Multivac UK Packaging & Processing Forum: shifting consumer behaviours – an insight

The UK food industry is navigating a landscape marked by economic strain, evolving consumer expectations, and a fierce battle for shopper loyalty. As inflation bites and confidence wanes, food manufacturers are being forced to rethink everything — from product tiers to innovation pipelines — to stay relevant in a market where value is no longer just about price.

Confidence crisis meets consumption shift
Consumer confidence has remained stubbornly low since 2016, with just over one in five households reporting difficulty making ends meet. While inflation has eased from its 2022 peak, the cost of everyday staples remains more than 25% higher than five years ago.

“We’re seeing massive changes,” said Nathan Ward, business unit director at Worldpanel by Numerator, addressing an audience at the Multivac UK Packaging & Processing Forum 2025 on 2 October. “Real wage growth has only been a few per cent, so we’re not seeing people have more money — we’re seeing less.”

This squeeze is reshaping how consumers shop and eat. Grocery volumes are flat or declining, masked only by rising value figures driven by price inflation. Out-of-home dining is down, and shoppers are pulling levers to save: buying on promotion, trading down, and switching retailers.

Loyalty: the new battleground
Retailers are doubling down on loyalty schemes to capture a greater share of the consumer’s repertoire. With the average household shopping at 4.6 stores every four weeks, winning more trips is key.

“I would feel robbed if I shopped in the store and didn’t have my loyalty card,” Ward quipped, highlighting how price differentials are driving card adoption.

For manufacturers, this means more data-driven personalisation, tighter alignment with retailer strategies, and a need to innovate within promotional frameworks. Premium private label is surging, growing at double-digit rates, as retailers seek to trade shoppers up once they’re in-store.

Trading down, trading differently
The traditional notion of “trading down” is evolving. Consumers aren’t just buying cheaper — they’re reframing occasions.

“We’re seeing a trade down from out-of-home to in-home,” Ward explained. “Instead of a £16 burger, it’s a four-pack for £5. Instead of a £5 coffee, it’s Nescafé’s iced concentrate at 40p a serve.”

This shift is driving growth in categories that replicate restaurant experiences at home — fresh pasta with sauce, premium ready meals, and world cuisine staples like Korean and Mexican. Brands like Jason’s Sourdough and Mollica Crostica are thriving by offering authenticity, health cues, and elevated taste.

Innovation with purpose
Manufacturers are no longer flooding shelves with speculative launches. Instead, they’re investing in targeted innovation that meets specific consumer needs — treating, health, and convenience.

“We’re not launching more and more toss-of-a-coin products,” Ward noted of the retailers’ approaches. “We’re trying to do big-hitting, big wins.”

Treat occasions are at a five-year high, especially in breakfast and evening meals. Croissants, continental bakery, and premium snacks are replacing traditional staples like toast and desserts. Consumers are willing to spend 20–40% more on these elevated moments, making them ripe for innovation.

Health: a value proposition under pressure
Health remains a priority — but not the top one. It’s often third or fourth behind taste and ease. And it costs more: healthy meals average 50p more than standard ones. “People start to make that judgment call,” Ward said. “If it doesn’t taste good, am I going to spend 50p more? Probably not.”

Still, demand for added benefits like fibre, protein, and gut health is rising. The challenge for manufacturers is to make health feel like value — not sacrifice. With GLP-1 drugs entering the conversation, the definition of “healthy” is shifting fast.

Implications for food manufacturers
Manufacturers must now operate in a bifurcated market: one segment trading down and stretching budgets, another trading differently and seeking elevated experiences. Success lies in:

• Tiered innovation: offering value, mainstream, and premium options that reflect occasion-based needs.
• Retailer alignment: designing products that fit loyalty schemes and promotional strategies.
• Functional storytelling: communicating benefits beyond price — taste, health, ease, and experience.
• Agile formats: from frozen to fresh, from scratch kits to ready meals, format flexibility is key.

As Ward summed up: “Value isn’t just about cost. It’s about what the product does for me. We don’t buy anything just because it’s something — we buy it for an end need.”

Targeted response
In a market where consumers are both cautious and creative, food manufacturers must respond with precision, empathy, and boldness. The winners will be those who understand not just what consumers are buying — but why, when, and how they’re reframing the value of food.