Winners
& Losers in the Food Retail Landscape
By FBWorld Team
Today's
consumer food purchases span a continuum of transactional to
experiential. Successful retailers, manufacturers and food service
operators will offer a balance of both extremes, said Christina
Bowden, senior director of Consulting Services at The Hartman
Group.
The
food retail landscape is increasingly complex and blurry. While
traditional grocery remains the main player in retail, consumers
are shopping on average more than four different channels each
month, Ms. Bowden said during The Hartman Group's Food Culture
Forecast 2018 summit on April 19 in Miami.
Nearly
half of shoppers visited multiple stores on the most recent
grocery trip, citing selection and price as top reasons. Additionally,
half of consumers are shopping more online than a year ago.
"That poses a really interesting and unique challenge for
the current system of shopping that we have today," Ms.
Bowden said. "Digital is basically increasing the competition.
They're stepping things up."
Online grocery shopping offers elements of transactional and
experiential, answering consumer desires for convenience and
value while also delivering a customized, playful and fun experience,
Ms. Bowden said.
"Online
is a treasure hunt for consumers," she said.
An example is Thrive Market, a subscription-based platform that
delivers natural and specialty snacks and pantry staples to
members at discounted prices. Products are categorized by more
than 70 values, ranging from low-FODMAP to locally sourced.
In addition to selling branded products, Thrive Market features
a variety of private label items, including organic chickpea
fusilli, organic sprouted popcorn and non-G.M.O. canned tuna.
"Online
will continue to change the competitive landscape," Ms.
Bowden said. "It's not just about being online but also
offering a unique and interesting experience that resonates
with consumers, and online also has the opportunity to really
deliver on that experiential element as well to differentiate
itself in the market."
Two
key needs articulated by consumers when shopping across retailers
are fresh, less processed foods and convenience, driving growth
at specialty grocers such as Aldi and Sprouts, Ms. Bowden said.
Forty-four per cent of consumers are shopping more at discounter
Aldi, which rates high among shoppers for value and satisfaction.
"Aldi
has found their prices are around 20% lower than that of their
competitors," Ms. Bowden said. "But it's not just
about price. It's about finding balance and that place on the
continuum that really makes them have own point of differentiation."
She
pointed to the brand's private label program, which includes
gluten-free and plant-based options, sustainably sourced meats
and a line of products free from artificial ingredients.
"They're really speaking to consumer values and building
trust with the consumer around what they say they want,"
she said.
Food
service operators also are delivering on a continuum of transactional
to experiential, fueling growth of premium quick-service restaurants
in recent years, Ms. Bowden said. An example is Sweetgreen,
a fast-casual salad chain featuring a menu of fresh, seasonal
ingredients.
"We're also seeing a lot of interesting and unique offerings
that deliver on another type of experience as well," she
said, citing Starbucks' color-changing Unicorn Frappuccino as
an example. "When we talk about experience, it's all about
trying something new, playing, having fun."