International Consumer & Retail Trends
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ERS analyzes data collected by various national (U.S. trade data
from U.S. Department of Commerce) and international organizations
(United Nations trade data, consumer expenditures and other
economic indicators from the World Bank), and a commercial vendor
(Euromonitor) to examine ongoing evolutions in global food
markets.
International Consumer
Trends
Consumer food expenditures in recent years (see Excel table 
) indicate a shift toward consumption of
higher value food products across all income levels. As income
grows, consumers in lower income countries shift their food
purchases away from carbohydrate-rich staple foods toward more
expensive sources of calories, such as meat and dairy products.
(See Richer World Wants a Richer Diet for more
information.) An examination of food expenditures and food sales
data indicates that middle-income countries, such as China and
Mexico, appear to be following trends in high-income countries,
measured across several dimensions of food system growth and
change. These include trends in important food expenditure
categories, such as cereals and meat, and in indicators of food
system modernization, such as supermarket and fast food sales. (See
Convergence in Global Food Demand and Delivery
for more information.)
The changes in food consumption patterns are largely driven by
income growth and demographic factors, particularly lifestyle
changes brought about by urbanization, away-from-home employment of
women, and increased levels of information. While income growth,
which affects the purchasing power of consumers, is one of the most
important factors contributing to demand changes, urbanization has
been equally important in changing the composition of the food
basket consumed. Urban areas are generally associated with higher
income levels, larger number of women in the away-from-home
workforce, higher levels of education, and a wider array of food
products available. Economic growth can continue indefinitely and
go in cycles. However, urbanization has so far been a one-way
process and, as occurred in developed countries, eventually the
rural share of the population becomes so low that urbanization is
no longer an important factor in projecting food demand. Among
developing countries with a large share of rural population and
rapid rates of urbanization, urbanization is expected to
significantly alter consumers' diets with a greater consumption of
meats, fruit, vegetables, and processed food products. (See Where Will Demographics Take the Asia-Pacific Food
System? for more information on these and other demographic
trends.)
(see Excel table )
Urbanization and income growth are also associated with more
household amenities that enable consumers to purchase and store
perishable food products. During the last decade, the percentage of
households possessing refrigerators (see Excel table ) increased significantly in most
developing countries. Similarly, the percentage of households
owning microwave ovens (see Excel table ) is rising across countries,
promoting sales of "ready meals."
ERS analysis of global food demand.
ERS has estimated income and price elasticities of demand for broad
consumption and food categories across 144 countries using 2005
data from the International Comparisons
Program (ICP). These data on spending on food and other
consumption categories and their respective budget shares provide
the basis for improved income and price elasticity estimates, which
give insight into food demand trends across countries and improve
researchers' ability to predict potential shifts in demand for food
products across different food groups.
The results of ERS research confirm many of the findings
established by earlier studies. Low-income countries spend a
greater portion of their budget on necessities, such as food, while
richer countries spend a greater proportion of their income on
luxuries, such as recreation. Low-value staples, such as cereals,
account for a larger share of the food budget in poorer countries,
while high-value food items make up a larger share of the food
budget in richer countries. Overall, low-income countries are more
responsive to changes in income and food prices and therefore make
larger adjustments to their food consumption patterns when incomes
and prices change. Adjustments to price and income changes are not
made uniformly across all food categories. Staple food consumption
changes the least, while consumption of higher-value food items
such as meats changes the most.
Retail Trends
Analysis of retail sales data (see Excel table
) reveals further trends in food
consumption patterns across countries. Packaged food products
account for large shares of total food expenditures among consumers
in high-income countries where the demand for convenience is
growing. The United States, the European Union, and Japan account
for over half of total global sales of packaged products. In
developing countries, intermediate products-such as vegetable oils,
dry pasta, and other dried products-account for the bulk of retail
sales. However, market trends indicate strong growth in sales of
packaged food products among developing countries. This growth
involves three-fourths of the world's consumers and is partly due
to rapidly growing income levels.
Trends in the soft drinks and beverage sector are often an
indicator of consumer ability to purchase higher value foods, and
foreign investment in the beverage sector often functions as a
bellwether for the health of local food industries. (See Globalization of the Soft Drink
Industry 
for more information.) Analysis of
soft-drink retail sales data (see Excel
table )
indicates a rapidly expanding sector with large sales growth in
Eastern Europe and Asia. Markets in developed countries, however,
are sluggish, particularly for carbonated drinks. Carbonated drinks
face strong competition from fruit juices and various health and
ethnic drinks. In many developing countries such as India, where
growing affluence has spurred the demand for clean drinking water,
increased demand for bottled water has further boosted total soft
drinks sales.
Demand for process attributes has increased consumption of
quality-assured products-such as organic foods-in many developed
countries and among small wealthy segments of some developing
countries. In many countries, particularly in Western Europe, this
has resulted in increased sales of private retail brands (see Excel table ), because retailers can set and
enforce their own product quality standards. In developing
countries, expansion of supermarket chains has also introduced
private retailer brands, mainly as cheaper substitutes for major
manufacturer brands.
See the Readings page for ERS reports and articles
related to international consumer and retail trends.