March 2012
Chocolate Can Be a Superfood, But Read the Fine Print
Scanning the covers of magazines and books it appears that one of the most powerful keywords to prompt purchase of these publications is "superfoods." A quick search on Amazon alone brings up over 450 book titles that include the term.
Superfood is not a term recognized (or defined) by the USDA and in nutrition and medical circles is quite controversial. The term is typically used to describe a food that has a higher than average concentration of a nutrient (or multiple nutrients) that has a proven health benefit.
So what does this have to do with chocolate?
Meat: price takes the biggest slice
America’s future with meat may look nothing like its past, if current trends continue. The U.S. Department of Agriculture predicts we will eat 12.2% less meat and poultry in 2012 than in 2007. Beef consumption has declined for the past two decades, and chicken and pork for the past five years – even though high chicken supplies have led to lower prices than a year ago.
What’s behind the meat-buying stall? Is it the expense, concerns about food safety, inhumane treatment of animals, the presence of slime in ground beef, or a general notion that eating healthier means more varied protein sources such as seafood and plants?
Turtle race for wellness
It is frustrating how slowly retailers are building wellness platforms – particularly since the public aim to eat healthier and prevent illness is well documented, and stores could readily fill this need with the right foods and convenient health care services.
Is it ironic that newly built supermarkets typically have pharmacies – though their presence is barely an influence on where consumers decide to do their primary food shopping, according to the 2012 SupermarketGuru Consumer Survey Report? Or do supermarkets simply need to leverage the benefits of pharmacy better?
Supermarkets have another way to burnish their wellness image – by making dietitians and nutritionists more prominent on their websites, on store tours, in direct mail, on social media, and even on in-store television. This would leverage their core strength of food and food knowledge, and appeal to younger households that may not feel the same ongoing need for pharmacy as Boomers and seniors do.
Dollar stores open wide for food sales
Supermarkets that don’t yet focus on dollar stores and the trip threats they pose, absolutely should. They’ve proliferated in the down economy. As their convenience grows, they’ll likely capture more fill-in food and beverage sales.
The top four dollar chains in the United States (Dollar General, Family Dollar, Dollar Tree and 99¢ Only) already have more stores than the nation’s major drug chains (Walgreens, CVS and Rite Aid) by a 21,500 to 19,700 margin, according to Colliers International, the global real estate services firm, in its white paper Dollar Days: How Dollar Stores Are Growing in a Weak Economy.
More meal roles for c-stores
As Walmart Express, drug chains and Tesco Fresh & Easy types of stores amp up their food presentations in small formats, let’s remember that convenience stores were there first.
Maybe they didn’t always offer the most inviting formulas for female shoppers, or competitive prices, or broad assortments to meet multiple needs. But they have been and they remain the kings of quick in-and-out shopping to provide for immediate consumption. They have the accessible locations, the name recognition – and most recently improvements in fresh and prepared foods – to fill destination roles for meals, not just snacks.
Top promoted brands show value
Retailers and CPG brands need to show value despite rising food prices today. Shoppers decide where to shop each week largely by the trade promotion events they review when planning their trips. In store, even upscale operators such as Fairway Market aim to build baskets by displaying large triangular “Shock Price” floor signs near fresh sushi and limited other items to draw interest from 100 or more feet away.
Because of the stingy sales environment, many of the nation’s top food and beverage brand marketers raised their retail ad circular support by double-digit percentages in 2011, revealed an ECRM analysis of the 119 largest U.S. and Canadian retailers.
A generation delayed but not denied
Millennials have a hard time finding a silver lining in this economy, with so many of them highly educated, carrying high debt for their degrees, and unemployed or underemployed. Millions have boomeranged home to live with mom and dad because it’s the only place they can afford.
Meanwhile, more attempt to retrofit their backgrounds toward new career directions, with college and university doors swung open to welcome them and their tuition dollars. The New York Times reports it is mostly women in this age group who’ve repopulated lecture halls rather than young men who tend to accept their “breadwinner roles” and limited job options today: “In the last two years, the number of women ages 18 to 24 in school rose by 130,000, compared with a 53,000 for young men.”
Consumers move two ways after an unsettled 2011
Tallying up the winners and losers of 2011, it seems fair to say the past year was a positive for drug, club and dollar stores and a negative for supermarkets and Walmart, both of which lost dollar share.
The year was also a plus for store brands as an alternative to help shoppers save. SymphonyIRI Group projects they’ll continue to account for 22%-23% of unit sales and 18%-20% of dollar sales in 2012, as retailers widen assortments and keep effective tiered strategies in place.
Also, beleaguered consumers belong on the down side, since they continue to buy by price first in order to feed their families while coping with rising food costs, unemployment and underemployment, low housing values, depleted nest eggs, high anxiety and more.
USDA’s Agricultural Projection Through 2021
U.S. retail food prices rose faster than the general inflation rate in 2011 and are projected to do so again in 2012, says the USDA in their recently released USDA Agricultural Projections to 2021. These baseline projections offer a glimpse into what is likely to happen to the prices we pay at the supermarket.
According to the USDA, prices for major crops are projected to decline in the short term as global production responds to recent high prices. However, long term growth is more favorable, thanks to a growing global demand for agricultural products, including the continued U.S. ethanol demand for corn and the EU biodiesel demand for vegetable oils.
