Thursday, October 7, 2010
6-Pack: Trends Influencing Grocery Shoppers
VALUE, PRIVATE LABEL AND ‘HOME COOKING’
The August Dairy-Deli-Bake Digest newsletter from the International Dairy, Deli, Bakery Association (IDDBA) includes information from California Grocer magazine that identifies six trends this year that are changing the grocery shopping environment:
1. Value is King: Private label will gain market share at branded products expense. Consumer will continue to increase their shopping occasions with discounters. Promotions and hot deals will drive traffic to those stores (via the discounter’s low pricing format).
2. Ad Spending Improves and Goes Digital: Brands will be forced to increase their ad and consumer promotion spending to drive sales volume and add value. Consumer advertising budgets will be up 15-25% on average with increased emphasis on internet and social media spending.
3. Health Drives the Consumer: Consumers are buying more healthful products (increased fibers, reduced sugar/salt, improved nutrition). Consumers will renew their love affair with natural and organic products.
4. Pricing Remains Stable: Commodity prices should not be a problem. Pricing will be stable and somewhat boring compared to previous price swings.
5. Mergers and Competition Intensify: Look for increased consolidation and acquisitions. There will be heavy activity for smaller private food manufacturers with strong sales in branded or private label manufacturing.
6. Home Cooking But Not Really: Consumers will continue with focus on home over restaurants for family food consumption. Consumers want to eat at home but they really don’t want to cook, just have it look like it. Restaurant activity will pick up but only if the economy improves to include job creation. Should be a good environment for branded and private label food manufacturers. Food retailers will have it a little tougher with a greater amount of pressure on margins.
TFFG Says: Some really good stuff here. Although “health drives the consumer” and “not cooking at home” are pretty much at odds with each other. It’s more a case of “lots of emphasis on words on the packaging like ‘healthy’ and ‘health benefits’ will attract shoppers.” I’m not sure shoppers with one hand pushing a grocery cart and another reaching for the products on the shelves are really going to have the time or inclination to deal with a hand-held device. It’s challenging enough for most shoppers just to deal with a paper grocery list (making, keeping, finding as in not losing it before getting to the store) which can be pretty much kept in hand while pushing the cart and holding and handling the products.