Where do consumers buy food, home or away?

Do food purchases vary by region?

How much do consumers spend on dairy?

These questions can be answered by delving into the database of consumer expenditures maintained by the U.S. Bureau of Labor Statistics. That database contains annual consumer expenditure data back to 1984 for various food categories and other household expenses. In addition, the data can be sorted by income level, age, race, region of residence, and other demographic identifiers. With the data recently updated to include 2020 observations, it is now possible to use this detailed data source to study the impacts of the pandemic on consumer food purchasing behavior for numerous categories and areas of the country.

Home versus away

As expected, some massive shifts are apparent in the 2020 data.

Food expenditures away from home declined by 32.6%. The smallest drop of -29.6% took place in the Midwest. Overall, larger declines were found in the West (-31.3%), Northeast (-34%), and West (-34.3%).

Food at home expenditures grew by 6.4%, with the largest increases showing up in consumers in the lowest income quintile (11.2%), followed by the top two income quintiles, both with roughly 10% growth. Regionally, food-at-home expenditure growth was much higher in the West (14.4%) and Northeast (11.8%), with the Midwest up just 4.2% and consumers in the South recording no change.

The demand for dairy

Despite large changes in the overall categories, dairy product expenses were relatively stable.

Expenditures for all dairy products grew by 4.2% (near the 2011 to 2019 average of 2.1%), with spending on fresh milk and cream up 5% and spending on other dairy products 3.8% higher. The Northeast remained the region with the highest level of dairy expenditures, followed by the West, Midwest, and South.

Dairy spending as a portion of total food at home expenditures continued a long-term decline and is now at 9.6% overall, compared to 10.5% in 2010, 10.8% in 2000, and 11.9% in 1990. Dairy expenditures as a portion of the total did not vary significantly based on consumer income level or region of residence.

Other than a few weeks in the spring of 2020 when consumers doubled down on their purchasing behavior of fluid milk amid the greatest uncertainty of the pandemic, domestic consumer expenditures on dairy products remained remarkably stable given the turmoil of 2020. While U.S. consumers will remain the largest market for our dairy industry, the need to focus efforts on expanding export opportunities in order to support continued growth in U.S. milk supplies remains apparent.

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(c) Hoard's Dairyman Intel 2021
September 23, 2021
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