FoodReview: Consumer-Driven Agriculture, Vol. 25, No. 1

Rosanna Mentzer Morrison, Economics Editor

FoodReview No. (25-1) May 2002

About this magazine

This issue of FoodReview projects U.S. food consumption and spending to 2020. Articles discuss how farmers, processors, retailers, and foodservice operators are responding to this changing demand for food. Two additional articles look at food assistance expenditures and household food security.

In this report ...

Articles are in Adobe Acrobat PDF format.

Contents, (59 kb)

Upfront, (40 kb)

Feature Articles

• America's Changing Appetite: Food Consumption and Spending to 2020—U.S. food expenditures are projected to rise 26 percent, or $208 billion, between 2000 and 2020. Income growth and population growth will drive increases in per capita food expenditures and food demand, respectively. The demand for value-added products will increase the share of every food dollar that goes to processors and retailers, and the demand for quality-differentiated products may result in new markets for high quality or specialty crops. The aging of the U.S. population may have a slight negative effect on per capita consumption and away-from-home food expenditures. Ethnic shifts and increased education levels among the U.S. population are likely to increase per capita consumption of certain food categories, such as fruit and fish. (194 kb)

• Population Growth and Demographic Change, 1980-2020—The U.S. population of 281 million in 2000 will increase by 50-80 million by 2020, according to U.S. Census projections. Over the next two decades, the Nation's Hispanic population is expected to grow by 1.2 million annually, compared with annual growth of 500,000 among non-Hispanic Whites and 400,000 each among Blacks and Asians. Due to the aging baby boom generation, the number of Americans older than age 65 will jump from 35 million in 2000 to 54 million in 2020. Average household size, which fell from 2.8 persons in 1980 to 2.5 persons in 2000, will shrink to 2.4 persons in 2020. (29 kb)

• New Health Information Is Reshaping Food Choices—Several studies have shown that information linking diet and health influences consumers' food choices. Between 1955 and 1987, the increase in information linking cholesterol and heart disease resulted in decreased per capita consumption of shell eggs by 16-25 percent. Between 1966 and 1988, health information increases led to decreased consumption of pork and increased consumption of poultry and fish. Studies have also shown that nutrition knowledge differences among consumers translate into measurable differences in food and nutrient intake. (137 kb)

• Changing Consumer Demands Create Opportunities for U.S. Food System—Different sectors of the food system are competing to identify and provide more processed and higher value foods. Food retailers are offering a broader variety of healthful, ethnic, and more convenient foods in a wider variety of formats. Nontraditional food retailers, such as supercenters and warehouse club stores, satisfied consumers' desires for convenience and economy and increased their share of at-home food expenditures to 24.5 percent in 2000. Full-service restaurants, which offer the most amenities, are the fastest growing restaurant segment. (132 kb)

• Food Product Introductions Continue To Decline in 2000—New food product introductions, which peaked at nearly 17,000 in 1995 in the United States, dropped to just over 9,000 in 2000, the fifth consecutive year of decline. The top five categories in 2000-candy, gum, and snacks; condiments; beverages; bakery products; and dairy-declined significantly over the 5-year period. New all-natural food products increased 178 percent from 1995 to 2000, while new organic products increased 57 percent. Reduced- and low-fat products more than doubled between 1999 and 2000. (160 kb)

• Innovation by Food Companies Key to Growth and Profitability—In order to profit in today's marketplace, many food firms are reshaping how they work together with other members of the food supply chain as well as how they organize themselves as individual companies. For example, food retailers are working more closely with distributors and manufacturers to manage product mix and replenish stock. The foodservice industry is promoting standard product identification codes. Firms at each stage of the supply chain are also adjusting the size and scope of their operations. (119 kb)

• Farm Business Practices Coordinate Production With Consumer Preferences—Consumer pressures on agriculture for variety, quality, and safety of food are affecting how the industry is organized. Farm production is becoming more capital intensive, with emphasis placed on value added. Contract production is increasing, as processors and distributors attempt to ensure steady supplies of goods, improved quality control, and traceback capabilities. Farmers are turning to the Internet and other high-tech resources to keep pace with changing consumer demands. Some farmers have formed new generation cooperatives to gain more control over the stages of food production. (156 kb)

• U.S. Food Sector Linked to Global Consumers—Foreign markets are likely to be an important source of future sales growth for the U.S. food sector. Rising incomes in low- and middle-income countries translate into increased demand for food items, such as meat, and increased food expenditures. U.S. exports of high-value foods may face competition from domestic industries overseas, but demand for ingredients to produce these foods, such as soybeans, will also increase. Global macro-economic conditions, such as economic growth rates of U.S. trading partners and currency exchange rates, will affect U.S. food exports. (116 kb)

• Food Assistance Expenditures Increase in 2001—In fiscal 2001, Federal expenditures for domestic food assistance programs grew 4 percent, to $34 billion, the first increase in annual food assistance expenditures since fiscal 1996. The Food Stamp Program accounted for much of the increase in fiscal 2001 expenditures, as declining economic conditions in the United States increased the number of people receiving food stamps. However, nearly all of the individual programs comprising the Nation’s food assistance system expanded to varying degrees in fiscal 2001.

• ERS Releases New Report, Household Food Security in the United States, 2000—ERS presents the latest in a series of annual statistical reports on the prevalence of food security, food insecurity, and hunger in U.S. households, based on the September 2000 Current Population Survey Food Security Supplement. This year's report, in addition to statistics on food security, includes information on how much U.S. households spent on food and the extent to which food-insecure households participated in Federal and community food assistance programs.

Entire report, ( 824 kb)

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Updated date: May 2002