summary

As we kick off 2025, pepviz^TM is excited to explore several food & beverage category dynamics shaping shopper perceptions and behaviors this year. We’ll analyze shopper trends and choice drivers in the context of an evolving retail landscape, in-store and online. Then we’ll propose three main “keys” for driving growth informed by the latest data & insights, all with an eye to accelerating growth in partnership with PepsiCo in 2025 and beyond.

introduction

Happy New Year! And welcome to 2025, retailers, marketers, merchants, data scientists and all of our other PepsiCo food & beverage partners. Today, we kick off the new year by looking at three proven ways to drive growth in food & beverage - attracting new shoppers, creating experiences online and off that will have them coming back for more, and ensuring the right assortment to drive conversion.

While these “three keys” are time tested ways to grow, we hope to offer new perspectives on each, reframing them in light of timely trends and insights into how shopping and shoppers are evolving today. Because, while we don’t have a crystal ball on the future, we do have have powerful data & insights to share into what today’s shoppers want. By regrounding in the fundamentals of their needs and preferences, we can evolve with them to drive growth in 2025 and beyond.

So let’s get back to the basics, like never before!

2025 marketplace insights

It all starts with understanding shopper sentiment and choice drivers. Despite a rebound in consumer sentiment during the first quarter of 2024, as of the end of last year consumer sentiment had yet to fully recover to pre-pandemic levels.¹

And that means shoppers continue to make tradeoffs, with dining out and entertainment being the categories shoppers are the most likely to reduce spending in. The good news is that shoppers are far less likely to reduce spending on groceries.²

So which categories are expected to grow? Are there any household dynamics to be aware of heading into this new year? And what does the landscape look like in terms of shopper

A. Core food & beverage categories are projected to grow in 2025

Despite headwinds, shoppers remain less likely to make tradeoffs on food & beverage items. In fact, key categories are expected to grow. About half of Americans snack 3+ times a day³ and salty snacks are expected to grow at a 5-year CAGR of 4.0%.⁴ Similarly, beverage consumption is up 5% vs. pre-COVID.⁵ It too is expected to grow 3.8% over the next five years.⁶ Finally, breakfast is hot, with 33% of all edible trips expected to include a breakfast food item.⁷

B. Households without kids are an often-overlooked growth opportunity

Another factor to consider is household purchasing dynamics. Families with kids will continue to drive spending and trips in edible food, having contributed more to growth than households without kids in 2024.⁸

That said, it’s important to realize that households without kids are more numerous and spend more, overall than households with kids, so it will be important to capture more of their share of spend in 2025 if they’re not to be left behind.⁹

The reason why households without kids under index in edible sales is in part due to the fact that households without kids are 10% less likely to cut back on dining out than those with kids. However, there is opportunity to continue driving growth in key channels where households without kids spend more than households with kids: in Grocery & Dollar (where they spend 2x) and in Drug (where they spend 2.6x).¹⁰

C. Number of channels & retailers shopped remains high in 2025

Almost half of food & beverage shoppers now shop multiple channels, up from less than one-third pre-COVID.¹¹ Shoppers continue to buy across a variety of different channels based on their evolving needs. In 2024, shoppers averaged close to 17 different retailers shopped with Grocery (+3.5%), Dollar (+0.6%), Convenience (+0.5%) and Club (+0.1%) all seeing increases in the number of retailers shopped vs 2023.¹²

So what will it take to win in 2025 with inflation-disrupted, income-constrained, and more discerning shoppers who are still on track to increase their food & beverage purchases?

In times of great change, it’s important to get back to basics. So let's tap the latest data and insights to win over new shoppers, earn their loyalty, and ensure their needs are met, unlocking brand new opportunities for growth.

from all of us at PepsiCo, wishing you a happy and successful new year!

We hope you’ve found these insights and tips eye opening and useful. And we hope that you will use these three keys to both get back to growth-driving fundamentals while seeing them through the prism of 2025’s new landscape.

Be on the lookout for more pepviz thought leadership articles, case studies, and insights throughout the year specifically focused on helping you win over new shoppers shopping in new ways, drive trips and loyalty by creating joyful experiences, and increase conversion by optimizing assortment. We hope you'll reach out to continue the conversation and partner with PepsiCo to create even more bespoke and innovative programs for your food & beverage business this year and for years to come.

pepviz is PepsiCo’s approach to using data & insights to foster partnership and drive growth with our forward-looking food & beverage retail customers.

Please visit us at www.pepviz.com