It’s summertime but the grilling isn’t easy, Rabobank says in its most recent report. The 2023 Rabobank BBQ Index measures the cost of staple ingredients for a 10-person barbecue. Analysts say it will cost $97 to host a cookout on Independence Day this year, up from $73 in 2018 – a 31% increase.
The report also reveals America’s grillers are poised to splurge on quality meats and drinks this Fourth of July as they prioritize paying for experiences over durable goods.
“As families across America prepare to celebrate the Fourth of July with the time-honored tradition of a backyard barbecue, it’s hard to ignore that near-record food prices have taken a big bite out of household budgets. Up and down the supermarket aisles, we have seen hefty price tags that are difficult to stomach,” Rabobank says.
Prices for soda are up 53%, white bread is up 51%, and potato chips are up 46%. During this period, chicken prices also jumped 37%, lettuce gained 29% and ground beef rose 25%. Beer, the largest expense in the Rabobank BBQ Index, saw its prices rise 22% over the last four years.
Source: Bureau of Labor Statistics. RaboResearch
Consumers Prioritize Experiences Over Goods
Many consumers—particularly those under 40—are prioritizing experiences over goods, Rabobank points out. Consumers are increasingly placing a premium on socializing and fostering relationships.
“Consumers have taken some heavy punches but they’re still standing,” says Tom Bailey, senior consumer foods analyst at Rabobank. “They’re being shrewd in areas that don’t enrich experiences, while giving in to the urge to splurge where it matters most. With that mindset, look for spending to heat up this summer on quality meats and drinks—the recipe for a memorable barbecue.”
There’s no doubt the “experience over things” trend started before the COVID-19 pandemic, particularly among millennials and Generation Z.
“But the trend has since accelerated as absence only made the fire burn brighter. Numerous academic studies have shown that people derive more happiness from their experiences than from their possessions,” Rabobank says. “Among baby boomers, spending on travel and food has increased thanks, in part, to an 8.7% cost-of-living adjustment to their Social Security benefits this year.”
The healthy labor market is also important to consider, Rabobank points out. The May jobs report showed unemployment at 3.7%—down from its pandemic peak of 14.7% just three years ago.
“Steady work makes it easier to justify increased spending when budgets are tight,” Bailey says. “Rather than trading down to soften the blow of stubbornly high inflation, we may see consumers trading up to more premium products.”
Rationale and Methodology
Learn more about the rationale and methodology of the Rabobank Barbecue Index here. https://www.prnewswire.com/news-releases/food-inflation-hottest-since-1978-gives-consumers-a-gut-check-301857180.html
