As food shoppers "trade down" to cope with higher food prices, they will likely purchase cheaper cuts of meat and lower beef grades, a retail food consultant said on Tuesday.

These cut and grade trade downs can be expected in addition to some shoppers choosing cheaper proteins pork and chicken over beef, Willard Bishop Managing Partner Jim Hertel said during a Webinar on the future of food retailing.

Hertel predicted food inflation as high as 7 percent to 11 percent annually for at least the next two years, as increased global protein demand, reduced global grain production and biofuels competition for feed inputs such as corn continue.

As consumers shift from eating at restaurants to purchasing retail food and from indulgence items to cheaper private label brands, Hertel said retailers with strong private label brands such as Publix, Costco and Trader Joe's are well placed. Whole Foods, even though it has a premium price format, also is improving its positioning by expanding its private label offerings, he noted.

However, higher-priced health and wellness foods overall could take a hit as consumers tighten their belts, with less-understood functional foods (those with health-enhancing additives) even more vulnerable than organics, Hertel predicted.

By Janie Gabbett on 6/25/2008 for Meatingplace.com