San Juan, Puerto Rico – Consumers are becoming increasingly cautious and strategic in their purchasing decisions, according to a new study on 2025 economic projections for the food industry commissioned by the Chamber of Marketing, Industry, and Food Distribution (MIDA).
The study, conducted by Nielsen IQ, reveals a shift from the cautious consumer of the past few years to a more determined one. "We're seeing a transition from a consumer who was very cautious and intentional about their budget to a consumer who is more determined," said Tatiana Irizarry, Sales Leader at Nielsen IQ. This shift is attributed to the economic pressures and uncertainties of the past three years, which have forced consumers to become more resilient and focused on their spending.
A Divided Consumer Landscape
A survey conducted as part of the study found that while 30% of consumers reported being in a better financial position than they were four years ago, 32% indicated they were worse off. However, Irizarry noted that "the gap between these two groups is narrowing," suggesting a more polarized consumer landscape.
The primary reason cited for a decline in financial well-being was the rising cost of living, with 71% of respondents identifying it as a major concern. This was followed by economic slowdown (41%) and job insecurity (31%).
Regional Disparities
The study also revealed regional disparities in consumer sentiment. While some Latin American countries reported improved economic conditions, the United States, a key market for Puerto Rico, indicated a decline in overall financial well-being.
Soaring Food Prices
Consistent across all surveys, the rising cost of food emerged as the top concern for consumers. In Puerto Rico, for instance, the cost of a $100 grocery bill in 2022 has increased to $124 today, highlighting the significant impact of inflation on household budgets.
External Factors Impacting the Food Industry
Economist Luis Benítez of Economic Intelligence highlighted several external factors that could further impact the food industry. One such factor is the potential imposition of tariffs on imports by the United States. Benítez estimated that these tariffs could lead to an average increase of $3.57 per week in food costs for American families.
Additionally, labor disputes like the potential International Longshoreman's Association (ILA) strike could disrupt supply chains and drive up food prices. JPMorgan Chase estimated that such a strike could cost the economy between $3.8 billion and $4.5 billion per day.
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