August 2011

It's the economy, stupid!

When James Carville first gave that advice to his friend who was campaigning to become president of this country, little did he know that mantra would be one that would be repeated for decades to come.

After this past week's stock market plunge, those grim reaper financial pundits hit the airwaves to revise their forecasts for growth, profits and jobs. Overall reaffirming what many of us already felt - that this economy just is not getting better as quickly as anyone hoped.

And that means that shoppers are shopping less, choosing their foods more carefully and comparing prices down to the penny. Which means that with rising food prices and operational costs, supermarkets will once again be the target for reducing prices. But this time the question we must ask is, "Can prices can go any lower?" In many categories the straight answer is just no!

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Allergy Advocate

Meet Alex Simko, an allergy advocate who has had enough. Imagine having to sit all alone in the school cafeteria because of food allergies?

More and more schools are trying to force kids with allergies to sit alone at allergy-free tables in the lunchroom. Severely allergic to peanuts and tree nuts, and as a child, also allergic to beef, corn and eggs, Alex was forced to sit alone. But she didn't let her food allergies get in the way of her self-confidence, and instead took her experiences to another level. She testifies in state assembly, meets with national legislators and is on a mission to help kids with food allergies.

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Stellar tea prospects ahead

Through nearly five centuries, tea has developed a lore, art, sensory appeal and ceremony unmatched by other beverages. In a sea of supermarket products, tea is a rare item that can provide a soothing respite from the day's pressures. So what is the American imprint on tea? Simply, ice.

According to the World Tea Expo, 80% of tea consumed in the U.S. is in the form of an iced drink. Often an on-the-go thirst quencher rather than a spiritual refresher in the U.S., tea is the second most consumed beverage in the world after water, says the U.S. Department of Agriculture's Agricultural Research Service.

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Many ways to accept payments

Don't make people wait to pay. This cardinal rule drives food retailers to seek new approaches that could improve speed, shopper comfort and front-end performance.

These approaches include self-checkouts, more staffed lanes at peak times, a single line at the front-end, tunnel scanning, electronic coupon verifiers - and perhaps in the future RFID. But The Lempert Report thinks payments by mobile phone could soon become a common option.
The ubiquity of cell phones and the rapid growth of smartphones suggest the convenience of mobile checkout would drive popularity, as long as privacy and security issues could be tamed. Swipe pay is a differentiator for gasoline stations; it could do the same for food stores. And if this behavior grows before the 2014 target date for widespread GS1 Databar implementation, retailers could potentially save on costly capital investments.

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Breakfast cereals slow in supermarkets

Breakfast may be the king of meals nutritionally, but it isn't behaviorally. The latest research shows 54% of U.S. adults want to eat breakfast every day, but only 34% do. While 89% of U.S. moms want their children to start each day with breakfast, 40% say this doesn't happen. And as children grow up, fewer eat breakfast each day: 77% of toddlers and pre-schoolers eat the meal each morning, but just 50% of middle-schoolers and 36% of high-schoolers do so, according to a Kellogg Company consumer study released in June.

In the time crunch vs. breakfast conflict, the meal often loses out. Nevertheless, cereal penetrates 95.0% of U.S. households, led by the 92.1% presence of ready-to-eat cereal, according to Nielsen Homescan Consumer Facts data for the 52 weeks ended December 25, 2010. Hot cereal is the second most widespread at 62.1%, trailed by granola/natural (16.6%), hominy grits (12.9%) and wheat germ (1.7%).

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Americans Spend Less on Food

Just how much do Americans spend on their foods, as a percent of personal income? Food prices have been rising for months and will most likely continue to do so; how are consumers coping We've seen extreme couponing, changing buying habits, and even people cutting portion sizes - but do you know how the U.S. compares to others around the globe?

According to the United Nations, food prices will soar by as much as 30 percent over the next 10 years due to an increase in global demand, economic depression, fuel costs, weather including floods, droughts, and other extreme weather conditions.

In 1933, Americans spent 21.9 percent of their income on their food at home. Today, according to the United States Department of Agriculture, we spend just 5.7 percent on food eaten at home.

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Supermarket quandary: smaller trips, more planning | Retail food prices seen rising again in '12

The supermarket quandary, and the Food Institute reports prices rising for 2012, for today - Monday August 8, 2011. Exchanging unexpected pieces of knowledge.

  • Shoppers go to food stores with fewer, specific missions and smaller baskets in mind. Among them: one in three buy for a specific meal or recipe, one in five seek groceries instead of fast food, one in 10 shop because they're hungry. As a result, half of grocery shoppers carried out fewer than 15 items worth less than $50 on their latest trips, according to Food Shopper Insights: Grocery Shopping Patterns in the U.S.
  • For 2012, food inflation is expected to abate from 2011 levels but remain slightly above the long term historical average of the past two decades according to the first 2012 projection by USDA's ECONOMIC RESEARCH SERVICE and reported by The Food Institute.

Click here or on the screenshot to watch this video.

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Bacon, a mainstay, suffers from cost pressures

Americans think sizzling bacon is a great way to start the morning. If that's not enough, there's the classic BLT sandwich for later in the day, bacon seasoning for salads, bacon bits for baked potatoes, and even bacon chocolate as a gourmet treat.

But will households continue to buy bacon at a $6 per pound everyday price - which analysts say it could easily reach if pork bellies surpass the $150 per hundredweight (100-pound) level attained last August. Hog farmers cut back their herds due to high feed costs, and the price of pork bellies already shot past the $130 level this spring, CNBC reported.

While the prices of many corn-dependent foods have risen in 2011, an absence of bacon on family tables would be an emotional touchpoint. This is a nation, after all, that gave a military funeral to King Neptune, a 700-pound pig, which was integral to World War II fundraising efforts, according to National Public Radio. And bacon is a heavily consumed, versatile and flavorful food.

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Drive-thru fast food in supermarkets?

Nearly half of the fast foods children ate in 2006 (the last year of ten years of research newly released by the University of North Carolina) were eaten at home, and this trend adds to the nation's obesity challenge. Calories from fast food accounted for more of their intake than school food, noted a USA Today account.

As long as children are eating the fast food, and presumably many parents are driving to buy it, The Lempert Report feels supermarkets could benefit by meeting this demand with drive-thru windows. As stores figure out the operations, they would likely include prepared meals from the deli that kids like. They could offer some varieties with healthier twists like whole-grain breads, sweet potatoes, low-sugar peanut butters or lower-fat cheeses.

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Store brand fever cools a few degrees

Food price hikes in 2011 resemble the volatile 2008-2009 period, when U.S. households turned sharply to private label to save money and store brand share rose. Although the economy continues to pressure household budgets, PL dollar share growth has slowed since then and PL unit share has declined, according to figures released in the SymphonyIRI Group Times and Trends report of May 2011.

Name brands were caught off guard a couple of years ago, but have innovated, grown more sustainable or repositioned as value choices in order to differentiate and keep store brand competitors at bay. For these reasons, F3 believes PL won't surge as dramatically amid current CPG price hikes.

Store brand fever has abated slightly, according to an Ipsos Marketing survey of consumers in 21 countries, including the United States, conducted in December 2010 vs. a similar period a year earlier. In nearly every nation polled, PL ratings declined on many measures - being high quality, trustworthy, environmentally friendly, unique and innovative. Taste and packaging appeal were also down.

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Vegetarian Diet Benefits

Vegetarian diets can be recommended for successful weight management without compromising diet quality, according to a recent study from Eastern Michigan University and published in The Journal of the American Dietetic Association. The study found that vegetarian diets are nutrient dense, consistent with dietary guidelines, and high in fiber and a large variety of other vitamins and minerals.

Researchers looked at a cross-sectional analysis of National Health and Nutrition Examination Survey (1999-2004) dietary and anthropometric data, focusing on participants aged 19 and older. All vegetarians were compared to all nonvegetarians. They found that mean intakes of fiber, vitamins A, C and E, thiamin, riboflavin, folate, calcium, magnesium, and iron were all higher for vegetarians than for all nonvegetarians.

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