Posts in shopper behavior

You are now selling sand in the desert…

February 22nd, 2019 Posted by brand marketing, Brand preference, brand strategy, consumer behavior, Consumer insight, e-commerce, Healthy lifestyle, Higher Purpose, shopper behavior, storytelling 0 comments on “You are now selling sand in the desert…”

Navigating the Impact of Infinite Choice

If ever there were a time when sound, informed strategy mattered to the success and outcomes of food, beverage and lifestyle marketing this would be it. Like it or not we’ve entered the era of nearly infinite consumer choices in a media environment of almost countless channels. This requires a new marketing formula.

Thinking at scale today takes on a completely different meaning when consumers are presented with so many options within a click to buy environment. Thus, how should you design for success when you’re ultimately selling sand in the desert? We will answer that question here.

Left to its natural course, food marketing tends to gravitate towards the vanilla middle – an effort to appeal to the broadest possible audience – and in working to address everyone, you end up mattering to no one. When the options are legion this can quickly turn marketing and communication investments into a moonshot without navigation – the hit (or more often miss) driven by luck more than intention.

At various times we’ve written about the importance of putting consumers at the center of strategic planning. Now, we further qualify that statement by saying – in order for a strategic marketing plan to be measurably effective, putting consumers at the center of planning is table stakes. And determining who that consumer is will require even tougher decisions to prune and refocus the definition of the cohort you wish to serve. Why? Because the 80/20 rule is in full force as the vast majority of volume and profit will come from a smaller segment of committed advocates – assuming you’ve planned for relevance to a community of potential believers.

This is the most compelling argument ever for – different

Let’s start with a foundational understanding that the brand must be perceived as special, unique, useful and valuable before there’s any shot at being memorable. No one has the time or mental bandwidth any longer to assess the vast array of options in any given product category. So how do you resolve the reality of inexhaustible choice?

You must start with the intended core user and work backwards. Seth Godin made a cogent observation in his recent book “This is Marketing” when he described the effort behind what may be the most powerful TV commercial ever made – Apple’s “1984” spot for the launch of the Macintosh. The spot aired during the most watched American sports program on earth, the Super Bowl. The majority of viewers would not have understood or probably cared about what Apple was trying to convey in its dark Orwellian mini-movie.

The lesson: it didn’t have to register with everyone to be successful. Godin observed the spot only needed to touch a million savvy creators and early adopters who picked up that Apple was up to something revolutionary. The rest of the viewers didn’t matter, and indeed the rest is history given Apple’s ascent to brand superstardom. Whatever the brand, the audience of committed advocates will always remain relatively small.

It is with the small and devoted cohort where effort and outreach needs to be directed. And those investments should come from a concerted endeavor to push hard at the edges of what’s unique and different in your brand proposition. Here’s the question we often evaluate with clients: how can positioning, audience, product formulation, and the character of the brand, be dialed sufficiently to the right or left so that we’re able to create a new category – one that our client can own?

Who is it for and why?

To dial in your position successfully you then have to know who it’s for and why. It follows if you want to have meaningful relationships with consumers, then imbue your brand with greater meaning. But for whom?

That’s a big question that requires some rigor to answer correctly. Who is going to quickly respond and be drawn like a magnet to your product proposition? Once defined, all eyes and energy must be directed to fully understanding their hopes, dreams, needs and aspirations. Your marketing strategy is then fine-tuned to align with that insight, opening the door for the brand to become an enabler of their wants and needs – in a voice that’s relevant to them – becoming a reflection of their wants and how they’d like the world to perceive their beliefs and priorities.

This is important because purchases now are largely symbolic representations of what people want others to know about what they believe in and think.

The hard truth about marketing

Of note, we’re doing business in an environment overflowing with self-assured claims, assertions and hype. Here’s the difficult pill to swallow: people don’t believe any of it. The counterintuitive basis of effective marketing today is to not look, talk and walk like marketing.

That said, there is a reflexive habit in strategic planning to navel gaze. To focus on the craft of what’s been created, formulated or built. Here at Emergent we totally understand that spirit and where it comes from, after all most brands are justifiably proud of the considerable effort they invest in technology, quality and improvement. But this also sets the table for potential marketing disconnect.

You are not selling a food or beverage

In the same vein as pet food is sold to humans and not to dogs or cats, it isn’t the product that people are buying. What you are actually marketing are feelings, connection, desire, happiness and status. Not stuff, not items, not things in boxes or bags. Not chips or salsa or soup. People are buying a feeling and expression of their status and belief system.

So then, what’s the path to creating a marketing plan with this insight embedded all the way through? It will require all of the hands on the marketing tiller to be empathetic anthropologists of what the biggest brand fans are about.

Here are some areas to focus on strategically:

  • What your audience wants, not what you want to tell them
  • What they believe
  • What they need
  • What they aspire to
  • What story would emotionally resonate with them

The more you invest in seeking to understand, the more likely you are to land on the big idea (one that immediately influences the behavior of the business) and create a voice for the brand that is engaging and is shared. When you seek to improve the lives of your best customers, you earn permission for a relationship with them and the marketing you create comes across less like a transactional maneuver.

If you think this way, it will flow downstream to impact how the business operates. We already know that what the brand does is more powerful than what it says, so there’s an opportunity built into the recipe for authenticity.

Brand trust continues to decline, so the game plan must be to build it, earn it, cultivate it. The reason transparency has ascended to ever higher importance is precisely because people don’t accept anything on face value. Claims and assertions are exactly that. When you verify, validate and reveal the product creation story by letting consumers all the way in, it fosters belief and trust.

10 components of successful marketing  –

  1. You must push for positioning that’s truly unique, different and helps create a new category
  2. Refocus and narrow your audience definition to the smaller community of ardent fans
  3. Devote your insight research to this audience and discover how the brand sits in service of their lifestyle needs
  4. Become an enabler of their wants and desires
  5. Recognize you’re not selling a product but an emotional connection
  6. Activate brand experiences because behaviors speak louder than words
  7. Know that being relevant is more important than being superior
  8. Authentic storytelling to this audience is the path to engagement
  9. Trust is everything…you must earn it
  10. Transparency is the precursor to creating trust

Looking for more food for thought? Subscribe to our blog.

Bob Wheatley is the CEO of Chicago-based Emergent, the healthy living agency. Emergent provides integrated brand strategy, communications and insight solutions to national food, beverage, home and lifestyle companies. Emergent’s unique and proprietary transformation and growth focus helps organizations navigate, engage and leverage consumers’ desire for higher quality, healthier product or service experiences that mirror their desire for higher quality lifestyles. For more information, contact Bob@Emergent-Comm.com and follow on Twitter @BobWheatley.

Home cooked meals

Kitchen Commanders Hold Reign

April 20th, 2018 Posted by brand marketing, Brand preference, brand strategy, consumer behavior, Consumer insight, Culinary inspiration, Culinary lifestyle, grocery e-commerce, shopper behavior 0 comments on “Kitchen Commanders Hold Reign”

Mining the resurgence of scratch cooking

The kitchen is mounting a serious popularity comeback as consumers increasingly opt for meals at home over meals cooked somewhere else. While digital grocery buying is on the rise, the net outcome of what’s purchased, regardless of shopping channel, ends up sooner or later in a sauté pan on a cooktop.

Yes, it’s true in our online, connected world – in five to seven years, and maybe sooner – 70 percent of consumers will be purchasing food and beverage products online. That ladders up to more than $100 billion in transactions by 2022, according to Nielsen Digital Imperatives report.

  • Of note: we’ve already arrived at the end of borders, boundaries and lanes in channel shopping behaviors. Omni-channel shopping is simply a reflection of the increased comfort level with buying fresh and perishable foods online – the last remaining barrier to crumble in favor of e-commerce growth. What lies ahead is the demand for fluid, seamless shopping experiences as needs and preferences move from mobile ordering to in-store exploration, from delivery to squeezing your own tomatoes – all inter-changeably.

Whether brick and mortar food retail is optimally positioned for this reality is unclear. What is crystal clear, however, is a shift in supermarket business models from selling e-commerce friendly boxes, cans and bags off shelves at velocity, to answering preferences for navigating the perimeter fresh grocery departments. This is where consumers increasingly labor to solve real-time meal and menu needs using ingredients they expect to cook. Shop at 5 pm and eat acquired food at 7pm.

Adventures in culinary experience – at home

According to The Hartman Group’s “Transformation of the American Meal” report, seven out of 10 consumers currently eat scratch prepared meals at home. “Americans tend to agree that the best meal – the healthiest, tastiest and most emotionally satisfying is a freshly cooked homemade meal,” reports Hartman.

This makes absolute sense:

  1. Fresh, real foods are seen as healthier and higher quality. These items involve cooking.
  2. People want more control over ingredient quality, preparations and portion sizes; this includes seasoning and sweetening decisions.
  3. The emergence of meal kits also helps simplify the menu decision and the cooking process with partially prepped ingredients.
  4. Popularity of cooking shows and food websites/blogs, reveals the growing fascination with creativity and learning in food preparation and skills development.

Cooking is back with a vengeance. Scratch cooking behaviors will vary in intensity and commitment from heat-to-eat prepared meals to creating an entire menu from whole foods. Somewhere in the popular middle are meal recipes that combine fresh food ingredients with some packaged or pre-made items such as pasta, stocks and baked goods.

However you slice it or dice it, this is a bona-fied banquet of opportunities for food and beverage companies wanting to forge deeper relationships with consumers. How? By helping enable their passions in the kitchen.

While food choices and possibilities are more abundant than ever before, time and energy continue to grow scarce. With time scarcity is the increased need for guidance, ideas and support in various forms that help consumers achieve their culinary passions (if not their day-to-day meal preparation needs) with minimal frustration.

The friction for consumers grows in tandem with increased shopping trip frequency for smaller, meal-focused baskets. People don’t really know what they’re having for dinner, the most considered and mentally taxing meal of the day, before it’s just about time to sit down at the dinner table. What’s emerged is just-in-time food shopping aimed at creating a menu. Food retailers need to solve the meal trip phenomenon with more convenient in-store experiences (grab and go kits). Navigating a 60,000 square foot store for five to seven items will increasingly drive food shoppers online for easier click and collect or shortened delivery windows.

We know that brand building in the consumer-control era begins first with empathy for shopper needs and interests. If a food or beverage brand wants to forge a deeper relationship, it will be founded on becoming more meaningful and valuable. It’s clear the opportunity here is to help solve these recurring ‘what’s for dinner’ challenges.

The cornucopia of food brand marketing solutions:

  • Meal ideas, menus and shopping lists
  • Assistance with recipes, preparation steps and enhancing cooking skills
  • Creating or enabling in-store culinary events and tasting experiences
  • Building social channel communities of like-minded home cooks sharing ideas, experiences, hacks and recipes
  • Creating culinary clubs and educational experiences to inspire new food adventures and experimentation
  • Marrying kitchen tools with the food to enhance reliable, optimal outcomes –especially in baking where precision is essential
  • Considering culinary lifestyle marketing strategies that surround the consumer in their areas of interest and passion from health and wellness to global taste exploration

Message and content creation opportunities here are virtually boundless. The opportunity to be relevant and valuable is compelling. But to be sure, this is one of those moments when brand voice and authenticity will ultimately separate the winners from the posers.

If your organization lacks a fundamental passion for food and culinary experience, it’s doubly hard to bring relevance and proper context to marketing communication. Consumers are amply able to identify the genuine from the artificial.

If your organization breathes the love of food and food experience, it will manifest in the quality of communication that drives brand value and engagement levels. Consumers will reward food brands that align with their needs by opting in to user communities.

It is, indeed, the Golden Era of food marketing.

Looking for more food for thought? Subscribe to our blog.

Bob Wheatley is the CEO of Chicago-based Emergent, the healthy living agency. Emergent provides integrated brand strategy, communications and insight solutions to national food, beverage, home and lifestyle companies.  Emergent’s unique and proprietary transformation and growth focus helps organizations navigate, engage and leverage consumers’ desire for higher quality, healthier product or service experiences that mirror their desire for higher quality lifestyles. For more information, contact Bob@Emergent-Comm.com and follow on Twitter @BobWheatley.

 

 

 

 

 

 

 

Millennials and Meal Kits: Will Dynamic Duo Shine in Supermarkets?

March 15th, 2018 Posted by brand marketing, CMO, Culinary inspiration, Culinary lifestyle, food experiences, food retail strategy, Food service, Food Trend, shopper behavior, Supermarket strategy 0 comments on “Millennials and Meal Kits: Will Dynamic Duo Shine in Supermarkets?”

Retail kit growth could impact restaurant business…

Recently we learned that Walmart is planning to introduce prepared foods and meal kits to their stores nationally. This action is in response to an increased interest among Millennial shoppers for more convenient and higher quality, fresh ingredient meal solutions.

Given Walmart’s massive size, the impact of this move could create more challenges for an already stressed restaurant marketplace and help trigger other supermarket companies to upgrade their own meal kit strategies, compounding the impact. Technomic reports business has slowed for the last two years at the nation’s top 500 restaurants. At casual chains like Olive Garden and Chili’s, growth went from an average 4.7 percent in 2015 to flat in 2017.

Millennial preference for home cooked meals

According to Port Washington, NY-based NPD Group, 83 percent of Millennial consumers report more cooking at home and fewer restaurant visits, while 63 percent of Millennials say they want to cook more.

Concurrently the supermarket business is in the midst of transformation as Millennial shoppers flipped the script, causing a move away from traditional center store packaged foods, to shopping the perimeter departments for fresh, real food options. The fresh trend is seen as evidence of their preference for home prepared meals. Thus, also helping explain why legacy “big food” brands have seen their market shares decline in key packaged food categories over the last 10 years.

  • At the core of this behavior is a central theme: virtually all generation cohorts – from Boomers to Gen Z – have connected the dots between higher quality, real food experiences and desire for a healthier lifestyle.

The interest in cooking at home is an outgrowth of efforts to assert greater control over ingredient quality, preparations and portion sizes along with the ability to better manage household food spending. At Emergent we see another explanation: the consumer’s love affair with food and culinary inspiration continues. The desire to exercise that creative calling in the kitchen is strong as it fulfills the number one driver for food purchase and consumption: healthy lifestyle. Consumers tacitly believe that home cooked food is healthier.

Boxed food adventures

Perhaps one of the most important, embedded features of meal kits is the ability to experiment with new cuisines and flavors at low risk and with ingredients already portioned and in some cases prepped.

When dinner is now often decided at 5 pm the day of consumption, kits are an enticing just-in–time option to solve the meal need, without having to shop a 50,000 square foot store for five to seven items. It’s a form of high quality culinary convenience that meal kit companies like Albertson’s Plated brand often deliver with a backstory and ethos sitting underneath.

Millennials passed Boomers in 2016 to become the largest domestic audience of shoppers, numbering some 75.4 million topping the Boomer generation’s previous lead of 74.9 million mouths. This generation has grown up with global cuisine; the rise of specialty food markets, locally-sourced ingredients, unique restaurant concepts, and even chef-driven bar food.

It’s telling to note that fully 24 percent of the entire Millennial cohort shopped Whole Foods last year even though the chain has only 430 stores – a remarkable statement about their interest in higher quality food options.

As e-commerce gobbles up more transactions for pantry stock-ups, the food retail business will depend increasingly on its ability to curate unique food experiences and fresh ingredient solutions – and that plays right into the hands of grab-and-go kits. What’s not to like, as kits deliver:

  • Curated don’t-have-to-think-about-it menus
  • More convenient scratch cooking solutions
  • Wholesome, higher quality ingredients
  • Easier and quicker prep time
  • Experimentation vehicle for new cuisines, new techniques and personal customization

Food-enthusiastic supermarket?

The meal kit business is symptomatic of larger changes looming ahead in food retail as e-commerce disintermediates the packaged foods category. As a result, supermarkets will be forced to redefine their models once built around selling those packaged products at volume to fuel the balance sheet.

Emergent believes the future of food retail lies in mining culinary inspiration and food experience. Creating the Disneyland effect of “magic” around food adventure and the consumer’s interests in more innovative and interesting food solutions.

Can the food enthusiastic grocery be far behind? The growth of groceraunt concepts will continue to gain ground as food retailers look to leverage their expanding commissary investments for meals to be consumed on site – yet another customer relationship building opportunity! We anticipate more supermarket jobs for classically-trained chefs as a result.

What’s next for foodservice?

Restaurants are entering a new era of innovation competition to more rapidly evolve menu boards and offerings that reflect the cutting edge shifts in tastes, new ingredients and food culture. Restaurants have always been the tip of the spear in new food trends that then trickle down into other channels in the food industry.

Now more than ever the call to action gains momentum for restaurant companies to explore tastes, preparations and ideas to stay ahead as supermarkets improve their fresh food quality, ingredient standards and Deli menus.

It seems to us that restaurant companies also need to explore further the equity in their own brands to potentially create new signature food products that compete in other channels – much as Dunkin Donuts has done with their superb coffee line and Panera with their soups.

  • Millennials’ enthusiasm for food and healthy lifestyle will continue to push grocers to earn their business by providing the quality, selection, and preparation options they want. Restaurants, while innovating on flavor and cuisine, may need to consider expanded channels as enhanced, food-enthusiastic food retailers vie for share of meal occasions.

This may be the most exciting time ever to be in the food business!

Looking for more food for thought? Subscribe to our blog.

Bob Wheatley is the CEO of Chicago-based Emergent, the healthy living agency. Emergent provides integrated brand strategy, communications and insight solutions to national food, beverage, home and lifestyle companies.  Emergent’s unique and proprietary transformation and growth focus helps organizations navigate, engage and leverage consumers’ desire for higher quality, healthier product or service experiences that mirror their desire for higher quality lifestyles. For more information, contact Bob@Emergent-Comm.com and follow on Twitter @BobWheatley.

 

 

 

 

 

Cheese is cheese is cheese

Cheese is cheese is cheese, or is it?

October 24th, 2017 Posted by brand marketing, brand strategy, Culinary inspiration, food experiences, food retail strategy, Insight, shopper behavior, storytelling 0 comments on “Cheese is cheese is cheese, or is it?”

Inspiring craft of the world’s longest standing savory solution

For whatever reason, the powers that be decided years ago that a portion of Emergent’s client pedigree would include helping grow and develop cheese brands. Our culinary roots and passions have surfaced time and again to help guide products that – on one level, look to be a commodity and on another, is anything but.

Today, cheese sits in the same refrigerated dairy foods segment alongside yogurt and butter, as the second most frequently purchased category at food retail.

  • Yet when planning in commodity food categories, how do you find the path to uniqueness, separation and own-able distinctions? Brands are doing business today in an environment where direct assertions of “better than brand B or C” or self-declarations of superior quality simply won’t work.

Meanwhile, cheese consumption has increased; and people love the rich, savory and varied flavor profiles cheese delivers more than ever. In fact, it is this creation complexity and nuance that makes cheese making such an inspiring process to observe – where seeing and tasting is believing – and differentiation is borne, in part, through experiencing the ingredient and craftsmanship stories.

Consumers care more than ever about the backstory on products and brands they’re interested in. The tale surrounding cheese making and the influence of terroir, dairy management, milk quality, craftsmanship and creativity exercised by experienced cheese makers. The cheese making backstory offers a rich tapestry of narratives on product creation and authenticity.

We created a “cheese immersion experience” for a topflight group of food writers on behalf of Schuman Cheese at their creamery in Turtle Lake, Wisconsin. The mostly New York-based media visited cows at the dairy and saw up close time-honored cheese making practices and innovation steps. The look of astonishment on the faces of these writers was only equaled by the consistent comments of “I never knew how complex it is to produce higher quality cheese,” and “people just don’t understand what goes into that wheel of Parmesan.”

That consensus among the writers and their inspired stories were an outcome of quality time with, and passionate storytelling by, Schuman’s lead cheese maker, Christophe Megevand and fourth generation family member, Allison Schuman. A story, which if left untold, could have easily relegated a great brand into a commodity position.

Commodity category? Not if you’re willing to challenge conventions.

For a very long time, the leading market share in dairy aisle cheese has been held by price driven store brands, implying by definition that cheese is cheese is cheese. We worked with a leading brand in this ‘high velocity’ part of the store, Sargento Cheese, to help them overcome the impact of commoditization on their business prospects.

Working in partnership with the Sargento executive team, we started to disrupt category conventions; first, through redefining the category typical ‘all-things-to-all-people’ consumer audience. We collaborated on segmentation research that narrowed the focus to a food savvy shopper we called Food Adventurers. This is a heavy user persona passionately involved with food experience, cooking, and concern about the quality of the ingredients they use. Further, we built a premiumization platform that engaged highly respected artisan cheese makers for new product innovation. This new strategic approach informed a full reset covering brand positioning, packaging, unique products and communications.

Our new, reenergized strategy for marketing focused on a consumer who is naturally interested in cheese quality and responded positively to the brand’s close alignment with their passions and priorities around the kitchen and table. We built new digital channels of communication, created content with celebrity chef influencers; sponsored culinary events that further restaged perceptions of the brand; and constructed a significant new profit story told to the trade.

The outcome was a dramatic performance lift and led to share gains over rival Kraft.

New era for cheese is now developing

Things have changed lately as consumers flock to the perimeter of the grocery store in search of higher quality, more authentic food experiences. The supermarket Deli is home to solutions for culinary inspiration (recipes), entertaining experiences and higher-quality snacking.

As retailers respond to consumer interest in better and more varied flavor experiences, the Deli cheese case, like the wine department, increasingly offers a treasure of variety. But as you survey the cheese case, the blur of similar looking wedges and blocks suggests commodity conditions reign even here.

  • So, the strategic push for differentiation and own-able distinctions are a challenge we relish as marketing thinkers and creators.

In the previous mass media era, food brands could be established and built with a good, memorable jingle or tagline flourish. The world has indeed changed as people step further towards demonstrable evidence of quality commitments and know-how that transcend the conventions of hype-over-help communication.

Now, truth and validation become the precursors to building consumer trust, the essential ingredient in any brand/consumer relationship. Fortunately, new media such as social channels and digital video help facilitate the transition to help-over-hype.

Commodity is a real thing for any agricultural product category but only becomes calcifying if you let sameness invade the context in how brands are presented. The stories of family involvement, craftsmanship, mission and ingredient integrity can create emotional moments of belief.

Emergent has a track record of creatively and strategically mining differentiation and value in commodity businesses. Building a narrative that sits underneath product creation and the team leaders who help inspire differences and bring them to life is part of an eco-system of solutions that offer a sense of true distinction.

Looking for more food for thought? Subscribe to our blog.

Bob Wheatley is the CEO of Chicago-based Emergent, the healthy living agency. Emergent provides integrated brand strategy, communications and insight solutions to national food, beverage, home and lifestyle companies.  Emergent’s unique and proprietary transformation and growth focus helps organizations navigate, engage and leverage consumers’ desire for higher quality, healthier product or service experiences that mirror their desire for higher quality lifestyles. For more information, contact Bob@Emergent-Comm.com and follow on Twitter @BobWheatley.

Farm to table dinner

10 Food Shopper Trends We’re Watching

August 21st, 2017 Posted by consumer behavior, Food Trend, Healthy Living, Insight, Navigation, Retail brand building, shopper behavior, shopper experience 0 comments on “10 Food Shopper Trends We’re Watching”

Fresh is the final frontier…

We believe that consumer insight should inform strategy. So we place a great premium around here on monitoring behaviors and cultural trends in the food business.  Even more so now that food retail is at a crossroads with e-commerce accelerating rapidly to compete for more shopping occasions.

Emergent recently examined a series of reports from the Food Marketing Institute and research company The Hartman Group, profiling shopping trends in the grocery retail business.

We’ve identified 10 developments worth watching as the food retail business continues to transform amid the growth of consumer preference for higher quality, more authentic and real-food products.

1. Of millennials, 43 percent are now shopping online for groceries at least occasionally, up from 28 percent in 2016 – a 15-point climb in one year!

2. Most of this growth is coming from households that shop online routinely, and thus are already comfortable with e-commerce transactions.

3. Important to note millennials are more likely, however, to buy packaged products online rather than fresh and perishable items.

4. Gen-Xers with kids are more likely than other cohorts to actively use grocery store apps.

5. Millennials with kids are more likely to participate in grocery store social networks.

6. Millennials are more concerned about CPG and retailer:

Honesty

Openness about animal welfare

Ingredient sourcing

Social responsibility

They are apt to make judgments on the basis of ethics and sustainability practices.

7. Twenty-three percent of grocery shoppers claim to avoid GMOs, mostly for health related reasons, ‘naturalness’ and a desire to know exactly what’s in a product.

8. Top three reasons consumers prefer locally sourced products:

Fresher –                               72 percent

Support local economy –   65 percent

Better taste –                        54 percent

9. Seventy-six percent of grocery shoppers think a home-cooked meal is healthier than out of home meal options.

10. Households with kids have the highest adoption rates for retailer prepared meal solutions; two out of three households purchase them at least occasionally.

Most impressive is the speed of change we’re observing in the food marketplace, and the need for retailers especially to work smarter. This is done by embedding uniqueness and differentiation in their banner brands, and creating immersive experiences for shoppers in both online and bricks and mortar environments.

For retailers and CPGs still vying for transactions, it’s critical to realize that consumers have changed the rules. Those brands and banners that embrace connecting to shoppers in ways they find more helpful and meaningful will earn the business and their loyalty.

More specifically, the path to consumer engagement is shifting and healthy lifestyle is driving this transformation. Emergent is a specialist in leveraging this insight to grow food businesses. We bring the latest insights and innovative strategies to help food businesses navigate the new consumer landscape.

Looking for more food for thought? Subscribe to our blog.

Bob Wheatley is the CEO of Chicago-based Emergent, the healthy living agency. Emergent provides integrated brand strategy, communications and insight solutions to emerging and established food, beverage, home and lifestyle companies.  Emergent’s unique and proprietary transformation and growth focus helps organizations navigate, engage and leverage consumers’ desire for higher quality, healthier product or service experiences that mirror their desire for higher quality lifestyles. For more information, contact Bob@Emergent-Comm.com and follow on Twitter @BobWheatley.

food spells out food

The Future of Food and Food Retail Now Shifts Course

July 18th, 2017 Posted by Food Trend, Retail brand building, retail brand relevance, shopper behavior, shopper experience, Supermarket strategy 0 comments on “The Future of Food and Food Retail Now Shifts Course”

Emergent’s guidance on what comes next

The recent Amazon/Whole Foods acquisition has ignited a firestorm of analysis and assessment concerning the impacts and implications. Some of the conversation has reached far and wide – from the future of supermarkets to outcomes for large CPG food brands and foodservice businesses.

Here we help summarize how the food industry changes could manifest, as well as guidance on what comes next.

Implications of the Amazon/Whole Foods acquisition

Grocery leadership is rapidly becoming a two horse race between Walmart and Amazon, creating a new class of retail that blends online and physical store strategies. The ‘new last mile’ competition now moves to address the single biggest barrier to grocery e-commerce growth: fresh/perishable sales. Many consumers lack trust in online platforms to select and safely transport produce and proteins to their standards and freshness expectations.

Change in strategy for supermarket companies

The future of supermarket companies shifts more towards ‘specialty retailer’ strategies focused on improved, curated grocery and perimeter businesses. Higher quality, unique products, local sourcing, improved Deli menus, Grocerant businesses, and heavier investment to in-store experience become the retail differentiator. The goal here is to leverage a physical advantage of tactile, higher quality food and culinary experience. E-commerce will be mission critical – that said, not likely anyone will catch up now to Walmart and Amazon. Costco maybe.

Hard discount takes price leadership, elevates private brand strategy

Entry of Lidl, and Aldi growth investment will put pressure on pricing at all levels. Large cap CPG may take the brunt of this as their core categories continue to see challenges in the face of cultural shifts to preference for new, innovative and higher quality, artisanal brands and fresh versions of packaged items. This could force more M&A activity to satisfy Wall Street and engage balance sheet efforts to reduce operating costs.

Emergence of super-premium private brand investments

Retailers, increasingly on the hunt for innovation and better margin businesses, will up their game by putting more investment in their private brand programs – potentially surpassing legacy CPG brands on quality and uniqueness. Amazon will bring 365 to their Fresh platform. This, in turn, puts more pricing pressure on large CPG.

Implications to casual restaurant chain business

Roughly half of casual dining restaurant chain sales are sourced from family occasions – and families have hastened the declining use of casual dining outlets, moving instead toward at-home meals. Primary reasons for the move back home are health (e.g., quality ingredients), preparation control and cost. The Amazon-Whole Foods combination could make at home/healthy meals easier and less expensive in ways that compete with supermarkets and restaurants. It’s possible that Amazon could become a top-10 restaurant chain (near the $5 billion in system sales of Panera Bread). By creating faster market share gains in perimeter categories, Amazon and Whole Foods will quicken the ongoing center-store rationalization.

Battle is on for hearts and minds of Millennials

Sixty percent of Millennials are Amazon buyers (source: NPD Group). Twenty percent of American consumers bought at least one item from Whole Foods last year, however among Millennials, the number is substantially higher: 24 percent. This is extraordinary penetration for a supermarket chain with just 431 stores. The proposed deal gives Amazon control of those stores – nearly all of them are in neighborhoods that are more affluent and younger than America as a whole.

Emergent’s guidance on what’s next:

1. Unique and differentiated brands are now more vital than ever as competitive leverage for supermarkets. Brands that play to consumer sensibilities around higher quality ingredients, craftsmanship and visibility to creation stories, and mission (Higher Purpose) will be key to retail channel.

2. Deli marketing and merchandising programs become more critical to supermarket growth as center store rationalization picks up pace; a conundrum for food retail as this is traditionally where the profit often sits. Pricing pressures on large cap CPG will likely come from several fronts. More legacy brand declines could be on the way, amping the need for faster innovation.

3. A newly charged renaissance in home cooking will create more opportunities for brand growth as consumers look for ideas and inspiration to fuel their eat-at-home aspirations. Creative programming to leverage this condition is key. Emergent has developed a variety of content creation strategies to leverage this opportunity, which can be repurposed for retailer use on their own social channels.

4. Further erosion of the casual dining segment is likely to continue due to competition from supermarkets and Amazon/Walmart for prepared foods, kits and fresh food solutions for at-home meals. For multi-channel companies this condition might recommend greater investment now in retail channel development and brand marketing investments.

5. The emergence of new brands in center store and perimeter categories will create challenges for retailers. This is due to absence of scaled promotion budgets and higher product input costs contributing to higher prices on lower overall volume businesses. Retailers will need more sophisticated marketing and merchandising solutions to help nurture and grow these higher quality, boutique brands. The same holds true for CPG companies that invest and acquire these new, emerging brands that require a different formula to build scale. Emergent has designed a new Emerging Brand Marketers’ Playbook for this purpose.

6. Consumers are omni-channel shoppers. The move online will accelerate and reach a tipping point in the next two years. Fresh is the battleground. Brands need to be collaborative partners with food retail as e-commerce strategies gain traction and the need to address trust issues with fresh/perishable item shopping is key to growth. Emergent can help optimize omni-channel strategies.

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Bob Wheatley is the CEO of Chicago-based Emergent, the healthy living agency. Emergent provides integrated brand strategy, communications and insight solutions to national food, beverage, home and lifestyle companies.  Emergent’s unique and proprietary transformation and growth focus helps organizations navigate, engage and leverage consumers’ desire for higher quality, healthier product or service experiences that mirror their desire for higher quality lifestyles. For more information, contact Bob@Emergent-Comm.com and follow on Twitter @BobWheatley.

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