How modern consumers are shifting their spending

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How modern consumers are shifting their spending

14 Jul 2025

Maggie Glisan

Maggie Glisan covers consumer trends and emerging markets for the Commercial Baking media group. She spent the bulk of her 15-year career as the senior food editor at Better Homes and Gardens, where she was responsible for producing, writing and editing stories and developing recipes for the monthly magazine and special interest publications. Prior to that she worked as graphic designer and assistant art director in the Food Group at Better Homes and Gardens, where she took on an increasing role in content creation and editorial development.

KANSAS CITY, MO — If there’s one thing that’s certain right now in the bakery industry — or in any industry for that matter — it’s that nothing is certain.

Inflation remains high, tariff policies seem to shift by the hour and the possibility of a recession looms large. Amidst this backdrop of economic volatility and instability, it could be assumed that consumers are focusing on one thing and one thing only: spending less or, when they do, choosing the least expensive options. But that’s not the whole story.

“Just because there is financial pressure doesn’t mean the current environment is a constant race to the bottom,” said Anne-Marie Roerink, principal and founder of 210 Analytics. “Far from it.”

In times of uncertainty, consumers feel they lack control about the big things, but what they can control is their own behaviors and how their household buys and consumes. And what they choose to buy and how they choose to spend comes down to value.

The idea that value simply means cost vs. benefit is no longer the case. According to Hartman Group, the new value paradigm takes a subjective, consumer-driven approach to assessing the benefits of experience, quality, relevance, price and convenience. For example, 62% of consumers are willing to pay more for a food/beverage that saves time, effort or mess, an appeal as they seek more convenience in their products. For 31% of consumers, a pleasant store environment will entice them to spend more money, proof that some shoppers value experience over price.

When assessing worth, consumers turn to their personal priorities, making the emotional dimensions of value the real game changer when it comes to choosing one product over another, especially in an environment of economic uncertainty.

“We do see consumers seeking value, but value is more complex than just the price of things,” Roerink said. “How much time do I have? What am I in the mood for? What else have I been spending my money on? How about nutrition?”

Sally Lyons Wyatt, global EVP and chief advisor, CPG and foodservice for Circana, said this bifurcation is happening across grocery store categories.

“Many consumers — low, middle and even higher income these days — are in a non-stop budgeting balancing act, and that means they are shifting dollars between foodservice and retail, between items, between brands, between cate¬gories.” — Anne-Marie Roerink | principal and founder | 210 Analytics

“People will make trade-offs,” she said. “They might opt for the private label of one item because it checks enough boxes to get the job done but then recognize where sacrifices have been made in another area and splurge on a different item.”

She noted that private brands are likely to continue growing, with the well-established bakery category playing a key role in that momentum. Roerink also expects more consumers to explore private brands as they become increasingly budget-conscious, adding that experimentation offers a valuable opportunity for grocers to attract new customers.

“Many consumers — low, middle and even higher income these days — are in a non-stop budgeting balancing act, and that means they are shifting dollars between foodservice and retail, between items, between brands, between categories,” Roerink said. “That has led to more trial with private brands, and if they deliver, they’ll continue buying the private brand.”

Experimenting with portion size is another way bakers can deliver value, but that doesn’t simply mean doling out value packs.

“In every category, I’m seeing manufacturers and retailers move to what I refer to as the ‘continuum of choice,’ and in a way, smaller portion sizes check off multiple boxes [for the consumer] in that they can be more affordable, they reduce waste and they’re a better fit for a smaller household,” Roerink said.

On the flip side, Roerink said she sees a lot of strength for larger family packs as well, especially for items that can be frozen and used over time, noting that the trend has everything to do with a more favorable price per pound and the ability of consumers to spend a little bit more money over the long term.

Overall, she said, consumers are hyper-focused on the price per unit. They want to know how an item fits within their total budget, and they’re particularly conscious of waste.

“People are looking to consume every dollar they are spending on food rather than throwing out a lot of items,” Roerink added, “so I think package size variety makes a ton of sense in the current environment.”

Then again, despite mounting financial pressures, people aren’t cutting back when it comes to treating themselves. According to Tastewise, searches and mentions of “premium” and “indulgent” baked goods have increased by 13% year-over-year. Items like gourmet cookies, rich pastries and specialty breads — think sourdough, focaccia or brioche — are growing in popularity, and consumers are especially drawn to elevated flavors like matcha (+18%), pistachio (+21%) and sea salt caramel (+16%), all of which add a sense of luxury.

This story has been adapted from the 2025 New Products Annual of Commercial Baking. Read the full story in the digital edition here.

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