According to Kantar, consumer spending for the out-of-home (OOH) snacks and beverages market has reached pre-pandemic levels globally.
In the first quarter of 2023, spending in the OOH snacks and beverage category had a year-on-year growth of 11 percent, equalling a total spend of 16.4 billion, compared to the 14.4 billion from the first quarter of 2020.
This follows a robust consecutive growth for the category over eight quarts following the summer of 2021, with the only signs of slowing appearing in 2022 due to inflationary pressure on consumer budgets, which has since rebounded.
While inflation has continued, it has not deterred this category's growth. In-home purchasing increased by 10 percent year-on-year in 2023's first quarter, with take-home purchases bearing the brunt of the cost-of-living crisis. Households have shown to be more price-orientated when it comes to at-home consumption.
In-home growth is primarily attributed to the higher prices of drinks and snacks. However, this does not apply to OOH. Of Europe's 12 percent value increase, only one-third has been due to higher prices, and the other two-thirds are due to natural expansion in consumption occasions. This has shown that consumers are willing and eager to go out to eat and drink again, prioritising OOH occasions.
However, while value sales have returned to pre-pandemic levels, the OOH category landscape is different upon close inspection than before the pandemic. Less money is being spent in places such as bars, cafes, and restaurants compared to the first quarter of 2020, with more spending on impulse and traditional trade outlets. Snacks are more likely to be bought on the go for immediate consumption as a convenient and more affordable cost replacement for entire meals.
This return to pre-pandemic values for the OOH category still has growth potential within the category, with the total market value continuing to come from in-home occasions at 66 percent, which was 64 percent before the pandemic.
Drinking on the go has also declined with beverages such as coffee, soft drinks and water, seeing a disparity between pre-pandemic levels of two percent.
