5 ways to recession-proof food & beverage brands

Nov 04, 2022 by Mark Dingley

Lean Manufacturing reduces non-value-adding waste. But what about your packaging?


Are you ready for a recession? More than 8 out of 10 (86%) CEOs at the world’s largest businesses predict a global recession to hit over the next 12 months, according to the KPMG 2022 CEO Outlook.

Recessions are defined by the National Bureau of Economic Research as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production and wholesale-retail sales.”

But here’s the thing:

Not all products see a decline in sales during a recession.

The top 3 food & beverage companies – Coca-Cola, PepsiCo and Nestlé – emerged from the Great Recession in 2007-09 more dominant than before it.

Another category that traditionally benefits from an economic downturn is frozen food, as consumers look for more affordable meal options.

While consumers tend to tighten their purse-strings, they still seek indulgences during a recession ­– so long as they don’t break the bank. Consumers continue to buy alcohol, but they swap drinking at bars or restaurants for home instead.

So, how can you make sure your food or beverage brand is ready to weather another storm and come out the other side even stronger?

As Sir Winston Churchill once said: “Never let a good crisis go to waste.”

Date Marking Food

Here are 5 steps you can take:

Know what your customers want

First and foremost, you need to understand what your customers want. During a recession, your customers’ needs can, and will, evolve. So take every opportunity to find out what they want and what motivates them. Listen to your customers on social media, ask for feedback through surveys, and keep a close watch on sales data.

Don’t lower your price – show value

When it comes to pricing, you might think that now is the time to lower prices and offer excessive promotions to move products. But this can actually devalue your brand. Sure, you might gain customers in the short term, but it can do long-term damage to your brand. Instead, look at your value proposition. How can you communicate value beyond the price? Look for ways to show consumers why they should continue to choose your brand. For example, you could market your products with easy meal preparation options on the back via a recipe and highlight the value.

Date Marking Food

Introduce new packaging sizes

Kraft Heinz CEO Miguel Patricio was recently asked how the company is working to mitigate the impact of inflation on consumers. He explained how the company is changing the packaging sizes and assortments for nearly all its key brands¬ – including economy packs with 12 bottles of ketchup. By offering different packaging sizes, you can have products that appeal to consumers at different price points across the category. Many consumers will switch to larger-sized items for value during a recession. At the same time, luxurious items could be sold in smaller packaging sizes to give consumers access to affordable indulgences.

Streamline your range

If you have lots of products, now might be the time to streamline your range and focus on better-performing items. That said, consumers still want to try new things, so do continue investing in innovation and new product development.

Date Marking Food

Double down on marketing

It’s tempting to slash advertising and marketing budgets during a recession, but that’s a detrimental strategy for brands in the long term.

In Field and Binet’s 2008 study on marketing effectiveness, industry experts found that cutting your marketing budget in an economic downturn might help protect short-term profits, but your brand is certain to be weaker and less profitable once the recession ends.

In the United States during the last financial crisis, Coca-Cola and Budweiser invested more in their flagship brands, innovation and advertising. It paid off. These actions yielded more sales and high organic growth through the recession.

Now is the time to stay in front of your customers, maintain a relationship and build trust. Consistency is key. By communicating your brand message consistently, you create a strong, recognisable image in your customers’ minds, which builds awareness and ultimately leads to more loyalty. As a bonus, advertising may even be cheaper during this time, so you’ll get more bang for your buck.

Over to you

Consumers will still buy food & beverages during a recession, but their behaviours will change. Stay in tune with your target audience and how they are spending across your category. Understand their motivations and adapt your marketing and product offering to meet their needs and provide true value. Above all, be open to change. Remember, the brands that emerged stronger from the Covid pandemic were those that recognised the unique opportunities and were ready to pivot. The same rules apply now.

Looking for more ways to grow your business? Check out these top strategies.