation.

• Increased Meal Planning and Budgeting: Careful planning of meals and adherence to a food budget will become more important.

• Greater Reliance on Basic Ingredients: Consumers may rely more on fundamental cooking ingredients rather than pre-prepared or convenience foods (excluding staples like canned soups).

• Potential for More Economical and Healthier Diets: By cooking at home, consumers have the opportunity to create more affordable and potentially healthier meals.

Implication for Future: A Potential Long-Term Shift in Eating Habits

• Sustained Higher Levels of Home Cooking: Even if inflation moderates, some consumers may continue to cook at home more frequently due to the cost savings and other benefits.

• Innovation in Affordable Meal Solutions: The food industry may see more innovation in products and services that support affordable and convenient home cooking.

• Reshaping of the Restaurant Industry: Restaurants may need to adapt their pricing and offerings to remain competitive with the cost-effectiveness of home-cooked meals.

• Continued Scrutiny of Food Costs: Consumers are likely to remain more aware and sensitive to food prices in the long term.

Consumer Trend (name, detailed description): The Budget-Driven Kitchen: Consumers are increasingly motivated by budgetary constraints to cook more meals at home, prioritizing affordable ingredients and value for money in their food purchases.

Consumer Sub Trend (name, detailed description): Pantry Stocking for Savings: Consumers are likely to stock up on non-perishable cooking staples when they are on sale to maximize savings and have ingredients readily available for home-cooked meals.

Big Social Trend (name, detailed description): The Resilience of Home and Domesticity: In times of economic stress, there's often a return to more home-centered activities, with cooking being a fundamental aspect of managing household expenses and ensuring well-being.

Worldwide Social Trend (name, detailed description): Global Concern over Cost of Living: Rising inflation and the increasing cost of living are global issues, and the shift towards more economical food practices, such as home cooking, is likely occurring in various parts of the world.

Social Drive (name, detailed description): Security and Financial Stability: The core social drive of ensuring financial security and stability for oneself and one's family is a primary motivator behind consumers' increased focus on cost-effective food options like cooking at home.

Learnings for brands to use in 2025:

• Acknowledge Consumer Financial Pressures: Recognize and understand the economic challenges faced by consumers when developing marketing and product strategies.

• Emphasize Value and Practicality: Highlight how products can help consumers save money and prepare easy, practical meals at home.

• Provide Recipe Inspiration for Budget Meals: Offer consumers ideas and resources for creating affordable and delicious meals using their products.

• Maintain Competitive Pricing on Core Staples: Ensure that essential cooking ingredients remain accessible and competitively priced.

Strategy Recommendations for brands to follow in 2025:

• Develop Budget-Oriented Marketing Campaigns: Create campaigns that specifically target cost-conscious consumers, emphasizing savings and value.

• Offer Multi-Serve and Family-Sized Options: Provide larger product sizes at a better per-unit price to appeal to families cooking at home.

• Partner with Retailers on Promotions and Discounts: Collaborate to offer attractive deals and promotions on key cooking staples.

• Invest in Product Innovation for Affordable Meals: Explore opportunities to develop new products or reformulate existing ones to offer more budget-friendly options without sacrificing quality.

Final sentence (key concept) describing main trend from article (which is a summary of all trends specified), and what brands & companies should do in 2025 to benefit from trend and how to do it: The primary trend of inflation driving a surge in at-home cooking in 2025 necessitates that brands like Campbell's continue to emphasize the affordability and versatility of their core products while also acknowledging challenges in discretionary spending areas like snacks, prompting them to strategically focus on value and potentially innovate within their snack portfolio to regain consumer momentum.

Final Note:

• Core Trend: Inflation-Driven Home Cooking Revival: Economic pressures are pushing consumers back into their kitchens to save on food costs.

• Core Strategy: Value-Centric Product and Marketing: Brands need to focus on offering affordable, versatile products and communicating their value effectively to consumers.

• Core Industry Trend: Increased Demand for Cooking Staples: The demand for basic cooking ingredients like soups, sauces, and broths is on the rise.

• Core Consumer Motivation: Economic Savings and Budget Management: Consumers are primarily motivated by the need to reduce food expenses and manage their budgets effectively.

Final Conclusion: In 2025, the resurgence of home cooking, fueled by widespread inflation, presents both opportunities and challenges for food manufacturers. While companies offering affordable cooking staples are experiencing a boom, those in discretionary categories like snacks face headwinds. The key to navigating this environment lies in understanding and responding to the core consumer motivation: the need to manage household budgets by providing value-driven food solutions for at-home meal preparation.

Core Trend Detailed: The Inflation-Driven Home Cooking Revival is a significant behavioral shift where consumers, facing higher food prices due to inflation, are increasingly opting to prepare meals at home. This trend is not just about saving money; it also reflects a return to more traditional food habits in response to economic pressures. Consumers are making a conscious effort to control their food expenses by purchasing ingredients and cooking from scratch or using affordable meal starters. This trend extends beyond just financial considerations, potentially encompassing a desire for healthier eating, greater control over ingredients, and the satisfaction of preparing meals for oneself and their families. The resurgence is notable as it reaches levels not seen since the early stages of the COVID-19 pandemic, indicating a significant impact of current economic conditions on consumer food habits.

Key Characteristics of the Core trend:

• Increased Frequency of Home-Cooked Meals: Consumers are preparing and eating more meals at home on a regular basis.

• Greater Reliance on Staple Ingredients: Affordable and versatile ingredients that can form the basis of multiple meals are favored.

• Reduced Spending on Dining Out and Takeout: Consumers are cutting back on eating at restaurants and ordering prepared food to save money.

• Heightened Awareness of Food Prices: Shoppers are more attentive to the cost of groceries and actively seeking deals and discounts.

• Potential for Increased Scratch Cooking: While convenience remains important, there might be a rise in consumers preparing meals from basic ingredients to maximize cost savings.

Market and Cultural Signals Supporting the Trend:

• Campbell's Sales Data: The company's reported increase in sales for soups, sauces, and broths directly indicates a rise in demand for home cooking staples.

• Consumer Surveys and Economic Reports: General economic data and consumer surveys likely reflect concerns about inflation and rising food costs, supporting the observed behavioral shift.

• Media Coverage: News articles and reports focusing on inflation and its impact on consumer spending patterns further highlight this trend.

• Social Media Activity: Online discussions and content related to budget-friendly recipes and meal planning are likely increasing.

• Grocery Store Sales Trends: Sales data from grocery stores might show an increase in the purchase of basic cooking ingredients and a potential dip in sales of prepared or convenience foods (excluding affordable staples).

How the Trend Is Changing Consumer Behavior:

• More Time Spent in Grocery Stores: Consumers might spend more time in grocery stores comparing prices and looking for the best deals.

• Increased Interest in Cooking Resources: There could be a greater demand for cookbooks, online recipes, and cooking tutorials focused on budget-friendly meals.

• Shift in Food Shopping Lists: Shopping lists may include more staple ingredients and fewer pre-packaged or ready-to-eat items.

• Re-evaluation of Food Spending Habits: Consumers are likely reviewing their overall food spending and identifying areas where they can cut back.

• Potentially More Batch Cooking and Meal Prepping: To save time and money, consumers might engage in batch cooking and meal prepping for the week.

Implications Across the Ecosystem:

• For Brands and CPGs: Opportunity to market the affordability and versatility of core cooking ingredients. Challenge to maintain sales in discretionary snack categories.

• For Retailers: Need to ensure a good supply of affordable staples and potentially offer more promotions and discounts on these items.

• For Consumers: Requires adjusting eating habits to include more home cooking, which might necessitate more time and effort but can lead to cost savings.

Strategic Forecast:

• The trend of increased at-home cooking is likely to persist in the near to medium term as long as inflation remains high and economic uncertainty continues.

• Food brands that can effectively cater to the needs of budget-conscious home cooks will thrive.

• The snacking industry may need to adapt by offering more value-oriented options or focusing on categories less susceptible to economic downturns.

• There might be a long-term shift in some consumers' eating habits, with a sustained increase in home cooking even after the immediate economic pressures subside.

Potential areas for innovation in the food industry:

• Affordable and Versatile Meal Kits: Innovating on meal kits that are significantly more budget-friendly than current options. This could involve using more basic ingredients, offering larger family-sized portions at a lower cost per serving, or focusing on recipes that utilize common pantry staples.

• Ingredient-Focused Products with Recipe Guidance: Developing products centered around a core, affordable ingredient (like beans, lentils, rice) that come with multiple easy and budget-friendly recipe suggestions to maximize their use.

• Enhanced Shelf-Stable and Frozen Meal Solutions: Innovating on shelf-stable and frozen meal options that offer both affordability and improved quality and taste, making them more appealing as regular meal choices rather than just convenient back-ups. This could include single-serve or family-size options.

• Technology-Driven Meal Planning and Budgeting Tools: Creating apps or online platforms that help consumers plan their meals for the week based on their budget, suggest affordable recipes using ingredients already in their pantry or on sale, and even integrate with grocery delivery services to facilitate cost-effective shopping.

• Sustainable and Cost-Effective Protein Alternatives: Innovating on affordable and palatable plant-based protein sources or other alternative proteins that can serve as budget-friendly substitutes for traditional meat options in home-cooked meals.

• Subscription Services for Budget Staples: Developing subscription services that deliver essential cooking staples (like rice, pasta, flour, canned goods) at discounted prices on a regular basis.

• Interactive Cooking Education Focused on Budgeting: Creating online courses, workshops, or social media content that teaches consumers how to cook delicious and nutritious meals on a tight budget, focusing on skills like using leftovers, minimizing food waste, and utilizing affordable ingredients effectively.

• Smart Packaging for Portion Control and Reduced Waste: Innovating on packaging solutions that help consumers measure appropriate portion sizes, reseal easily to extend the life of ingredients, and provide clear guidance on storage to minimize food waste, ultimately saving money.

• Community-Based Food Sharing Initiatives: Exploring platforms or local initiatives that facilitate the safe sharing of excess ingredients or home-cooked meals within communities to reduce food waste and help those struggling with food costs.

Final Thought: The silver lining of economic hardship for companies like Campbell's is the clear message to the broader food industry: in times of financial strain, consumers will prioritize value and return to fundamental practices like cooking at home, creating an opportunity for brands that can meet this essential need affordably and conveniently.

Source: https://www.fooddive.com/news/campbells-says-consumers-cooking-at-home-highest-since-covid-19/749571/