In light of yesterday's OECD news confirming that Americans remain the most obese nation in the world, and as McDonalds' blockbuster results yesterday showed, American consumers are increasingly spending more on food away from home. As shown in the chart below, spending on food at home and food away from home have been converging over the past 60 years, with traditional home-cooked family meals on the decline. In fact, according to the USDA, for the first time ever, the amount spent eating out has surpassed what US consumers spend on food at home.
Here are some other observations on US feeding habits via Bank of America:
- Consumers are eating alone more often and more "on demand". 47% of US meals are consumed alone and 43% of US consumers say they enjoy eating alone. Given how busy households and consumers have become, it is becoming more common to combine eating with catching up on news/social media, or to consume on the go. It also appears that the trend is for less planning for eating occasions. Millennials account for 40% of those who consume food within an hour of purchase. This is known as "immediate consumption" and accounts for about 15% of all meals. And 65% of instant consumables are eaten at home (source: Hartman Group/Forbes).
- Consumers are willing to pay a premium for increasing levels of convenience and on demand. Globally, on average, they are willing to pay 14% more for online grocery delivery, 25% more for meal kits, 30% more for prepared meals and 55% more for restaurant take-outs (source: Lux Research).
According to BofA, tech disruption is changing how US consumers spend money, even on "necessary" goods such as groceries.
- Spending by Millennials at online grocery stores has risen by 750% since 2012 and is running at a 55% yoy pace since 2015. Generation X (330%) and Baby Boomers (240%) have also increased spending at online groceries but at relatively much more modest rates.
- Major cities see a greater share of food consumption from dining out vs. groceries. The combination of competition from online grocers and greater urbanization may continue to present a challenge to the standard grocery store model.