Once again, here we are at the start of a new year which means several different prediction lists of expected food trends for the next 12 months. Not surprisingly, many of the ones I have seen cite an expected uptick in plant-based foods. This is definitely a safe bet, with manufacturers and retailers alike jumping on the bandwagon after last year’s faux meat wars heated up. While Beyond Meat got out of the gate first with its retail products and went in public in May 2019 (the stock skyrocketed from its IPO price of $25 all the way to $239 five months ago), Impossible Foods was the darling of last year’s Consumer Electronics Show (CES) with its Impossible Burger, setting the stage for a hugely successful year that included a partnership with Burger King and a highly anticipated retail launch in the fall. Plus, it just launched its newest products at this year’s show, a meatless pork and a meatless sausage (Beyond Meat already has a plant-based sausage product but not a stand-alone pork item) which are sure to be a hit overseas considering that pork is a main ingredient in many international meals. Other manufacturers followed suit with their own versions, including Tyson, Nestle and Conagra and now even retailers are getting into the game. Kroger just launched its own line of plant-based fresh meats called Emerge. “Kroger is driving the growth of the plant-based category through our Simple Truth brand, valued supplier partnerships, and industry-leading fresh merchandising strategies,” said Joe Grieshaber, senior vice president of merchandising. “Kroger anticipates interest in plant-based products to continue to grow in 2020, with the category being one of the key drivers of our natural and organic sales.” Other grocery chains will no doubt follow suit as this more of the population continues to move towards flexitarian, vegetarian and vegan diets. Don’t expect this battle to simmer down anytime soon – by the looks of it, things are just really starting to heat up!
Global customer science data company dunnhumby has just released its third annual Retailer Preference Index (RPI), a comprehensive nationwide study that examines the $700 billion grocery market in the U.S. The study surveyed 7,500 American consumers in order to evaluate retailers based on seven tenets (price, quality, digital, operations, convenience, discounts/rewards/information, and speed) to see how they impacted customers’ emotional connection and retailer financial performance. Price and quality (in that order) were the most important of these pillars for shoppers across the board, accounting for 50 percent of the core of value perception. Price-first retailers were found to have grown twice as fast as quality-first retailers over the past five years, with Aldi and the big dollar chains growing faster than almost any retailer examined. The study refers to the other measured drivers as amplifiers of value perception because they either support the value core or are a means for delivering it. Based on their perceived level of importance, the study ranked them in this order: digital, operations, convenience, speed and discounts/rewards and information. But don’t let the order fool you; while digital and operations both increased in importance from 2017 to 2018, they both stabilized in 2019, and convenience increased in importance from four percent in 2017 to 17 percent in 2019. Since all of these are just supporters of the value core, the report suggests that any issues with the price or/and quality should be addressed before investing too much money in any of the other pillars.
San Antonio, TX-based H-E-B took the top spot in this year’s RPI, knocking the former champ of the previous two years, Trader Joe’s, to second place, and climbing past Amazon (which held on to the number three spot) and Costco (which in last year’s report was second), which dropped to sixth this year. Rounding out the top 10 list are: 4) Market Basket, 5) Wegmans, 7) Aldi, 8) Sam’s Club, 9) Walmart and 10) Publix. Sprouts and ShopRite had a strong showing as well, taking 13th and 14th places respectively.
It’s a very interesting read, particularly with its unique approach of determining the rankings. The complete 60 page report can be downloaded for free at www.info.dunnhumby.com/2020-grocery-rpi.
Further supporting the notion that value is of the utmost importance in grocery stores, Technomic Inc., an industry analyst and consultant, found that retail foodservice purchases were on the rise in 2019. According to the company’s 2019 Retail Foodservice Consumer Trend Report, 66 percent of consumers purchase prepared foods at least three times a month in grocery stores, up from 55 percent in 2017. The study also found that 39 percent of shoppers would increase the frequency of their prepared foods purchase if value was improved. “Regularly scheduled grocery trips drive many prepared foods purchases as consumers appreciate being able to take care of grocery shopping while also having access to a freshly prepared meal or snack,” explains Bret Yonke, manager of consumer insights at Technomic. The report also indicated that 64 percent of prepared foods customers would be somewhat likely to visit a full-service restaurant within a grocery store. Yonke noted, “Moving forward, full-service restaurant and food hall experiences will begin to roll out more frequently which is likely to encourage consumers to consider retail foodservice for a wider variety of occasions.”
Finally, before I sign off, I just want to say congratulations to my friend Al Rivero, who will be retiring from Giant Food after 39 years. Al started out at Giant in 1981 as a part time produce clerk while attending college and, after earning his associate degree, decided to stay on with the retailer. From there he thrived in every role he assumed including assistant produce department manager, assistant store manager, store manager, district director, regional inventory manager, regional produce sales manager, center store sales manager, director of produce merchandising, and culminating with his current position as director of fresh merchandising. He was always putting his best foot forward which resulted in him being recognized as a top department manager, assistant store manager, store manager and sales manager of the year. From what I’m told, he also served as a great mentor to many. Best wishes to you, Al, and your lovely wife Donna on this next chapter in your life. Hopefully you’ll still find time now that you will be retired to give me golfing tips (and as you know, I really need all the help I can get).
Until next month…
Karen can be contacted via email at email@example.com