Within 10 years, online food shopping will reach maturity
Within a decade, in the current climate of technology adoption and evolution, consumer spend on online grocery shopping could reach $100 billion, or the equivalent of 3,900 grocery stores based on store volume.
That’s the conclusion of new research being released by the Food Marketing Institute and Nielsen, which offered a preview of their “Digitally Engaged Food Shopper” analysis Saturday at the FMI Midwinter Conference in Scottsdale, Ariz.
The findings were discussed by a panel that included Dave Bornmann, SVP of business development at Publix Super Markets; Benno Dorer, chairman and CEO of the Clorox Co.; Chris Morley, president of Nielsen USA; and Tom Furphy, CEO of Replenium. The discussion was moderated by Thom Blischok, chairman and CEO of The Dialogic Group.
The group stressed a need for greater collaboration between retailers and CPG suppliers, who need to operate “like one integrated company,” declared Mark Baum, FMI chief collaboration officer and discussion panelist. Success will come to those who collaborate effectively, embrace automation, understand consumers better and use the new research as a call to action, panel members said.
The introductory set of insights from this joint, multi-year initiative offer a comprehensive look into the behaviors, motivations and expectations of the digitally engaged food shopper. This first perspective offers recommendations on how food marketers and manufacturers should be preparing their strategies and managing the organizational change that will be required to engage those shoppers.
“While we are more connected than ever to influence what shoppers buy, the window to influence those moments is narrowing,” Baum said. “FMI and its members will need to seize the opportunity to harness new skills and collaborate more seamlessly than ever before to effectively reach these digitally savvy food shoppers. We’re building the tools to help our members assess where they are in their connected commerce strategies.”
Initial findings from this study show that within the next decade, online food shopping will reach maturation in the U.S., far faster than other industries that have come online before. Research also revealed that the center store is likely to shift online faster than other departments, suggesting a fundamental evaluation of the role the store plays in digital food shopping.
“The grocery business truly is at a digital tipping point, where every aspect of the shopper’s journey will soon be influenced by digital, and increasingly enabled by digital platforms,” Morley said. “The need for retailers and manufacturers to know the differences around how consumers shop online versus in-store is greater than ever before. Analytics will be key for retailers and manufacturers to understand the digitally engaged food shopper on a deeper level. Beyond unified insights that connect the dots across consumer interaction and platforms, the winning strategy will turn metrics into action steps towards effective digital engagement.” read more
By Jim Dudlicek, EnsembleIQ
The health and wellness trend has gained huge momentum in the food retail industry over the last few years, and 2017 is shaping up to be no different. From national chains to independent store operators, retailers and brands will likely incorporate health and wellness into their business strategies this year. But what specifically will they focus on?
If 2016 was any indication, there are several health and wellness trends that food retailers and brands can expect to carry into 2017. And after combing through coverage in SmartBrief’s food and beverage newsletters, we identified some of last year’s biggest trends in health and wellness that the food industry should keep in mind in the coming year.
In-store efforts and events
Schnuck Markets offered dietitian-led store tours and cooking classes for new parents through their Baby Month initiative, Raley’s Supermarkets helped shoppers take small steps toward healthier lifestyles with its “Let’s Begin” program and Inserra Supermarkets ShopRite celebrated a decade of its retail dietitian service through a Healthy Meals Makeover event series last year, a string of similar efforts that will likely continue into 2017. Kroger banners Ralphs and Food 4 Less launched an effort that paired doctors, dietitians and nutrition experts with shoppers in stores to help them make healthier food choices. Last year, the number of dietitians working in retails stores neared the 1,000 mark, the Retail Dietitians Business Alliance reported.
“We’re really seeing the supermarket registered dietitian shine,” FMI’s Heather Garlich told the Journal News.
Last year’s in-store health and wellness efforts were not all focused around retail dietitians. This year, the industry could also see events like Produce for Kids’ partnership with Power Your Lunchbox Pledge, which included a campaign that provided recipes, tips and promotions aimed at helping families eat healthier lunches.
Easy, healthy meals and snacks
Produce for Kids’ healthy lunch campaign fits into another 2016 trend that could have legs into 2017. Shoppers sought out healthy meal and snack options, but they also looked for options that were easy and convenient, which are two words the food retail industry could hear a lot about this year too.
Healthy brand EatingWell teamed up with Bellisio Foods last year to offer easy-to-prepare frozen entrees like Cherry Port Pork that are also free of preservatives, artificial colors and hydrogenated oils. Meanwhile, Hormel Foods focused its product expansion around convenient, healthy offerings, adding Rev Bites, Muscle Milk bars and other portable better-for-you snacks. They are just two of many brands that tapped shopper demand for healthy and convenient food options last year, and expect more to come in 2017.
Better-for-you snacks and beverages
Hormel’s better-for-you product launches also highlight last year’s trend toward better-for-you snacks and beverages, which is sure to remain relevant this year. Makers of snack packs took advantage of last year’s demand for healthy snacks by offering veggies with built-in dips and other pairings such as cheese cubes and pretzels.
In the fall, PepsiCo made plans to revamp its lineup of snacks and beverages to focus more on health through efforts including seasoning its Frito-Lay offerings to decrease sodium and gradually lowering the calories in two-thirds of its beverages to 100 calories or less per 12-ounce serving. And Pepsi wasn’t the only company turning its focus to healthier beverages last year. Research from Canadean found that functional drinks including vegetable blends and probiotics were seeing increased interest, which shows no signs of slowing down this year.
Functional, natural and organic foods
Consumers’ cravings for functional beverages last year points to another trend likely to continue into 2017. Functional foods like fermented foods that promote gut health and immunity and chocolate products that also provide health benefits continued to gain popularity last year. Meanwhile, shoppers are also likely to continue seeking out natural and organic products this year, after sales in the category were slated to reach $69 billion last year, which was a trend that showed up in the aisles of national retailers and smaller chains alike.
There is a transformation happening in the food and beverage marketplace today. The fancy imported goods and gourmet products that were experienced on rare or special occasions once typically associated with premium quality are not exactly relevant to today’s modern consumer.
Because today’s definition and expectations of quality is being defined by the contemporary consumer. There has never been a time as now in which consumers have been more engaged. They have amazing access to information about food and drink, and food production more than ever before. For today’s consumers, food is now a cultural product to discover, share, make and trade. This reconnection with food and its origins is encouraging a new level of participation.
Think about this food cultural shift: not that long ago, chefs and their staff and all food production were kept in the kitchen, in the back off the restaurant out of view from diners. Today, it’s about open production and seeing chefs in action because food, cooking and the artisans behind the craft now take center stage. Now it’s hand-thrown pottery, having a front row seat to the magic in the kitchen and casual quality with hand-stitched aprons and plaid shirts.
In essence, America’s foodways are becoming more sophisticated and diverse as consumers increasingly aspire to higher quality food experiences they simply did not grow up with. With this consumer-driven redefinition of quality playing out in food culture today, what, then, does “premium” mean and how should brands express quality? This was the question at the heart of The Hartman Group’s A.C.T. (Anthropology. Culture. Trends.) Seattle symposium in September 2016: Deep Dive Into the Premium Food & Beverage Marketplace. Throughout the session, we engaged in a thought-provoking discussion to hone in on what today’s “premium” looks, smells, tastes and feels like. Here are some key thoughts about what premium means:
Winning in the new premium marketplace is as much about thinking differently about a category as much as it is about selling different products. Product quality is implicit, while being authentic, transparent and passionate are key building blocks. Consumers will increasingly bring premium into their households and premium will continue to evolve in meaning.
Marketers should pay attention to which products are showing growth in the natural and specialty channels and ask, “what attributes do they have that will mainstream in the next two to three years?” They should look to other categories for inspiration as well. Staying on top of what premium means will be essential. Food and beverage stakeholders should: