Food choices reinforce the idea of a bifurcated (K-shaped) U.S. economy
The concept of a K-shaped economy, in the current context, is that the financial health and spending growth of higher income consumers is improving (the upper part of the “K”) while it is declining for many other consumers (the lower part of the “K”). Based on food purchasing patterns in 2025, and expected in 2026, this bifurcation of consumer financial health appears to be well-entrenched in the current environment.
We have witnessed growth in food purchases at both ends of the value-premium spectrum, with strength in value and premium segments, at the expense of mid-tier food offerings. Higher-income households remain financially comfortable, even as inflation has remained sticky (although it is getting better), and benefit from asset ownership combined with long-term debt that is locked-in at relatively low rates. Higher-income consumers don’t typically eat significantly larger quantities of food as their financial well-being improves, but they do trade up to more premium choices. Hence, the observed growth at the premium end of the food spectrum.
Lower-income consumers, on the other hand, are spending more cautiously, as they continue to face inflationary pressure, but do not have the same asset-based financial buffer as higher-income consumers. Lower- and middle-income households are shifting to an increase in home-cooked meals at the expense of less dining out. These consumers are opting to purchase more lower-priced brands, private label products, and are cutting back on non-essential food items. Hence, the observed growth at the value end of the food spectrum.
Read more about current conditions across the food and agriculture industry in the latest North American Agribusiness Quarterly.
Essay Author
Roland Fumasi
Head, RaboResearch Food & Agribusiness, North America
Report Authors
Al Griffin
Senior Data Analyst
Christine McCracken
Senior Analyst, Animal Protein
Lance Zimmerman
Senior Analyst, Animal Protein
Tom Bailey
Senior Analyst — Consumer Foods
JP Frossard
Analyst — Consumer Foods
Stephen Nicholson
Global Strategist — Grains & Oilseeds
David Magaña
Senior Analyst, Horticulture
Xinnan Li
Senior Analyst, Packaging & Logistics
Philip Marey
Senior U.S. Strategist
Pablo Sherwell
Lead of F&A Data Analytics — North America
Samuel Taylor
Analyst — Farm Inputs
Owen Wagner
Senior Analyst — Grains & Oilseeds
Lucas Fuess
Senior Dairy Analyst
Eric Gibson
Analyst — Farm Inputs & Crop Production Sustainability
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