KANSAS CITY — The good news is in 2024 the consumer packaged goods (CPG) sector has transitioned from negative volume growth during the past three years into positive territory. The bad news is the growth is forecast to be less than 1% by the end of the year and that a similar scenario may repeat in 2025.

The market researcher Circana is forecasting retail food and beverage volume growth in 2025 of between zero and 1%. Sales dollar growth next year is expected to be between 2.5% to 3.5%, driven by pricing of between 2% to 3%.

Circana’s outlook aligns with recent guidance issued by such CPG companies as the Campbell Soup Co. and the J.M. Smucker Co. Campell Soup, for example, is guiding organic net sales of flat to up 2%, reflecting modestly positive volume/mix compared to fiscal 2024, according to the company. The J.M. Smucker Co. lowered its guidance for fiscal 2025 and is guiding net sales comparable with fiscal 2024 to be in a range of 0.5% to 1.5%.

Mark Clouse, president and chief executive officer of Campell Soup, said of the guidance, “… I would tell you that we plan(ned) the year in a way where we’re not expecting some radical, accelerated recovery.”

In 2024, Circana projected volume growth of 1%, and at the mid-year the company said it stood at 0.8%, with top-line growth of 2.2% supported by price realization of 1.4%.

“While we anticipated greater support from an improving economy, the shift from away-from-home to in-home consumption helped keep our projections on track,” said Sally Lyons Wyatt, global executive vice president and chief adviser at Circana.

In November 2023, Circana projected that 2024 would bring a return to growth for the retail food and beverage sector after three years of volume declines. The projected volume increase of 1% Circana anticipated was above the 1% drop in 2023, coupled with a modest price increase of 1.6%, down from 5.7% in 2023 and 11.4% in 2022. As a result, top-line growth in 2024 is expected to slow to 2.3%, compared to 4.7% in 2023 and 9.5% in 2022.

Consistent with Circana’s perspective consumers will continue to take the bulk of their meals at home is the National Restaurant Association’s Restaurant Performance Index (RPI), which indicated in July that restaurant operators are increasingly pessimistic about sales growth. The RPI has two components — The Current Situation Index, which measures current trends, and the Expectations Index, which measures restaurant operators’ six-month outlook.

Only 23% of operators expect their sales volume in six months to be higher than during the same period in the previous year, according to the July RPI’s Expectations Index. That is well below the recent high of 40% in the April 2024 survey. Thirty-seven percent of operators think their sales in six months will be lower than during the same period in the previous year, while 40% expect sales to remain about the same.

Circana’s forecast reaffirms that consumer caution when it comes to spending will continue. It appears value will remain a priority as both the public and food and beverage manufacturers adapt to a market still seeking equilibrium in the wake of the pandemic, supply chain crisis and inflation.