October 2011
Get ready for 2012
2011 brought us higher food prices at unprecedented levels, crops and livestock destroyed by global weather catastrophes, nations at war over the lack of food supplies and more food recalls from unique points of origin. Americans love their foods - in supermarkets, on television, at restaurants and now even on their mobile phones. We are a nation obsessed with food trucks, molecular gastronomy and struggling to eat as local as we can. All of which has built a foundation for what may be one of the most exciting and game-changing years in the food world: Are you ready for 2012?
Facts, Figures & the Future is here to help by giving you the in-depth look at supermarket categories, consumer trends and the role that technologies will play in the shopping experience. I hope we are meeting your expectations and adding a thought provoking twist to our industry.
United States Farmers and Ranchers Alliance Panel: The View from 30,000 Feet
On September 22nd, the first-ever United States Farmers and Ranchers Alliance (USFRA) brought together experts from across the food spectrum to discuss the wide range of issues that influence how our food is grown and raised and how it ultimately ends up on your dinner table. Four panels were broadcast live via the Internet from Washington DC, Indiana, California and New York. The agenda and the questions posed in this forum were a direct result of two studies, one focusing on farmers and ranchers, and the other focusing on consumers.
Moderated by Phil Lempert, the Washington DC forum, "The View from 30,000 Feet," focused on macro issues such as feeding our growing population while maintaining our high standards for safety, quality and an abundant supply to ensure low food prices. The panel discussed the solutions and opportunities for the food industry and our government to address issues such as healthy food options and pricing, the need for investments in innovation and research, animal welfare, how to manage depleting land resources, and how to maintain a sustainable food system. Some key data points opened the discussion:
Will delayed retirements change food shopping?
America today is a land of two retirements - the forced early ones when companies downsize and the deferred ones that never seem to come because people feel they must work in order to sustain their households.
Neither appears to be good news for supermarkets, since both encourage shopper mindsets to save rather than spend, and to be utilitarian rather than indulgent. Food store operators that serve Baby Boomers and seniors should market to them with an understanding of the financial pressures they face, and the way these pressures might alter their food buying and consumption decisions.
The title of the 12th Annual Transamerica Retirement Survey, The New Retirement: Working, says it all. "For many Americans," the report concluded, "the foundation of their retirement strategy is simply not to retire, to work considerably longer than the traditional retirement age, or work in retirement." Here are the hard figures:
A fresh lift in cosmetics sales
Beauty has two faces - prestige and mass - and their trends don't always match.
However, they did pattern similarly in Q1 2011, reported The NPD Group/ SymphonyIRI Group Beauty Cross Channel Monitor, when prestige total beauty dollar sales rose five percent and FDM (excluding Walmart) was up four percent.
Probing deeper, the makeup category performed better at FDM in the quarter, up six percent vs. prestige's five percent, thanks to a double-digit sales rise in the $127 million (total U.S.) nail care segment.
The Costs of Hunger
Yesterday, the Center for American Progress and Brandeis University released a groundbreaking report detailing the social and economic costs of hunger in America. The report, Hunger in America, Suffering We All Pay For, found that in addition to federal expenditures to address hunger, the social and economic costs of hunger and food insecurity were a whopping $167.5 billion in 2010; this figure rose $42 billion from 2007. The report refers to this cost as America's hunger bill. Professor Donald Shepard of Brandeis University was the principal author of the report.
How does that cost break down? In 2010 America's hunger bill cost every American $542, highlighting the far-reaching impact of hunger.
The report indicates that the number of food insecure and hungry Americans jumped by 30 percent from 2007, before the onset of the recession, to 2010. In that same period, the cost of hunger, above federal expenditures, rose by more than 33 percent.
Where to find growth in the baby aisle
Babies are the perfect canvas for people to project thoughts of bright futures and continued success. Parents and grandparents light up when babies are in the room, even though they know those giggly little people will cost them plenty.
Retailers smile too because every growing family in their trading area means more potential 'ca-ching' at the cash register - for food, diapers, ointments and more. In the face of a declining birth rate (more on that later), supermarkets should begin marketing the baby connection to grandparents as well as parents, suggests F3.
Why? Because households in the 45-to-64 age range command 46% of total U.S. household income - and these monies will be needed to help "young adult children and grandchildren find their way and prosper in the new global economy," said demographic trends expert Peter Francese, who collaborated with the MetLife Mature Market Institute on The MetLife Report on American Grandparents.
School Nutrition Report 2011
The majority of school foodservice directors say that implementing new nutrition standards and meal patterns is the most pressing issue facing cafeteria programs across the nation this fall, according to a recent report from the School Nutrition Association (SNA). The report, based on an analysis of 1,294 survey responses from districts in 48 states, found that 69.5% of respondents are focused on meeting the new, healthier standards proposed by the USDA this past January.
These proposed standards establish maximum calorie and sodium limits for school meals and require schools to increase the frequency and variety of the fruits and vegetables and whole grains they serve. These proposed standards are currently being finalized and should take effect at the beginning of the 2012/2013 school year.
Tobacco sales slip below $10B benchmark
Like puffs of smoke that vanish in the air, the number of adult smokers in the United States is diminishing - though at a slower rate than in previous periods. Some 45.3 million American adults continue to smoke. That's 19.3% in 2010, a dip from 20.9% in 2005, reported the Centers for Disease Control and Prevention.
Most are everyday smokers (78.2% or 35.4 million), yet they smoke fewer cigarettes each day. The percentage of adult daily smokers who smoke 30 or more cigarettes per day fell from 12.7% in 2005 to 8.3% in 2010; the percentage of adult daily smokers who smoke nine or fewer cigarettes per day rose from 16.4% in 2005 to 21.8% in 2010.
Shades of value at lunch
Supermarkets that want their share of the lunch crowd - either through food trucks, prepared-food satellites, or opportune store locations that can lure dense numbers of weekday workers - should tailor efforts with an understanding of the value consumers seek at the midday meal.
For example, Millennials age 18-34 are the heaviest users of foodservices at lunchtime, and they're the likeliest to build meals with well-priced 'value' items. By contrast, Baby Boomers also driven by health and food quality are, "Less likely to perceive value in dollar menu items because of the broader context of their motivations," said Technomic director of consumer research Sara Monnette, upon release of the firm's Lunch Consumer Trend Report.
A few highlights of the Technomic study of 1,500 consumers:
Food Companies A Popular Target For Investment Firms | Whole Foods merges value with health
The Food Institute on food targets, and Whole Foods want a bigger slice, for today - Tuesday October 10th, 2011. Exchanging unexpected pieces of knowledge.
- Investors are hot for food food companies lately with one of the bigger deals on that front - BJ's Wholesale Club acquisition by affiliates of Leonard Green & Partners in an all-cash $2.8 billion deal. BJ's gets almost two-thirds of its sales from groceries and has 190 locations mainly in the northeastern region of the U.S. according to The Food Institute. In the third quarter of 2011 alone, the Food Institute's Merger & Acquisition database recorded 15 deals by investment firms and and the food industry - accounting for one-fifth of the 77 food industry divestitures they tallied in in the third quarter.
- Whole Foods is aiming for the whole market. Whole Foods' recent flurry of value-based activities is designed to lure mainstream consumers and expand its appeal beyond health-wellness-natural-and organic.
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