Low-Volume Trend Continues to 2027: Consumer Sophistication and the Technological Response of the Food Supply Chain

According to the latest forecast from market research firm Circana, the U.S. food and beverage industry will see growth maintained between 2% and 3% in 2027, driven primarily by pricing and product mix, while sales volumes are expected to remain flat. This trend continues the performance of the first half of 2026—retail food and beverage categories grew 2.2% year-over-year, with zero volume growth and price and mix contributing a 2.3% increase.

Sally Lyons Wyatt, Global Executive Vice President and Principal Advisor at Circana, noted: "Consumers are no longer simply trading down or cutting spending; they are becoming more savvy and efficient. Whether by optimizing pack sizes, switching between private labels and brands, using AI-assisted shopping, or reducing waste, consumers are finding smarter ways to achieve their desired consumption outcomes while coping with ongoing economic pressures."

Behind the weak volumes lies the further manifestation of the K-shaped economic effect. A previous report from Rabobank's North America division showed that U.S. food inflation could climb to 6% in the second half of 2026 and moderately ease to 3%-5% in 2027. Geopolitical tensions are transmitted through the supply chain to retail prices, and the responses of different income groups are clearly diverging: high-income households typically adjust spending within premium categories, while middle- and low-income groups shift more quickly to discount channels, private labels, and promotional items. This divergence has concentrated pressure on volumes in mainstream and discretionary categories.

Industry Impact

• Agricultural Production Efficiency: Weak sales volumes mean slower growth in demand for raw materials from food manufacturers, but upstream costs continue to rise under inflationary pressure. This forces agricultural enterprises and food processors to focus more on efficiency, and the adoption of precision agriculture, data platforms, and automation technologies may accelerate.
• Farm Operation Models: Rising consumer price sensitivity prompts retailers and brands to reduce waste and sign more flexible contracts directly with farms to lower inventory risks. Regenerative agriculture and carbon farming, which reduce agrochemical inputs and improve soil health, may become options for lowering long-term costs.
• Food Supply Chain: Consumers' "smarter shopping" includes AI shopping assistants and packaging optimization, requiring the supply chain to provide more granular product data and dynamic pricing capabilities. IoT and food technology platforms will be favored.
• Agricultural Investment Direction: Capital may shift from incremental expansion to efficiency technologies, such as precision irrigation, agricultural robotics, and alternative proteins. Technologies in food tech that reduce waste, extend shelf life, and optimize logistics will also attract attention.

Future OutlookOver the next 3-5 years, low growth in food sales may become the norm, but structural opportunities are emerging: - Agricultural AI applications: Consumer AI shopping behavior will drive reverse data collection and predictive analysis on farms, with AI becoming more deeply involved in decisions from planting to retail. - Automation trends: Rising labor costs will increase the penetration of agricultural robots and unmanned machinery in harvesting and sorting, offsetting profit pressures from sales bottlenecks. - Alternative proteins: Economic pressures may accelerate consumer shifts toward more cost-effective plant-based proteins or hybrid products. The alternative protein industry needs to reduce costs while improving taste. - Global trade patterns: If U.S. food inflation remains high, it will exacerbate volatility in global agricultural trade, prompting import-dependent countries to accelerate investment in domestic sustainable agriculture.