Convenience Foods: The Relationship Between Sales Volume and Factors Influencing Demand

Report Summary: The estimating equation developed from available data explained 87 percent of variation in the log of sales of 110 convenience foods. Taking into account those factors found to be significantly associated with sales should be a positive aid in guiding the development and sales promotion of new products and in reducing the high rate of product failure. The factors found to be significantly related to sales of convenience foods were: (1) Cost per serving, (2) degree of competition from similar products, (3) importance of food group in the consumer purchase pattern, (4) availability of the product, (5) success of similar convenience foods, and (6) special variables for specialty and ready-to-serve products. Within the framework of the model, these relationships have less than 1 percent probability of being caused by chance. No doubt, quality and promotion also are important in explaining variation in sales volume of convenience foods. Because of lack of data, these factors were not used in the analysis