As food inflation continues to soar, families are taking a more prudent approach with shopping and their dining.
New Zealand Food and Grocery Council chairman Mike Pretty said high prices and inflation at a 32-year high were driving consumers towards back-to-basic home meal preparation.
Shopping growth in basic foods such as frozen vegetables and cooking sauces had increased as shoppers tried to feed the family at a reasonable price, he said.
"Frankly, no matter which metric you look at, consumers are being absolutely hammered.
"Times are tough whether it be from fuel to food and consumers are feeling it very much in the wallet.
"... When we look at just the shared cost of going to the supermarket consumers are seeing CPI rises they have not seen in many a year."
He told 300 delegates at the Red Meat Sector Conference in Christchurch that is seeing the emergence of "right-sizing" or shrink-flation" with brands selling smaller amounts of product for the same or lower prices as before.
The flip side is larger value packs are being offered with extra portions.
UK retailers are responding to a government focus on food prices, Morrisons offering free children meals if an adult buys a meal at their cafes.
More brands are telling the sustainable story — reducing carbon, improving soils, reducing packaging or helping communities — and consumers expect them to take this action.
Silver Fern Farms’ carbon-zero promise was being echoed by Coles in Australia and UK retailers were demanding that suppliers fufil carbon claims, Mr Pretty said.
Mr Pretty said 2D barcodes would help brands back up these claims and provide more information such as where animals were raised.
The grocery industry had been consumed with dealing with Covid-19 issues.
"Globally, supply disruption has had a huge impact upon us all whether you are a small, medium or large company.
"The heart of the matter is the cost of doing business has [increased].
"There’s been strained supply chains and shipping issues, " Mr Pretty said.
He told red meat leaders the rise of e-retail growth was up 52% on pre-pandemic levels and tipped to grow again 38% over the next two years.
Online shoppers are spending about $3500 a year (up from $1000 in 2019) with e-retail about 13% of total sales.
The attraction is not just ease and speed of shopping for more people working at home.
"The increase in use of buy-now and pay-later is responsible for that growth and I think that last trend talks a lot about how hard consumers are finding it.
"One in 10 transactions are buy-now, pay-later and the predictions are it being 17% within a few years."
Brand owners were looking at these trends and considering easy-preparation foods, keyboard-dining and meal portion sizes.
Premium cooking sauces are more popular as house-bound consumers seek exotic tastes they have been unable to get the past two years.
Shoppers looking for wellness are continuing to dine on plant and advanced proteins.
"It’s frankly unsurprisingly that flexitarianism is on the rise.
"Apparently in New Zealand one-third of shoppers are claiming to reduce meat intake and the key motivators are weight loss and cholesterol.
"The lowest factor was environmental so this is all about health and nutrition," Mr Pretty said.
However, the top 10 grocery growth segments contain only two wholefoods with the rest nothing more than "straight-out indulgence".
This showed the difference between what people desired and the practical reality, he said.
The council is working with the Commerce Commission on a mandatory code of conduct in the first step to increase supermarket competition for the two big chains of Woolworths and Foodstuff.
Mr Pretty said the challenge was the lack of competition and new players would be "impactful".
