May 2012
Latino insights key to vast growth market
The buying power of Latino consumers in the United States is forecast to reach $1.5 trillion in 2015, up from $1 trillion in 2010. One of the biggest reasons is a relatively fast rate of population growth. Between 2000 and 2011, Hispanics accounted for 50% of U.S. population growth—14.7 million vs. 14.5 million among non-Hispanics. But between 2011 and 2016, Hispanics will comprise 60% of growth—7.4 million vs. 5.0 million.
These insights are in a new Nielsen report, State of the Hispanic Consumer: The Hispanic Market Imperative, which explores multiple aspects of this population. In particular, food retailers could more effectively serve this growth market if they understand the sustainability of Hispanic culture. Nielsen says, “Hispanic culture may evolve but will not go away.” It points to borderless social networking, the unprecedented exchange of goods, the use of technology as a facilitator of cultural exchange, retro acculturation and new culture generation as reasons why.
Melting pot for a world of tastes
Several diversity trends point to higher demand for ethnic foods in supermarkets. To win over American consumers, these ethnic foods will need to be authentic rather than pale domestic versions that merely hint at the palatable pleasures of international cuisines.
Different influences emerge in these trends. One reconfigures households and the foods eaten in them. Others make the nation more familiar with an array of ethnic foods, either through growth of certain population segments or the serving of foods from around the world in school cafeterias and college dining halls. F3 says they all point to the need for supermarkets to ramp up their authority in international foods and dietary practices. They include:
Passion the key to cause marketing
If it seems retailers and CPG manufacturers are cause marketing more, there are reasons why. Companies sense that coming out of the recession, many consumers are more sensitive to the needs of others. And if they raise prices because their commodity costs are higher, they still want end-users to feel that companies continue to do the right thing. They seek emotional connections to help achieve this.
This is a touchy issue for most American adults, shows the Supermarket Guru-National Grocers Association 2012 Consumer Survey Report. We asked if they’d be likelier to shop in a supermarket that supports causes—33.1% said no, 13.4% said yes, and 53.5% said it depends on the causes the store supports and whether prices appear to be inflated in order to deliver that support.
Are organic food PL prices opportunistic?
The wave of organic food and beverage popularity enables supermarket chains to capitalize on private label opportunities within the sector.
Organic food and nonfood dollar sales jumped 9.5% in 2011 to $31.5 billion, reported the 2012 Organic Industry Survey by the Organic Trade Association. Of that figure, food and beverage sales were up 9.4% to $29.22 billion—a growth pace twice the 4.7% sales rise of conventionally produced items. Organic food sales now account for 4.2% of all U.S. food sales, up from 4.0% in 2010.
The self-limiting nature of organic food production (costly processes, limited land) will keep organic food prices high, especially as demand increases, in our estimation at The Lempert Report. Therefore, organics will remain largely unaffordable to the average consumer.
Finding the right match with fast feeders
Supermarkets that want to offer quick prepared foods with sit-down convenience might prefer that branded fast-feeders run a branch on the selling floor. After all, this brings co-branding appeals, incremental revenue and an ability to help shoppers pause, regroup and extend their trips.
Yet as Americans aim to eat healthier, and supermarkets assort, merchandise and otherwise invest in this shift, The Lempert Report urges retailers to rethink whether their partner fast-food brand supports or detracts from what the supermarket marquee brand stands for. Does it project enough of a healthful image, which is becoming more important to stores today?
A Veggie Shift in Prepared Foods
With more and more consumers turning towards a less meat-centric diet, approximately 30 to 40 percent of the US population, should prepared foods shift in their offerings?
While the vegan (about 1 million) and vegetarian (about 7 million) populations still only account for just under five percent of the US population (a number that has seen huge growth in the past 2-3 years), their choices and desires when eating out may help direct the industry.
So what exactly is this population eating when they choose to eschew the animal products - will it be a soy burger or a lentil salad?
Retiring Boomers can be supermarket assets
Boomers age 65 are taking unexpectedly rapid paths to retire, rather than trying to work longer to help offset the recession’s impact on their life savings, house values and earnings prospects.
Nearly six in ten (59%) of the first Boomers to turn 65 are at least partially retired—45% no longer work and 14% have gone to part-time work, according to the MetLife Mature Market Institute study called Transitioning Into Retirement: The MetLife Study of Baby Boomers at 65.
Almost all of the rest of Boomers age 65 and older (37%) plan to retire within a year.
Celebrating Food!
One of the highlights of the many trade shows and events I have attended over the past few weeks was the first Supermarket Chef Showdown at the FMI 2012 in Dallas.
This single event was "a tipping point" (as Malcolm Gladwell would say) for our supermarket industry. The Showdown was simple - 20 supermarket chefs chosen from hundreds of applicants' recipes - competed on the show floor to create their best recipe in one of four categories. What was not simple was the reaction from the industry leaders who watched the competitions.
The Cottage Food Bill Clears First Hurdle in California
On April 17, 2012, the California Homemade Food Act (AB 1616) – more commonly known as the California Cottage Food Bill – passed the California Assembly Committee on Health, bringing small food operators in California one step closer to being able to legally provide their communities with healthy, home-grown food products.
“Cottage foods” are foods that are made in someone’s home kitchen and sold on a small scale, typically directly to consumers and at farmer’s markets. Cottage food laws typically allow only foods that are classified as “non-potentially hazardous foods” in state and federal laws – meaning that they are not conducive to the growth of harmful bacteria or other toxic micro-organisms. Those items can include baked goods (with no cream, custard or meat fillings), jams and jellies, granola, popcorn, nut mixes, roasted coffee, herb blends, candy, honey, dried fruit and dried pasta.
