This week from the Food Institute, in the fourth quarter of 2010, expenditures for food and beverages purchased for consumption at home rose 1.6% over the prior quarter, marking the largest such increase since the second quarter of 2008 according to Food Institute analysis of data from the Bureau of Economic Analysis.
In the fourth quarter of 2010, expenditures for food and beverages purchased for consumption at home rose 1.6% over the prior quarter, marking the largest such increase since the second quarter of 2008 according to Food Institute analysis of data from the Bureau of Economic Analysis. Compared to a year earlier, expenditures for food and beverages rose a strong 3.5% -- the largest such gain since the third quarter of 2008. This is a marked improvement over the second and third quarter of 2009 when these expenditures actually fell below year earlier levels, something that prior to those quarters had not happened since 1992. Overall, expenditures for food and beverages totaled $638 billion on an annualized basis in the fourth quarter, which is how the government reports this data. It should be noted that these number are adjusted for inflation.
While these numbers will be revised later this year, it appears that consumers are starting to open their wallets a bit more for food they consume at home. That’s good news for retailers and food manufacturers, several of whom are looking to lift prices after two years of almost no inflation in food prices.
But what were customers buying? Not surprisingly, center of the plate meat and poultry items accounted for the largest portion of expenditures – 20% or about $138 billion annually. Beverages such asfrom water to soft drinks and coffee, but excluding alcoholic ones, made up another 12% or $83.7 billion – of which about $73 billion was soft drinks. Accounting for 13% were bakery items for which consumers spent some $87 billion.
The produce aisle was a popular spot as well accounting for about $82 billion in expenditures or 11% of the total.
It should be noted that overall consumer expenditures of $10.5 trillion in 2010, food for consumption at home accounted for only 7.7% of that amount. That’s a bit less than the 7.9% share recorded a decade ago, but considerably less than the 10% share these foods made up 20 years ago and the 13% recorded back in 1980. That means that food at home purchases continue to decline even in a poor economy and now account for less than eight cents of every dollar consumers spend in the U.S.
For more on the current state of the Food Institute, turn to The Food Industry Review from the Food Institute, atwww.foodinstitute.com/foodindustryreview.cfm.