Prepared Foods - August 2008 - (Page 27)

new product trends Meat contributes just 4% to total calories in low-income countries and rises to 13% in high-income countries. The increased caloric contribution suggests that, as income increases, consumers buy more animal products, thereby adding quality and variety to their diets. As income increases across country groupings, consumers in those countries increase their food spending to purchase more calories, typically in more expensive forms. Per capita consumption averages 2,618 calories per day in low-income countries, 3,000 calories in middle-income countries (a 15% increase) and 3,348 calories in high-income countries (an 11% increase). Yet, food spending more than doubles from one country group to the next—from less than $200 per capita per year in low-income countries, to $440 in lower middle-income countries, to $914 in the upper middleincome countries, to $2,133 in high-income countries, which is 10 times higher than that of low-income countries—even as its share of income declines. Lower income countries generally have diets that are high in starchy vegetable components (such as cereals or roots and tubers, which provide mostly carbohydrates) and low in animal products. Although the share of the food budget spent on cereals is similar (15-16%) across country groups, the contribution of cereals to overall calories decreases from 57% in low-income countries to 36% in high-income countries. This suggests that consumers in wealthier countries are substituting more expensive, higher quality and value-added forms of cereals (breakfast cereals and baked goods) for the cheaper domestic staples (cornmeal or rice) to increase the quality, variety and convenience of their diets. (See chart “Increasing Income and Food Quality.”) Conversely, animal products, such as meat and dairy products, are considered a luxury in lower income countries due to their relatively high cost, compared with cereal products. While the meat and dairy food budget shares Similarly, U.S. spending on fruit and vegetables rises only minimally across income levels. Households in the highest income group—which have an average of $8,000 more in after-tax monthly income than households in the lowest income group and spend over $450 more on food—choose to spend just $26 more per month on fruit and vegetables, which translates into an additional 21 cents per person per day on fruit and vegetables. The small change in spending on fruit and vegetables may explain why many high-income households also fail to meet intake recommendations for fruit and vegetables, and suggests that income and prices are not likely the main factors behind the low consumption of fruit and vegetables among low-income households, as is commonly believed. The dramatic increases in spending on food away from home and “other foods” suggest that, as income increases, U.S. households seek qualities such as taste, % variety, convenience and enjoyment. Whereas this may 60 sometimes occur at the expense of greater nutritional value, 50 this study is unable to look at changes in the nutritional value of diets in response to income increases. 40 Increasing Income and Food Quality Cereal budget share Cereal calorie share What Global Food Spending Trends can be Observed? If one compares average food spending of low-income countries with that of middle- and high-income countries, global trends emerge, some of which are comparable to those observed across income groups in the U.S. 30 20 10 0 Low-income Lower middleUpper middleincome income Countries grouped by income High-income Income growth promotes quality upgrades in staple foods choices. Source: Expenditure data from Euromonitor International 2006, calorie data from UN FAO 2005. Country grouping based on 2005 Word Development Indicators from the World Bank. www.PreparedFoods.com ● August 2008 27 http://www.PreparedFoods.com

Table of Contents Feed for the Digital Edition of Prepared Foods - August 2008

Prepared Foods - August 2008 Table of Contents Hitting the Shelves Promoting Craveable Foods and Beverages It’s a Small World MarketWatch Regulations: Safety Dance A Taste of Southeast Asia Flavor Secrets: Asian Five-spice Flavor Secrets: The Well-seasoned Potato On the National Menu To Serve and Protect: Flavor and Nutrition Protection Fat Applications in Transition: Creation of Good vs. Bad Fats A Tasteful Formulation Balance Nutrient Density and Dairy Foods R and D Applications Seminar: Formulation Information R and D Applications: Some Flavors Like it Hot R and D Applications: Prebiotics from a Conifer? R and D Applications: Seeing Red (Foods) R and D Applications: A Probiotic with Survival Skills Abstracts

Prepared Foods - August 2008

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