Page 1

STORE OF THE MONTH: Woodlands Market launches its first urban location in San Francisco IN LOVE WITH LUNCH Send shoppers packing with convenience, nutrition, taste KNOWLEDGE BY THE BUSHEL Teachable moments for exotic/specialty produce DIGITAL FIRST 6 ways that grocers can become tech-forward

WAKING UP 71 ANNUAL TO A CONSUMER EXPENDITURES NEW STUDY REALITY st

As Amazonization proceeds, grocery retailers step up efforts to be their own disruptors

July 2018 • Volume 97, Number 7

$10 • www.progressivegrocer.com


THE DELICIOUS TASTE CALORIE-COUNTERS CRAVE.

NOTHING ELSE. Grow your Lower-Calorie Produce Dressings Set with more Marzetti Simply 60™ items, because your shoppers want more of the delicious, clean-label choices they love. For more information contact your T. Marzetti Company representative at 614-846-2232. Made with Non-GMO Oils | No Preservatives | No Artificial Flavors | No MSG Added | Gluten-Free

Marzetti Simply 60™: Real Ingredients. Real Delicious. 60 Calories.

©2018 T. Marzetti Company. Marzetti is a registered trademark of the T. Marzetti Company. All rights reserved.


4 REASONS WHY PET CARE IS KEY TO YOUR ONLINE SUCCESS AS YOU BUILD OUT YOUR E-COMMERCE STRATEGY, CONSIDER THE OPPORTUNITY WITH PET CARE SHOPPERS WHOSE FREE-SPENDING WAYS CAN HELP ESTABLISH YOUR DIGITAL PROGRAM AS BEST-IN-BREED.

$69.5 $2.5

CATEGORY IN TOTAL SALES IN U.S. SUPERMARKETS

BILLION

BILLION

CATEGORY

Source: Nielsen AOD Core xAOC 2017

ANNUAL GROWTH SINCE ‘94

Source: APPA 2017 Estimate (Supplies, Services, Vet Care, Live Animals)

31% ONLINE PET CARE SALES UP

Source: Nielsen Custom Channel Facts 2017

70% OF CATEGORY GROWTH EXPECTED TO COME FROM ONLINE SALES THROUGH 2021

IN 2017 Source: 1010 E-Commerce 2017

Source: Internal Purina Estimates

20+% OF PET CARE SALES EXPECTED TO BE ONLINE BY 2021. Source: Internal Purina Estimates

Source: Nielsen Category Shopping Fundamental Qualitative Shopper Study

MORE SPEND PER TRIP BY PET SHOPPERS ACROSS THE STORE

AT LEAST

70%

TRIP DRIVER AMONG U.S. SUPERMARKET CATEGORIES

Source: American Pet Products Association

Online pet shoppers spend 2X MORE on pet food, vs. in-store only shoppers.

IN-STORE

ONLINE

DELIVERY

Make it better than ever with a store-within-a-store approach, and robust signage promoting e-commerce options

Align with in-store promos, pricing and assortment, and simplify checkout

Offer in-store and online fulfillment options, i.e. home delivery, curbside pick-up

BUT STORES STILL MATTER! DIGITAL WILL INFLUENCE

77% OF ALL RETAIL SALES. Source: IRI Growth Summit 2017

ONLINE PET SHOPPERS ALSO SHOP IN STORE (only 28% of their pet food/ treats spend is online vs 72% in-store)

Pet care holds great opportunity for your e-commerce business. But, to win in pet, you must embrace the omni-channel experience and appeal to pet owners in all the ways they want to shop!

Nestlé Purina PetCare Company is a global leader in the pet care industry. Nestlé Purina PetCare promotes responsible pet care, community involvement and the positive bond between people and their pets. A premiere global manufacturer of pet products, Nestlé Purina PetCare is part of Swiss-based Nestlé S.A., a global leader in nutrition, health and wellness.


Contents 07.18

Volume 97 Issue 7

24

Features

24 STORE OF THE MONTH

Out of the Woods A Marin County staple, Woodlands Market opens its first urban location in San Francisco.

Departments 8 EDITOR’S NOTE

Drive Growth With Grocerants 12 IN-STORE EVENTS CALENDAR

September 2018 14 CONSUMER INSIGHTS

Cover Story

32

PROGRESSIVE GROCER ’S 71 st ANNUAL CONSUMER EXPENDITURES STUDY

Waking Up to a New Reality

As Amazonization proceeds, grocery retailers step up efforts to be their own disruptors.

16 MENU TRENDS

22 ALL’S WELLNESS

Alternative Proteins

Packing a Healthier Lunchbox

18 NIELSEN’S SHELF STOPPERS/SPOTLIGHT

80 EDITORS’ PICKS FOR INNOVATIVE PRODUCTS

Frozen Foods 20 MINTEL GLOBAL NEW PRODUCTS

Deodorants

16

82 TECH TALK

Does Mobile Checkout Need a Rethink?

Produce Optics PROGRESSIVE GROCER July 2018

5


Contents 07.18

Volume 97 Issue 7

8550 W. Bryn Mawr Ave. Ste. 200, Chicago, IL 60631 Phone: 800-422-2681 Fax: 978-671-0460

www.ensembleiq.com

66 SOLUTIONS

SVP, Brand Director Katie Brennan 201-855-7609 • Mobile: 917-859-3619 kbrennan@ensembleiq.com

Midday Marvels

Marketing and merchandising the latest crop of easily packable items requires a focus on the things that matter most to consumers.

EDITORIAL EDITORIAL DIRECTOR James Dudlicek 224-632-8238 jdudlicek@ensembleiq.com MANAGING EDITOR Bridget Goldschmidt 201-855-7603 bgoldschmidt@ensembleiq.com DIGITAL & TECHNOLOGY EDITOR Randy Hofbauer 224-632-8240 rhofbauer@ensembleiq.com SENIOR EDITOR Kat Martin 224-632-8172 kmartin@ensembleiq.com CONTRIBUTING EDITOR D. Gail Fleenor ADVERTISING SALES & BUSINESS SOUTHEAST ACCOUNT EXECUTIVE Larry Cornick (NEW ENGLAND, SOUTHEAST) 224.632.8248 lcornick@ensembleiq.com

66

70

SENIOR MARKETING MANAGER Judy Hayes (CA, PACIFIC NORTHWEST) 925-785-9665 jhayes@ensembleiq.com SENIOR MARKETING MANAGER Theresa Kossack (MIDWEST) 214-226-6468 tkossack@ensembleiq.com WESTERN REGIONAL MARKETING MANAGER Rick Neigher (SOUTHWEST) rneigher@ensembleiq.com 818-597-9029 MARKETING MANAGER Mike Shaw (MID ATLANTIC) 201-855-7631 • Mobile: 201-281-9100 mshaw@ensembleiq.com ACCOUNT EXECUTIVE/CLASSIFIED ADVERTISING Terry Kanganis 201-855-7615 • Fax: 201-855-7373 tkanganis@ensembleiq.com

70 PRODUCE

Higher Education

Teaching consumers about specialty and exotic produce can be a highly effective sales tool.

CLASSIFIED PRODUCTION MANAGER Mary Beth Medley 856-809-0050 marybeth@marybethmedley.com EVENTS VICE PRESIDENT, EVENTS Michael Cronin mcronin@ensembleiq.com MARKETING MARKETING MANAGER Carly Kilgore 201-855-7601 ckilgore@ensembleiq.com AUDIENCE ENGAGEMENT DIRECTOR OF AUDIENCE ENGAGEMENT Gail Reboletti greboletti@ensembleiq.com AUDIENCE ENGAGEMENT MANAGER Shelly Patton 215-301-0593 spatton@ensembleiq.com LIST RENTAL MeritDirect Elizabeth Jackson 847-492-1350, ext. 318 ejackson@meritdirect.com SUBSCRIBER SERVICES/SINGLE-COPY PURCHASES 978-671-0449 or email at EnsembleIQ@e-circ.net

77 77 TECHNOLOGY

Culture Counts

Before grocers can adopt a tech-forward strategy, they must create and nurture a techforward culture.

PROJECT MANAGEMENT/PRODUCTION/ART VICE PRESIDENT OF PRODUCTION Kathryn Homenick khomenick@ensembleiq.com CREATIVE DIRECTOR Colette Magliaro cmagliaro@ensembleiq.com CUSTOM PROJECT MANAGERS Kathy Colwell kcolwell@ensembleiq.com Judi Lam jlam@ensembleiq.com ADVERTISING/PRODUCTION MANAGER Jackie Batson 224-632-8183 jbatson@ensembleiq.com ART DIRECTOR Bill Antkowiak bantkowiak@ensembleiq.com REPRINTS, PERMISSIONS AND LICENSING Wright’s Media ensembleiq@wrightsmedia.com 877-652-5295

CORPORATE OFFICERS EXECUTIVE CHAIRMAN Alan Glass CHIEF EXECUTIVE OFFICER David Shanker CHIEF OPERATING OFFICER & CHIEF FINANCIAL OFFICER Richard Rivera CHIEF BRAND OFFICER Korry Stagnito PRESIDENT, CANADIAN DIVISION & NORTH AMERICAN GROCERY Jennifer Litterick PRESIDENT, ENTERPRISE SOLUTIONS Terese Herbig CHIEF DIGITAL OFFICER Joel Hughes CHIEF HUMAN RESOURCES OFFICER Jennifer Turner SENIOR VICE PRESIDENT, INNOVATION Tanner Van Dusen

6

progressivegrocer.com


EDITOR’S NOTE By Jim Dudlicek

Drive Growth With Grocerants s we report in our 71st Annual Consumer Expenditures Study this month, fresh and perishable foods generated sales nearly 14 times as high as all online food and beverage sales this year. That revelation, reported by Nielsen, drives home where traditional grocers need to be devoting most of their attention for the in-store experience. Further demonstrated by Nielsen data: Prepared foods leads grocery’s growth categories, surging 139.5 percent to more than $36 million in sales. And if that’s not enough of a convincer, the latest study from the Food Marketing Institute indicates that “a modern lens on convenience, health and freshness are the trifecta for supporting a competitive foodservice growth strategy in food retail.” In the past five years, food spending for meals prepared at home grew 5 percent, while spending on meals prepared away from home increased 20 percent, according to the Bureau of Labor Statistics. The latest installment of FMI’s “Power of Foodservice at Retail” suggests that food retailers can assist shoppers in their weekly menu planning and prove the convenience value of retail foodservice. “Our research shows that an overwhelming 65 percent of consumers have not made up their mind on what to eat for dinner by 4 p.m., so this trend of consumers partnering scratch-cooking with time-saving meal accompaniments aligns well with grocers’ merchandising and marketing strategies,” says Rick Stein, FMI’s VP of fresh foods. “The research also shows that those loyal supermarket foodservice consumers give high marks for healthy choices, affordability and the ease of shopping the store, combined with their foodservice purchase.” Serving the “shop at 5, dine at 7” consumer should be an integral part of your retail strategy, asserts Charlie Baggs, chef and culinary innovation consultant, in a recent online column (https:// progressivegrocer.com/just-time-meal-planning-impacts-food-retail-strategy-0) that’s referenced in our Consumer Expenditures Study, which starts on page 32. Even the prestigious culinary organization Les Dames d’Escoffier International lists prepared foods and grocerants, including in-store drinking and dining, as the top food retail trends in its 2018 trends report. To learn more about the latest trends and best practices in retail foodservice, plan to attend Progressive Grocer’s fourth annual Grocerant Solutions Summit, Oct. 3-4 in Minneapolis, co-located with the Path to Purchase Expo, hosted by PG’s parent company, EnsembleIQ. The event brings together retailers, industry experts and product vendors to showcase innovative solutions for in8

progressivegrocer.com

Driving a message of convenience, health and freshness will prove the value of grocery foodservice to consumers.” store dining concepts. We offer a future-forward look at the transformation of fresh solutions, highlighting products, concepts and equipment that will help retailers be their own disruptors. New this year to the summit’s educational program is the Chef Solutions Challenge, a live cooking demonstration featuring chefs from Hy-Vee, Coborn’s and other retailers creating culinary solutions designed to delight and inspire. Heading up our educational track is the International Dairy Deli Bakery Association, whose new education director, Angela Bozo, former senior manager of retail events and merchandising at Portland, Ore.-based New Seasons Market, will lead a discussion of the key trends that will drive grocerant success in 2019 and beyond. Also on the lineup are Datassential’s Jack Li, speaking on menu trends; “Superconsumer” expert Eddie Yoon; and Gerry Fernandez of the Multicultural Foodservice & Hospitality Alliance, plus sessions on meal kits, cutting-edge store design, reducing food waste, and more. I look forward to seeing you there! Register for the Grocerant Solutions Summit online at https://fs6.formsite.com/stagnito/form198/index. html?1527003387136.

Jim Dudlicek Editorial Director jdudlicek@ensembleIQ.com Twitter @jimdudlicek


NEW CREATIVE PACKAGING INDIVIDUAL NOODLE PACKS HEAT & SERVE READY IN

3 MINUTES

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Introducing Blount’s Delicious Asian Inspired Beef Pho Bowl, Featuring Premium Ingredients Including, Angus Beef, Noodles and a Medley of Spices. Just Heat and Serve - A Must for the Millenial Consumer! OFFER ALL FIVE ASIAN INSPIRED VARIETIES TO INCREASE SALES & PROFITS!

To learn more, contact Blount Fine Foods at 774-888-1300. www.blountfinefoods.com


BEER DISPLAYS DRIVE GROCERY SALES IN EVOLVING CONSUMER LANDSCAPE With ecommerce on the rise, traditional grocery total store sales growth slowed to

0.5 percent, and grocery store trips down 2.5 percent as new competitors emerge, supermarket retailers need to continue driving out costs through consistent operational discipline—and find strategic ways to disrupt in-store shoppers. Beer is the perfect product to drive this disruption and ensure operational efficiency. Within the beverage category, beer ranks high in penetration, trips and dollars spent in total U.S. food. It helps increase traffic and revenue, and delivers profits for retailers as the No. 1 revenue category in the total U.S. food channel with $10.6 billion in annual revenue, according

It all adds up to a prime opportunity to help level the playing field with current and emerging competitors by leveraging the benefits of the beer category.

PUTTING BEER ON DISPLAY

Displays and features with displays are beer’s main merchandising driver outside of the shelf across all segments in total U.S. food, leading to both impulse purchases and planned purchase conversion. These displays play an important role in beer in-store sales, with beer generating the third most incremental dollar sales among all categories when both featured and displayed. All beer ad feature items should be accompanied

AVERAGE ANNUAL SPENDING ON FOOD & BEVERAGE 2017 DRUG

-13% GROCERY

-5%

MASS

-1% +3%

C-STORE

+5% SOURCE: ABI CATEGORY LEADERSHIP; INFOSCOUT CALENDAR YEAR 2017; IRI MULTI-OUTLET TOTAL STORE 2017

to data from IRI. In addition, IRI reports that 41 percent of households shop beer on an average of 14 trips per year, spending $14.26 per trip. Beer also ranks as a highly productive grocery category for inventory management and space optimization, outperforming liquor and wine in weekly movement and weekly true profit per square foot. As the third-highest weekly true profit in U.S. grocery, beer is one of the Top 10 categories of weekly true profit and turns, which—unlike gross margins—accounts for activity-based costs.

DOLLAR

+10%

ECOMMERCE

by displays to take advantage of the resulting increase in lift, and the boost in incremental dollars compared with wine and spirits.

BACK-OF-THE-STORE STRATEGIES

To be successful, beer display strategies need to balance financial, operational, shopper and in-store considerations as they draw shoppers into aisles and remind them to purchase. Most important, of course, is that the display falls into the shopper’s vision, or else it will be impossible to create a sale.


AVERAGE BEER SALES LIFT

+58%

FEATURE ONLY

+81%

FEATURE AND DISPLAY

BEER ADS + DISPLAYS DELIVER THE MOST INCREMENTAL LIQUOR DOLLARS

$421 M $171 M $46 M

BEER WINE SPIRITS

BEER % INCREMENTAL DOLLARS BY MERCHANDISING TYPE TPR ONLY

Back endcap displays tend to drive greater overall purchases, and here’s why: A shopper typically takes one of two paths when navigating in the store—U-shape or Racetrack—depending on the shopper’s needs and time. But both of these two paths suggest that the back of the store should have more foot traffic and visual reach than the front. And in fact, endcaps at the back of the store have an average of 88 percent foot traffic, compared with 64 percent for front endcaps. The average visual reach for back endcaps (54 percent) is also twice that of front endcaps (24 percent). Back endcaps act as advertising billboards, reaching shoppers who were not planning on buying the category that day.

AVERAGE FOOT TRAFFIC

88 % BACK

ENDCAPS

64 % FRONT

ENDCAPS

18% 35%

FEATURES ONLY DISPLAY ONLY

AVERAGE VISUAL REACH

20%

FEATURES & DISPLAY

27%

54 % BACK

ENDCAPS

24 % FRONT

ENDCAPS

SOURCE: ABI CATEGORY LEADERSHIP; IRI 2017 FY TOTAL U.S. FOOD

BEER BY THE NUMBERS 13th in purchase cycle at 28 days 33 percent of beer shoppers’ trips have category as a primary driver

$31 added to basket with a beer purchase 2nd largest category in driving annual dollars per buyer

3rd in per trip dollars 113 percent index on incremental sales from displays

SOURCE: ABI CATEGORY LEADERSHIP; KANTAR; ANHEUSER-BUSCH BEHAVIOR POLL 2017

6th in annual inventory turns and adjusted gross profit/linear foot

SPONSORED CONTENT


IN-STORE EVENTS

Calendar S

09.18

M

National Family Meals Month Hispanic Heritage Month Childhood Cancer Awareness Month National Honey Month

T

W

National Chicken Month Better Breakfast Month National Blueberry Popsicle Month National Mushroom Month

T

F

S

1

National Cherry Popover Day National Gyro Day

2

Run breakfast specials for both International Bacon Day and National “Grits for Breakfast” Day.

9

Rosh Hashanah begins.

3

Labor Day National Baby Back Ribs Day

10

National Hot Dog Day

National “I Love Food” Day

4

National Macadamia Nut Day

11

9/11 Remembrance

5

Be Late for Something Day

6

National Coffee Ice Cream Day

7

National Salami Day

National Cheese Pizza Day

National Beer Lover’s Day

International Day of Charity

National Acorn Squash Day

12

Expo East begins and runs through Sept. 15.

No News is Good News Day

13

Fortune Cookie Day. Include some fortunes on customers’ receipts.

National Hot Cross Bun Day

Chocolate Milkshake Day

National Peanut Day

17

18

19

20

National Monte Cristo Day

National Cheeseburger Day

8

National Date Nut Bread Day

14

15

Eat a Hoagie Day

National Linguini Day

21

22

World Gratitude Day

National Ice Cream Cone Day

National Pecan Cookie Day

Oktoberfest begins in Munich.

28

29

National Cream-Filled Doughnut Day

National Thank You Day

TV Dinner Day

16

Celebrate Mexican Independence Day and National Guacamole Day by promoting your housemade specialty.

23

Autumn Equinox

National Apple Dumpling Day

24

National Cherries Jubilee Day

Sukkot begins. National White Chocolate Day

Yom Kippur

25

Recognize all of your grocerant/ prepared food staff for National Food Service Workers Day. National Cooking Day

30

National Mulled Cider Day

12

progressivegrocer.com

International Talk Like A Pirate Day

National Pepperoni Pizza Day

National Butterscotch Pudding Day

National Punch Day

26

27

National Key Lime Pie Day

National Pancake Day

Have a milkdrinking contest for the best milk mustache to celebrate National Chocolate Milk Day.

International Peace Day

Native American Day Ask a Stupid Question Day National Strawberry Cream Pie Day

Eid-Ul-Adha

Confucius Day National Coffee Day


AT THE J.M. SMUCKER COMPANY, PREADS LEADERSHIP IS AS EASY AS PB&J.

At the J.M. Smucker Company, spreads leadership is as easy as PB&J.

We take a total category approach

We put shoppers first

• Developing holistic category insights

• Evolving our portfolio to meet their needs

• A�racting shoppers with new products

• Providing be�er-for-you alternatives

• Investing in total category to drive growth

• Offering options for every occasion

Innovation brought to you by The J.M. Smucker Company family of brands. ©/TM/® The J.M. Smucker Company. * Source: IRI Unify Multi-Outlet – 52 Weeks Ending March 25, 2018


CONSUMER INSIGHTS

Market Research

Produce Optics HOW ARE CONSUMERS SHOPPING FOR PRODUCE? The good news is two-thirds of consumers say that they’re purchasing fresh fruit and vegetables at least once per week. Nonorganic options make up most of the purchases, but 70 percent of consumers indicate that they purchase some items that are organic. Progressive Grocer, along with sister company EIQ Research Solutions, interviewed 500 consumers who have household responsibility for grocery shopping to find out how they shop for produce. Survey respondents were sourced via ProdegeMR, reinventing the market research process by taking a respondent-first approach. Visit www.prodegemr.com for more information.

70%

How frequently do you purchase fresh fruit?

of shoppers purchase some organic fruit and vegetables. Nearly 50% of shoppers buy their fruit and vegetables from conventional supermarkets, while another 28% buy them from a supercenter.

GENDER

GENERATION

TOTAL

MALE

FEMALE

MILLENNIALS

GENERATION X

BABY BOOMERS

MATURE/ SILENTS

Once per week or more

66.89%

64.78%

68.53%

66.12%

70.0 8%

6 6 . 2 2%

62.30%

Daily

2.17%

3.02%

1.52%

4.40%

2.92%

0.53%

-

A couple of times per week

22.96%

24.11%

22.06%

24.32%

25.72%

20.53%

20.67%

About once per week

41.76%

37.65%

44.95%

37.40%

41.44%

45.16%

41.63%

A couple of times per month

21.58%

21.61%

21.56%

19.43%

21.01%

21.15%

32.07%

About once per month

5.76%

6.28%

5.36%

9.47%

2.49%

6.06%

2.87%

A few times per year

4.18%

4.26%

4.11%

3.57%

4.38%

4.79%

2.76%

About once per year or less often

1.59%

3.08%

0.44%

1.41%

2.03%

1.78%

-

How frequently do you purchase fresh vegetables? GENDER

59%

of consumers always or usually eat fruit as a snack.

54%

of consumers think that their children (under age 18) are eating the correct amount of vegetables.

TOTAL

MALE

FEMALE

MILLENNIALS

GENERATION X

BABY BOOMERS

MATURE/ SILENTS

Once per week or more

66.48%

62.74%

69.38%

63.20%

6 9. 9 8%

67. 9 0%

59.65%

Daily

1.67%

2.38%

1.13%

4.07%

1.46%

0.48%

-

A couple of times per week

24.59%

25.67%

23.75%

25.81%

27.12%

22.80%

20.67%

About once per week

40.21%

34.69%

44.51%

33.32%

41.40%

44.62%

38.98%

A couple of times per month

23.00%

24.57%

21.77%

23.26%

19.47%

21.86%

38.13%

About once per month

5.36%

5.03%

5.61%

8.47%

4.23%

4.63%

2.22%

A few times per year

3.05%

3.86%

2.41%

2.89%

3.68%

3.40%

-

About once per year or less often

2.12%

3.80%

0.82%

2.17%

2.63%

2.21%

-

Source: Progressive Grocer market research, 2018

14

GENERATION

progressivegrocer.com


The W∂ nderful Company is the #1 fastest-growing CPG company

A Healthy Growth Spurt • Our health-focused brands outpaced tobacco, alcohol, soft drinks and candy to become the #1 fastest-growing Consumer Packaged Goods (CPG) company. • At 13%, we are the only multibillion-dollar company with double-digit sales growth. • Our rise accounts for an impressive 5% of all growth in CPG.

Source: IRI ILD POS database, 2011-2017, MULO+C, IRI Consulting and BCG analysis. © 2018 The Wonderful Company.. Al All Rights Reserved. WONDERFUL, POM, POM POMS, HALOS, FIJI, SWEET SCARLETTS, JUSTIN, the accompanying logos and all other trademarks are owned by The Wonderful onderful Company or its affiliates. WM180518-09


MENU TRENDS

Research & Analysis

Alternative Proteins ALTERNATIVE PROTEINS ARE MAKING A MARK AT THE ME AT COUNTER, CPGS AND DAIRY. Americans aren’t dropping their appetite for meat any time soon, but they do want to increase their consumption of fruits and veggies and decrease their intake of animal proteins, mostly for health reasons. These considerations have led to an upsurge in marketing plant-based proteins that can be incorporated into dishes or as an animal-product substitute. Did you know that innovative food trends start at upscale and ethnic restaurants? As a grocer, you should be aware of the trends that are ticking at their earliest stages, so you can be steps ahead of the competition. Here are four alternative proteins, starting with those in the very early Inception stage of Datassential’s Menu Adoption Cycle (MAC). Watch out for these alt-proteins:

1

Mung Bean MAC stage: Inception — Ethnic markets, ethnic independents and fine dining Trends start here and exemplify originality in flavor, preparation and presentation. Commonly used in Asian cooking for both sweet and savory dishes, the mung bean is also showing promise as an egg alternative — it can really scramble. Just Inc. is producing such an “egg.” This product may soon be available as a new egg replacement available for retail. On 1% of U.S. menus +16% over the past four years 30% of consumers know it / 14% have tried it Menu Example Hugo’s Veggie Burger — Hugo’s Restaurants, Los Angeles Organic sprouted mung beans, organic brown rice, assorted fresh vegetables, mushrooms, pumpkin and sunflower seeds, pesto, herbs and spices.

16

progressivegrocer.com

2

Flax MAC stage: Adoption — Ethnic aisle at supermarkets, casual independents, fast casual

3

Chickpea (Garbanzo) MAC stage: Proliferation — Grocery deli, casual chains, QSRs

Adoption-stage trends grow their base via lower price points and simpler prep methods. Still differentiated, these trends often feature premium and/or generally authentic ingredients.

Proliferation-stage trends are adjusted for mainstream appeal. Often combined with popular applications (on a burger, as pasta, etc.), these trends have become familiar to many.

Datassential projects flax to grow nearly 60 percent on restaurant menus over the next four years, gaining in popularity thanks to a rise in interest in better-for-you ingredients. The high-protein, high-fiber seed has a versatile array of uses in cooking. Flax seeds are already available on store shelves by themselves and as an ingredient in CPGs.

The chickpea is no longer just about hummus — it’s become a true protein alternative. Already often added as a meat substitute, this high-protein legume is being used to create faux ice cream and eggs. It’s also used to make aquafaba, a base for these and other alternatives. Chickpea is an ingredient worth considering for grocerant plant-based meals.

On 2% of U.S. menus +64% over the past four years

On 16% of U.S. menus +24% over the past four years

68% of consumers know it / 36% have tried it

80% of consumers know it / 55% have tried it

Menu Example Peanut Butter Energy Bites — Coolgreens, Oklahoma City, Okla. Bite-sized snacks made with honey, oats, peanut butter, flax seed, vanilla, toasted coconut and chocolate, in a 4-pack.

Menu Example Vegan Omelette — Café Patachou, Indianapolis Open-faced garbanzo flour crepe, hummus, black beans, tofu crumbles, greens, avocado, salsa, vegan spinachjalapeño pesto.

4

Black Bean MAC stage: Ubiquity — Available everywhere — convenience stores, cafeterias, family restaurants, etc. Ubiquity-stage trends have reached maturity and can be found across all sectors of the food industry. Already well established as a vegetarian alternative to meat, the black bean continues to grow in different dishes. Thanks to its meaty texture, it can be used to create vegetarian versions of ground meat, quesadillas, salad proteins, and more. With interest growing in vegetarian/flexitarian eating, consider adding a wider selection of clean-label beans. On 13% of U.S. menus +11% over the past four years 90% of consumers know it, 73% have tried it Menu Example BBQ Ranch Salad — Salad and Go, Phoenix Mixed greens and romaine, corn, black beans, pico de gallo, avocados, tortilla strips and pepper jack cheese, paired with chipotle BBQ ranch dressing. Gluten-free.


th NE is W fa ll!

at HOME Eating well is selling well. These Panera bakery-cafe inspired soups are sure to be big sellers, with delicious new flavors including Minestrone Soup with Chickpeas & Kale and Southwest Corn Chowder! Provide your customers delicious premium quality meals with heat-and-serve ease. Put the power of Panera on your shelves. When your customers eat well, you profit well. For more info, call your Blount sales rep at 800-274-2526.

Available in conveniently-sized 16oz microwavable cups that give busy customers more choices for eating well.

Exclusive Manufacturer & Partner of Panera Retail Soup, Mac & Cheese, Chili, and Stew. Š 2018 Panera Bread. All Rights Reserved.


FRONT END

Shelf Stoppers

Shelf Stoppers

Frozen Vegetables TOTAL FROZEN VEGETABLE SALES REACHED $2.97 BILLION IN THE PAST YEAR (52 weeks ending April 2, 2016)

Frozen Foods

TOP 5 CATEGORIES IN $ GROWTH (MORE THAN $500M IN ANNUAL SALES) $16,000,000,000

Basket Drivers

Consumers chose frozen broccoli over alternatives for a variety of reasons:

$14,000,000,000 $12,000,000,000

Among various frozen breakfast products, 12%which command because it’s the quick and easy greatest average spend per trip for the average 10% household?

$10,000,000,000 8,000,000,000 6,000,000,000 4,000,000,000 2,000,000,000

because it tastes great

0 52 Wks - W/E 05/26/18 Vegetables

Pizza

52 Wks - W/E 05/27/17

52 Wks - W/E 05/28/16

Processed Meat Seafood Spotlight on Frozen Broccoli

Prepared Foods

WHEN ARE CONSUMERS EATING FROZEN BROCCOLI? Broccoli as an ingredient is most commonly

Frozen broccoli is most often used in a side

The last yearconsumed was a positive one forbyfrozen seeing nearly percent in at dinner, followed lunch. foods,dish, followed by as 2a main entrée. dollar growth. New, trendy categories are redefining the frozen aisle with 3% cleaner labels, fresher ingredients and more ethnically diverse meal choices. We’re seeing more and 9% more that frozen foods are meeting consumer demand for healthful and convenient meal solutions, and many frozen foods are successfully appealing to the Millennial cohort in particular. The future of frozen is on the rise, especially OCCASION MEAL ITEM among categories such as frozen prepared foods.” 29% TYPE CLASS 62% 35% 61%

—Lauren Fernandes,

Manager-Strategy and Analytics, Nielsen

DINNER LUNCH OTHER Spotlight on Frozen Dinners

SIDE DISH

MAIN ENTRÉE

18

Comparison Products

Percent Penetration

Index

Sugar and Sweeteners

78.4%

106

Medications, Remedies and Health Aids

94.3

105

Candy

97.0

104

Ice Cream and Novelties

90.5

104

Butter and Margarine

90.8

103

Carbonated Beverages

92.8

103

progressivegrocer.com

$7.38

Frozen Breakfast Sandwiches

8%

because it’s low in calories, fat and sugar

$6.35

Frozen Breakfast Entrées

OTHER

Sugar and sweeteners present a potential opportunity for cross-merchandising or co-promotions with frozen dinners — in other words, consumers of frozen dinners are 6 percent more likely to purchase sugar and sweeteners than the average consumer. Other complementary categories include medication, remedies and health aids, candy, and ice cream and frozen novelties.

Source: Nielsen

9%

because it’s healthy and nutritious

$4.02

Toaster Pastries

$3.90

Frozen Waffles, Pancakes and French Toast Source: Nielsen Homescan, Total U.S., 52 weeks ending May 26, 2018


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MINTEL CATEGORY INSIGHTS

Global New Products Database

Deodorants Market Overview

Most North American and European countries, as well as Japan and South Korea, are seeing slowed growth in retail market spend per capita. North America leads the way globally in new product development of stick formats, which accounts for more than half of recent deodorant launches in the region. While gender-specific claims have decreased globally, sales of gender-specific deodorants still outperform sales of unisex deodorants in the United States and continue to remain a relevant market in the country.

Stick formats dominate North America, with 76 percent of Americans saying that they use a stick antiperspirant/ deodorant, suggesting an opportunity for more disruptive stick-format innovations that offer differentiation and added value.

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Key Issues

Amid elevated controversy over aluminum, which has potential links to cancer and skin sensitivities/allergies, one in five U.S. antiperspirant/deodorant users thinks that an aluminum-free formula is the most important factor when purchasing new deodorant. North America is driving new product development of deodorants with essential oils and waters as ingredients. Deodorant brands can promote skin-friendly attributes and other multifunctional benefits as Americans grow increasingly interested in deodorants that have moisturizing and skin-healing properties.

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What Does It Mean? Brands can innovate new stick formats focused on emphasizing appealing scents, long-lasting protection and antimarking claims to differentiate their products. There’s an opportunity for more natural deodorants and new products that are boldly marketed as aluminum-free or free from other chemicals and synthetic ingredients.

Unusual and disruptive natural ingredients can help brands stand out and attract consumer attention, including ingredients such as birch water, charcoal, baobab and an array of essential oils.


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ALL’S WELLNESS By Molly Hembree

Packing a Healthier Lunchbox GROCERS CAN PROMOTE THE RIGHT INGREDIENTS TO GE T SHOPPERS E ATING BE T TER. hether you’re at school or on the job, lunchtime is a welcome midday break to reset and recharge. Consumers are looking for tasty, cost-efficient and convenient solutions for their packed lunches, and retailers can answer the call with meal ideas from all corners of the store.

through confusion related to eating well. Showcase any healthy-living tools or new lunchtime product or meal ideas through store tours or demos. Retailers featuring home delivery or curbside pickup should include lunch-appropriate digital or print recipes with optional reusable containers to add to a “cart” for toting lunchtime favorites, especially in preparation for the back-to-school season.

Make the Grade

Plate studies, such as those reported in Public Health Nutrition, suggest that about 55 percent to 66 percent of elementary and middle school students don’t select vegetables for lunch. This presents an opportunity for parents or caregivers to include well-accepted, flavorful and enticing healthy foods in youth lunches, and for retailers to deliver attractive and wholesome products to beat brown-bag boredom.

Keep it Simple

Retailers can redirect consumers’ tendency to grab takeout or fast food for lunch by instead offering single-serve packaged goods, ready-to-eat frozen ideas, or heat-and-serve individual entrées and sides from the shelf. Portion-controlled containers of lunchtime favorites, often displayed in popular multicompartment Japanese-style “bento” boxes, will also catch the attention of weight-conscious consumers. Center-aisle fruit, vegetable, and grain items are a portable idea for consumers as they prepare for their week, and can be highlighted in merchandising efforts.

That’s a Wrap

Kids and adults alike can appreciate the ease of tortillas, pita pockets, lettuce wraps, bread slices or taco shells for stuffing better-for-them ingredients into a grab-and-go format. MyPlate guidelines, aligned to the 2015-20 Dietary Guidelines for Americans, recommend including fruits, vegetables, grains, protein and dairy with every meal. Grocers should post in-store signage or short online videos with stepby-step instructions to encourage creativity with finger foods.

Connect with your retail dietitian team for the latest in product trends and nutrition attributes that may influence what customers are buying at lunchtime. Retailers should connect with their retail dietitian teams for the latest in product trends and nutrition attributes that may influence what customers are buying at lunchtime. Resources are available from Orlando, Fla.-based Produce for Kids (PFK) at PowerYourLunchbox.com, such as seasonal produce information and recipes. PFK’s “build your own healthy lunchbox” materials can be used as tear pads in the aisle or through a promotional event to take the guesswork out of lunch pairings.

Other Engagement

Nutrition-related technology, such as the OptUP healthy-shopping app at Cincinnati-based Kroger or shelf-edge education such as Guiding Stars at Scarborough, Maine-based Hannaford, can break-

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Molly Hembree, RD, LD, is a registered dietitian coordinator for The Little Clinic and Kroger.


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JULY 2018

Store of the Month AA

OUT OF THE WOODS

A Marin County staple, Woodlands Market opens its first urban location in San Francisco. By Kat Martin Photography by Timothy Shonnard

N

eighborhoods are continually changing along with their retail landscapes. Striking when the time is right is often the key to success in an urban environment. That being the case, Woodlands Market has gotten in on the ground floor — literally — in San Francisco’s now booming Rincon Hill neighborhood, near the Transbay Terminal hub. The area was decimated in the 1989 earthquake, and with the rerouting of the highway’s on- and off-ramps, the neighborhood is slowly coming back to life. Both residential and retail buildings are emerging from what was once a sea of vacant lots. One of the first retail spots to open, Woodlands Market, which debuted in August 2017, is located on the ground floor of the Lumina building, which features 650 condos. “We’re practically ground zero in that we are the hub for the community for all their grocery needs and all their community interaction, because there really isn’t too much else [retail-wise] around the area right now,” says Don Santa, founder and CEO of Kentfield, Calif.-based Woodlands Market. “But it is developing as we speak.” He notes that in the two blocks immediately around the store, five buildings that are at least 40 stories tall are currently under construction, most of them residential. The plan for the area is to create a neighborhood that’s easily walkable, with all of the necessities. “We were the first to the party, but there are going to be other offerings and establishments to come,” Santa acknowledges. “But we will be the full-service grocery provider.”

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Woodlands Market San Francisco, Calif.

A concrete floor and steel design elements create the urban feel of Woodlands San Francisco, while wood accents retain the warm feeling for which the company is known. PROGRESSIVE GROCER July 2018

25


STORE OF THE MONTH

Woodlands Market The olive bar is a prime element in all Woodlands locations; the San Francisco store’s version features a more urban feel, with steel and marble elements.

Urban Expansion As well as being its first urban store, this is the third location overall for the independently owned grocer, whose first two stores are in Kentfield and Tiburon, Calif. While the San Francisco store is much smaller than the two Marin County stores — at about 9,500 square feet — all three serve a similar economic demographic, although there are some differences when it comes to family size and age. The San Francisco location is home to many who work in the tech industry and live at a bit of a faster pace, with limited time for food shopping or preparation. The Rincon Hill area also seems to be something of a dog mecca. Accordingly, while Kentfield also is home to Woodlands Café, San Francisco has Woodlands Pet Shop, which is opening this summer next door to the market on the ground level of the Lumina building. The business operates completely separately, but “it’s about feeding the people and feeding the pets,” Santa says. For Woodlands’ third location, Santa was approached by the developers of Lumina, one of whom is a regular customer at one of the Marin County stores, to open a supermarket in the new residential building. “It was a step into a whole new marketplace,” Santa admits. “We went from the suburbs into the urban, so [the store] had to have an urban flair and flavor. I think we pulled that off while not losing the warmth and the charm that Woodlands has been known for.”

Design Challenges While Santa and his team were involved from the beginning in the store’s buildout, the design was not without its issues. “We just had a raw shell; it was a blank canvas,” he notes. “That’s the good news. The bad news was it was kind of a funky layout.” Store designers had to contend with 12 concrete pillars running through the space that hold up the building. Most of the store is located under the eight-story wing of the complex, but a portion is part of the 42-story wing. 26

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The other challenge was that the space is long and fairly narrow. The store is located slightly below street level, necessitating a ramp for accessibility, which eats up fair amount of space. Additionally, the whole side of the store that fronts the street is all windows, which allows in a lot of natural light, but also limits what can be merchandised along that wall. Some of the pillars could be incorporated into the design of the departments to become less visible, while those that had to remain exposed were wrapped in wood to help soften all of the exposed steel and duct work of the industrial-looking space. The long footprint lent itself to lots of showcases displaying the store’s prepared and fresh food departments. The location dedicates most of its retail space to perishables. (All storage and refrigeration/freezer equipment is housed downstairs.) The overall aesthetic that Santa wanted to create was rooted in a subtle, pleasant shopping experience, and he paid close attention to the effects of the lighting on the textures that he chose to use, which include wood to soften the stainless steel, and tile on the walls in the prepared foods department. He also opted to forgo the wood floor that his two Marin County stores have in favor of a concrete floor in San Francisco for a more urban feel. The steel I-beams were kept exposed not only to add to the industrial, urban feel, but also to create a feeling of volume and height.

We’re about bringing the community together and trying to keep that element alive.” —Don Santa, founder/CEO


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STORE OF THE MONTH

Woodlands Market 203 Folsom St. San Francisco, CA 94105

Aug. 26, 2017 Grand opening

Size:

9,500

Total square footage

Selling Area:

8,000 Square Feet

5,500 SKUs 75 Employees

4 Checkouts Designers:

Commercial Design Systems Inc.; Rubber Design Perishables as Sales Driver

Santa consciously devoted less space to center store than to perishables because he anticipated that in the urban location, the “driver is definitely the prepared foods side and fresh produce.” A lot of the San Francisco customers don’t cook much, so the store offers a variety of house-made entrées to go, including pasta, salads, sushi, poké, sandwiches and soups. “We do everything from organic chicken to Mexican poké to sushi. Sushi has always been a strong category, and these guys do a really great job. But it’s been a better-than-expected representation of our sales as a percentage as it compares to our other stores,” Santa notes. “Soon we’ll have a ramen bar.” The store also boasts a salad bar, a hot bar and an olive bar. The first two are set up for all three dayparts: breakfast, lunch and dinner. Due to the urban location, the hot bar in San Francisco has really taken off, and the options and times that it’s stocked have expanded compared with the other two locations. In fact, an expanded hot bar is now in the remodeling plans for the flagship Kentfield store. 28

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Importance of Prepared Foods

Most of the prepared food department’s menu items are tried-and-true Woodlands Market favorites, but a variety of items rotate in and out on a monthly basis to keep the selection fresh. An off-site kitchen serves all three Woodlands locations, but leaves the more theatrical aspects of the


final prep to the store-level staff. “I think it was an important piece for us to become what we are,” Santa observes. “While we still bake and do some cooking on-site, we do all of the takeout, packaged stuff off-site.” About half of the company’s 350 total employees are in prepared foods. “It’s what defines us,” he adds. “It’s what has

been so successful for us in terms of what customer demands are. I mean, sometimes I feel like we’re selling time as much as we’re selling food. People have so much going on, they don’t have enough time to do it themselves, so they’re willing to pony up and have someone else do it for them … assuming they do it well. So that’s our job.” The city location offers more smaller-portion options PROGRESSIVE GROCER July 2018

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STORE OF THE MONTH

Woodlands Market

The store, which sits slightly below street level, features a wall of windows along the sidewalk, which required low merchandisers to allow the light to filter into the store.

alcohol took off a little bit more than the dairy, but dairy is more suburban-friendly,” he jokes. With the store’s close proximity to California wine country, Santa also plans to add a full wine bar to the store to replace the temporary station that’s currently in place.

City Versus County

and more to-go items than the Marin County stores, and the center store items also come in smaller sizes, with fewer family-size options available.

Focus on Private Label

While Woodlands may be a small independent, it still offers a selection of private label items, including olive oils, salad dressings, wines, bottled water and even skin care. The move into private label was precipitated by the relationships that Santa developed with manufacturers willing to work with the company’s recipes/formulas. “It’s been a great piece of what we do,” he notes. “It makes you a player and gives you a stake in the game, because the demands are such that we’re all jockeying for the same attention, the same dollar. What’s going to set you apart? What’s going to make you unique? We’ve been doing it on some level or another as long as I can remember.” Scale can be issue for independents when it comes to private label products, but Santa credits the company’s location in the culinarily rich Bay Area. “There are so many artisans out there that are super-great and relatively small; those are the guys we want to bring up,” Santa enthuses. “That’s kind of what we’re known for; we’re sort of a springboard for them.” He then rattles off a list of small manufacturers that identify Woodlands Market as their first retail store, which is something he takes great pride in: providing that impetus to other local businesses to allow them to grow and flourish. Tucked away in the back of the store is the alcohol department, which provides a higher percentage of sales in San Francisco than it does in the Marin County stores. However, security is a bigger issue, with many of the higher-end offerings merchandised in locked cabinets. Craft beer also is a bigger seller in the San Francisco location. “This has been a big category for us,” Santa notes. “I think there’s a more discrete palate for your micros.” Sales have done so well, in fact, that craft beers have crept into space that had originally been designated for dairy. “The 30

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Due to the limited amount of space, the store’s bakery department is supplied by the commissary — the two Marin County stores still do a lot of baking inhouse. The San Francisco store’s selection is made up of largely single-serve or smaller-portion options, and the total product line is about half of what’s offered at the suburban locations. Center store products are merchandised on a handful of shelves — the store offers small carts for customers to use, but it’s more easily shopped with carry baskets. Although the big brands are represented, most of the items are from smaller, more boutique-type companies. Since the store is in a new marketplace, Santa and his team rely heavily on customer feedback for what items to stock. “Our buyers are pretty astute, but our customers will be vocal about what they like or don’t like,” Santa notes. “We’re still massaging the product selection.”

Parking Perk

With its location in the heart of the city, most of Woodlands’ San Francisco customers walk to the store, but the store does offer free valet parking, a verifiable perk in a congested city. It remains to be seen whether this offering will help expand the store’s reach beyond the few city blocks most of its customers currently come from. The community outreach for the store’s opening last August extended just half a mile. Santa is hoping, however, that word will spread about the free parking; the store prominently markets its availability with signage at the store and a placard placed near the street. Santa has plans to try ecommerce and delivery this year at the San Francisco location, but he knows that his staff’s inherent knowledge and the store’s function as the center of the community are what will ultimately build his business. “It’s one of the reasons we’re so big on selling prepared foods,” he explains. “We’re about bringing the community together and trying to keep that element alive.”


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COVER STORY

71st Annual Consumer Expenditures Study

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A

By Jim Dudlicek, Bridget Goldschmidt, Randy Hofbauer and Kat Martin

year ago, when this report was about to go to press, the industry was quaking in its boots. Amazon had announced its plans to acquire Whole Foods Market, which, according to the din of punditry, spelled doom for supermarkets. Well, here we are a year later, still waiting for the Armageddon that’s never going to come, because the Amazon-Whole Foods deal surely signaled the end of traditional retailing, not necessarily traditional retailers. In fact, the union of ecommerce giant with organic grocer was a wake-up call for mainstream players — at least that’s how most of the analysts we spoke to described it — that if they haven’t already started changing the way they do business, they’d better start pronto or face extinction. “For most of the past year, the impact of Amazon’s acquisition of Whole Foods has been more psychological than physical,” Ken Fenyo, head of consumer markets at McKinsey Fast Growth, tells Progressive Grocer. “The deal has served as a pointed wake-up call to brick-and-mortar grocers that they could no longer ignore the threat of ecommerce generally, and Amazon specifically, to their businesses.” The focus continues to be on how consumers want to shop more than on what they’re shopping for; traditional grocers are working to create a seamless experience that’s consistent across brick-and-mortar, online, click-and-collect, and delivery. Consumer feedback reliably confirms that folks still embrace a physical store but want it on their terms. Amazon knows this, or it wouldn’t have acquired a grocery chain or launched its own physical stores — Amazon Go — that will be expanding

WAKING UP TO A NEW REALITY

As Amazonization proceeds, grocery retailers step up efforts to be their own disruptors.

PROGRESSIVE GROCER July 2018

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COVER STORY

71st Annual Consumer Expenditures Study

beyond the Seattle prototype to other U.S. cities. “It seems like the big idea is to use the physical Whole Foods stores as a distribution depot for Amazon Prime,” analyst David Diamond, president of David Diamond Associates, tells PG. “One year in, it seems more and more that the reason for the acquisition was not the Whole Foods business or its consumers, but the real estate footprint. The value of a store, with storage and refrigeration, very near many Amazon Prime customers, seems to be the driver of the acquisition.” Bill Bishop, co-founder and chief architect of Brick Meets Click, adds, “We now see that Amazon considers grocery to be only a stepping stone in their larger effort to build themselves into the lifestyle of more American households.”

Fresh Frenzy

Grocers seem to be heeding the call, and players from large chains to regionals to independents are waking up to the fact that they need to become their own disruptors and operate in continuous-innovation mode. Is it paying off? Total supermarket dollar sales in 2017 reached $408 billion, a decrease of about 1.3 percent from the prior year, according to data from Nielsen. The pressures of deflation have subsided, replaced by heightened price competition driven by big boxes like Walmart; hard discounters like Aldi (and its nemesis Lidl, now rising, amid setbacks in its original ambitious expansion plans in the eastern United States); and Amazon, keeping traditional grocers from returning to pre-deflationary price levels. Yet grocers remain confident in the future, expressing record-high levels of optimism in PG’s survey for its latest Annual Report, published in April. And after a decade of decline, the supermarket’s role as the consumer’s primary store has stabilized, according to the Food Marketing Institute’s U.S. Grocery Shopper Trends 2018 Report. While down from 67 percent in 2005, the primary designation has leveled off around 50 percent since 2015.

Methodology For the 2018 Consumer Expenditures Study, data has been provided via Nielsen’s Total Food View, an inclusive data universe of UPC and non-UPC products (which includes fresh random-weight retailer-assigned PLU [price lookup code] and system 2 sales volume). This reflects the total U.S. food market, which encompasses all grocery stores with $2 million or more in annual all commodity value (ACV), and includes natural food retailers and discount grocers. References to “fresh” or “perishable” foods encompass the inclusive view of UPC-coded and non-UPC products found throughout the store, but most predominantly in the produce, bakery, deli, meat and seafood departments. Due to changes in reporting, there may not be direct comparisons to last year’s Consumer Expenditures Study.

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Fresh Factors Nielsen reveals more key points in its latest Total Consumer Report, released this past June:

Ecommerce

is still maturing within food and beverage, but fresh perishables are an opportunity in stores today. In the past year, online food and beverage sales represented 13 percent of the overall dollar volume seen online. “Marketers looking for growth opportunities today shouldn’t be blind to the opportunities living in the perimeter of the store,” Nielsen advises. “Fresh and perishable foods generated sales nearly 14 times as high as all online food and beverage sales this year.”

On-the-go fresh produce fails to keep pace with clean snacking. Although Americans would rank eating more fruits and vegetables as the top factor for healthy eating, shoppers aren’t flocking to on-the-go fresh produce offerings as much as they are to other snack options. Pre-cut produce declined by nearly 2 percent in dollars and 6 percent in unit volume over the past year, but sales of salty snacks grew nearly $1 billion year over year. Indulgences can still be seen as “clean” to health-conscious consumers, however: “Clean-label products represented over one-third (35 percent) of salty snack dollars in the past year. Retailers and manufacturers that can demonstrate transparency through their labeling can capitalize on the wave of consumer interest around ‘responsible’ snacking. Consumers do have a sweet tooth, but the best way to capitalize on it is through the sweet spot of appealing to the smart snackers of today.”

Frozen burgers are still winning, but fresh is catching up and alternative protein growth remains strong. Frozen meat-based burgers have seen 2 percent dollar growth from last year, but this dynamic may be shifting. Fresh patties (up 8 percent) and prepared burgers from the deli section (up 15 percent) are both growing and asserting their importance to the future of the category. Growth opportunities are prominent within the alternative-protein sector, and this could be a new area of focus to reinvigorate the frozen-burger space. Within the past year, alternative-protein burgers have experienced dollar sales growth of nearly 21 percent. Although representing just 6 percent of the overall burger category, frozen alternative-protein burgers grew 17 percent year over year, which highlights an area for potential expansion.


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Supermarket Category Share of Sales Dollar Sales 4. 8% 1.4% 4 3. 2%

5 0.6%

Unit Sales 2 .7% 0.9% 4 4.1%

52 .3% Grocery Perishables General Merchandise Health & Beauty Care Source: Nielsen


COVER STORY

71st Annual Consumer Expenditures Study

Fresh and prepared foods still present the biggest opportunity for supermarkets, as Amazon continues to wrestle with the last-mile formula for perishables, which represent more than half of all supermarket sales, followed by grocery, at more than 40 percent, and nonfoods, in the single digits. To be sure, prepared foods showed the strongest growth for supermarkets last year, according to Nielsen, with a boost in dollar sales of nearly 140 percent. The latest Total Consumer Report from Nielsen, which leverages the company’s new Total Food View, shows that fresh categories within the United States are driving nearly 49 percent of all dollar growth across the fast-moving consumer goods (FMCG) brick-and-mortar landscape. In fact, within the past year, fresh and perishable foods generated more than $177 billion in sales. “Fresh plays a crucial role in driving consumer traffic and loyalty,” asserts John Tavolieri, Nielsen’s president of U.S. FMCG and retail, and chief technology and operations officer. “To win shoppers over, fresh has to be integral to a broader, more connected total-store approach that goes beyond category management.” Marketers must capitalize on adjacencies, reveal unseen competition and make cross-category connections to uncover business blind spots, Tavolieri says, thereby “enabling the ability to better meet the demands of today’s highly selective and savvy consumers who are looking to lead healthier lives.”

eter departments to better deliver need-state solutions, along with experiential marketing to make store trips less of a chore, is crucial to the future of traditional supermarkets. In other words, be less traditional and more disruptive.

Department Snapshot

Total supermarket sales across all grocery, perishable, general merchandise, and health and beauty categories topped $408 billion, according to Nielsen data. Among the categories showing strongest sales growth, in addition to the aforementioned prepared foods and combo meals: diet and nutrition products, up nearly 65 percent; wraps and tortilla shells, up 45 percent; packaged coffee, up 33 percent; and yogurt, up 16 percent. Among the laggards were frozen yogurt, down nearly 38 percent; toaster pastries, down 12 percent; and cheese, down more than 10 percent, along with a host of general merchandise categories. This further supports the conventional wisdom that fresh is grocery’s strength, and that continued investment in perim-

327 7 7 4 2 888-

PROGRESSIVE GROCER July 2018

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COVER STORY

71st Annual Consumer Expenditures Study

Top Categories by Percent Change in Dollar Sales

Bottom Categories by Percent Change in Dollar Sales

UNIT VOLUME (IN MILLIONS)

UNIT PERCENT CHANGE FROM YEAR AGO

139.5%

10.15

93.9%

68.9

56.84

81.6

Computer/Printer Accessories

12.93

64.8

5.05

85.3

Nuts and Seeds

Wraps and Tortilla Shells

55.94

45.5

31.51

38.5

Candles and Candle Accessories

Packaged Coffee

11.98

33.0

1.45

25.9

Yogurt

11.54

16.0

6.19

3.5

Sweet Goods

10.89

13.8

5.63

18.6

Water Treatment

77.29

10.2

12.48

4.2

Combination Packs

Snack and Variety Packs

343.82

10.0

85.66

8.1

Fully Cooked Meat

962.95

8.8

188.82

7.8

DOLLAR SALES ($ IN MILLIONS)

DOLLAR PERCENT CHANGE YEAR AGO

Prepared Foods

$36.32

Meal Combos

153.44

Diet and Nutrition

DOLLAR SALES ($ IN MILLIONS)

DOLLAR PERCENT CHANGE YEAR AGO

$14.68

Yogurt (frozen)

UNIT VOLUME (IN MILLIONS)

UNIT PERCENT CHANGE FROM YEAR AGO

-37.8%

5.41

-46.4%

82.56

-22.1

3.36

-20.7

136.96

-18.4

30.28

-14.6

69.98

-15.8

40.92

-7.5

Baby Treatments

11.78

-15.4

1.72

-18.1

Ice Melt

29.93

-15.1

5.84

-15.5

184.73

-15.0

15.04

-13.7

12.51

-11.9

1.40

-7.6

Toaster Pastries

105.12

-11.9

45.14

-12.9

Cheese

142.56

-10.9

38.38

-14.8

Electronics

Ranked by percent change in dollar sales. Misc. categories and those with sales of less than $10 million are not included.

Penetration of Categories by Retail Channel MASS EXCLUDING SUPERCENTERS

SUPERCENTERS

WAREHOUSE CLUBS

CONVENIENCE / GAS

ALL OTHER OUTLETS

5.6

5.3

19.9

12.5

4.3

24.0

9.8

7.9

11.2

24.5

6.3

0.2

8.2

2.1

0.9

4.2

30.8

12.8

1.1

4.3

95.9

17.2

13.5

24.1

60.8

37.9

8.6

21.3

76.9

3.6

1.2

7.8

36.4

23.4

2.6

7.1

99.1

93.9

16.8

8.2

18.6

55.4

35.6

4.2

15.3

98.9

69.4

46.9

25.6

39.1

65.7

27.9

2.3

69.9

ALL OUTLETS

SUPERMARKET

Alcohol

62.7

46.3

1.9

Baby Care

52.1

24.8

Bakery

72.9

53.5

Dairy

99.7

Deli

90.0

Frozen Foods General Merchandise

CATEGORY

Grocery

DOLLAR STORES DRUG STORES

100.0

97.7

53.5

50.1

45.0

71.1

49.2

23.0

63.3

Health & Beauty Care

99.7

79.9

44.3

58.7

40.9

67.0

35.8

2.5

53.1

Household Care

99.7

85.4

48.5

28.8

36.2

63.9

39.8

1.7

54.1

Meat

96.6

88.9

7.5

2.6

12.4

48.0

25.5

1.1

11.5

Pet Care

71.1

45.9

16.0

5.8

17.4

39.6

14.4

0.9

39.9

Produce

97.5

91.9

5.0

1.3

12.9

50.9

35.5

1.7

14.4

Tobacco and Tobacco Alternatives

32.2

11.8

8.5

4.0

2.4

10.3

1.1

8.4

7.7

Includes all buyers for 52 weeks ending Dec. 30, 2017 Source: Nielsen

38

progressivegrocer.com


Sometimes a fresh perspective is the best ingredient. To Our Valued Customers and Partners,

For nearly 150 years, consumers have welcomed Campbell into their homes. With annualized sales of approximately $10 billion (including our recent acquisitions), our portfolio includes iconic brands that are found in nearly every aisle and on every kitchen table around the world.

Today, the entrepreneurial spirit that began with our founders is being reinvigorated with a fresh perspective. As eating habits and food preferences evolve, Campbell stands ready to serve new generations of consumers with everything from our namesake soups, simple meals and beverages to new organic soups, delicious snacks and packaged fresh foods.

Our industry is changing and so is Campbell…for the better. We’re reevaluating and updating our portfolio to accelerate our growth and yours. What’s not changing is our dedication to our customers, employees and consumers. Likewise, our commitment to sustainability, transparency and making a difference in our communities remains steadfast.

Campbell was a great company yesterday. It’s a great company today. And Campbell will be a great company tomorrow. The entire Campbell organization is excited about the opportunities that lie ahead, and we’re ready to strengthen our partnership with you.

Kindest regards,

Keith McLoughlin Interim CEO Campbell Soup Company


COVER STORY

71st Annual Consumer Expenditures Study 2017 Supermarket Dollar Sales & Unit Volume CATEGORY

TOTAL GROCERY ALCOHOL Alcoholic Beverage Mixers Beer, Flavored Malt Beverages, Cider Spirits Wine GROCERY-FOOD Flavored malt beverages, tequila and whiskey are among key growth segments in the spirits category.

Bagels

$176,191.54

-1.3%

65,089.26

-2.8%

$23,594.65

0.5%

2,385.74

-1.0%

215.58

1.2

48.70

-0.5

11,052.18

-0.7

1,215.56

-2.6

4,010.23

0.8

273.44

2.7

8,316.66

2.0

848.04

0.1

$124,936.86

-1.6%

55,406.28

-2.7%

584.42

0.0

196.60

-0.5

1,412.05

-3.9

907.80

-6.1

Baking Staples

2,698.37

-3.7

1,043.12

-4.0

218.58

0.9

78.38

-3.3

Baking Supplies Beans

651.00

-2.7

635.47

-2.5

1,154.07

-5.0

711.54

-8.1

24,357.85

-0.7

11,436.99

-1.7

Bread

5,626.93

-2.7

2,308.49

-3.9

Candy, Gum, Mints

6,066.86

0.7

3,096.00

0.4

Cereal and Granola

6,722.57

-4.6

2,248.74

-4.5

Cheese

142.56

-10.9

38.38

-14.8

Coating Mixes and Crumbs

263.02

-2.2

125.71

-4.4

Beverages

Combination Packs

7.05

-9.7

0.61

-24.4

Condiments

2,646.57

-2.6

1,050.09

-3.2

Cookies and Crackers

6,705.36

-2.9

2,566.70

-3.4

Cooking Wine and Vinegar

443.84

8.3

151.14

2.9

Creams and Nondairy Creamers

366.76

-1.1

117.79

0.4

Dessert Toppings

128.82

-7.2

52.13

-7.8

Desserts

438.42

-4.6

269.10

-5.3

Diet and Nutrition

1,743.82

-0.2

535.20

-2.0

Dips/Spreads

1,268.02

-1.9

448.39

-2.6

2.34

-11.3

0.58

-14.7

360.97

-1.9

181.29

-2.7

1.28

55.4

0.19

73.3

2,414.67

3.0

879.97

-1.0

Dough and Batter Products Dry Salad and Potato Toppings Eggs Extracts, Herbs, Spices and Seasonings Fruit

2,099.73

-2.2

972.92

-3.1

Fruit Snacks

438.69

-2.6

190.02

-5.1

Fully Cooked Meat

334.51

-3.2

167.05

-4.1

Marshmallows

128.44

-3.9

86.70

-4.3

Meal Combos

129.10

-3.1

69.61

-2.3

Milk Products

209.00

-1.7

86.47

-4.2

Milk/Dairy Alternatives

149.86

-1.3

58.29

-3.3

1,988.26

-1.9

595.82

-4.0

Nut Butters, Jam, Jellies

40

UNIT VOLUME (IN MILLIONS)

UNIT PERCENT CHANGE FROM YEAR AGO

Baking Mixes

Beverage Enhancers

Hard-boiled eggs are emerging as a snacking item as consumers seek more protein-rich options.

DOLLAR SALES ($ IN MILLIONS)

DOLLAR PERCENT CHANGE FROM YEAR AGO

progressivegrocer.com


UNCOMMON FLAVORS OF EUROPE Asiago PDO | Speck Alto Adige PGI | Pecorino Romano PDO

D E L I C I O U S LY I TA L I A N The content of this Advertisement represents the views of the author only and is his/her sole responsibility. The European Commission does not accept any responsibility for any use that may be made of the information it contains.

Uncommonly delicious cheeses and lightly-smoked air-cured ham come from the pristine mountains and verdant pastures of Italy. Count on European origin and quality for unique flavor far beyond imitation.

UncommonEurope.eu

THE EUROPEAN UNION SUPPORTS CAMPAIGNS THAT PROMOTE HIGH QUALITY AGRICULTURAL PRODUCTS


COVER STORY

71st Annual Consumer Expenditures Study 2017 Supermarket Dollar Sales & Unit Volume CATEGORY

Nuts are among the traditional snack items being enhanced with probiotics to boost their wellness value.

Nuts and Seeds Oils, Butter, Margarine Spreads, Substitutes Olives, Capers, Pickled and Marinated Vegetables Packaged Coffee Packaged Tea Pancake, Waffle, French Toast Toppings Pasta, Rice, Dry Beans and Grains Performance Nutrition Pizza Prepared Foods Processed Meat

DOLLAR SALES ($ IN MILLIONS)

DOLLAR PERCENT CHANGE FROM YEAR AGO

UNIT VOLUME (IN MILLIONS)

UNIT PERCENT CHANGE FROM YEAR AGO

1,953.32

2.7

494.51

1.4

2,264.36

-2.5

555.40

-6.1

1,145.37

-2.1

497.93

-2.7

5,009.14

-1.1

763.45

-2.5

805.25

-4.1

241.10

-4.1

450.72

-3.3

123.27

-5.1

2,648.63

-3.6

1,516.40

-3.2

650.62

1.6

244.01

-1.3

95.74

-7.0

24.01

-6.7

7,980.07

-2.1

5,306.37

-3.2

92.86

0.2

119.90

-1.6

Rolls and Buns

2,403.93

-1.5

1,075.91

-2.8

Salad Dressing

1,332.82

-4.0

545.94

-4.9

11,722.49

0.2

4,494.87

-1.0

616.14

-0.9

606.19

-1.7

Salty Snacks Sauce and Seasoning Mixes

Professional Services

We Deliver People. Performance. Profitability. When you think about the future of your business: ■ Are your people growing your sales? ■ Who will fill your shoes? ■ Do you have top performers? ■ Are you maximizing profitability?

SUPERALU UNIVERSITY SUPERVALU University offers employee development and skill-specific training that save you money by reducing turn-over and developing the talent you have. Your employees will benchmark, connect, and learn from other future leaders in the industry. And come back immediately driving profit to your bottom line.

SPACE IS LIMITED - ENROLL TODAY! FALL LEADERSHIP DEVELOPMENT: Supermarket Director’s Institute I starts Aug 13 Department Manager Academy I starts Sept 5 CONTACT: sv.university@supervalu.com go.supervalu.com/SVUniversity-MGA

42

progressivegrocer.com


CATEGORY

DOLLAR SALES ($ IN MILLIONS)

DOLLAR PERCENT CHANGE FROM YEAR AGO

UNIT VOLUME (IN MILLIONS)

UNIT PERCENT CHANGE FROM YEAR AGO

Sauces, Gravies, Marinades

3,689.94

-1.1

1,973.81

-2.9

Seafood

1,277.68

-0.6

787.13

-3.0

343.82

10.0

85.66

8.1

Snack and Variety Packs Sugar and Sweeteners

1,618.78

-4.7

561.21

-5.9

Sweet Goods

315.11

-0.7

96.06

-4.5

Sweet Snacks

2,266.43

-1.9

1,023.40

-2.4

Toaster Patries

358.15

-7.9

153.81

-10.3

Vegetables

2,372.54

-4.3

2,114.03

-4.7

Wraps and Tortilla Shells

1,607.62

0.4

688.44

-0.8

11.54

16.0

6.19

3.5

Yogurt GROCERY-NONFOOD

$27,660.03

-1.9%

7,297.24

While Greek-style yogurts have been dominating the dairy case, plantbased alternatives are coming on strong.

-4.2%

Baking Supplies

48.16

6.8

13.54

6.0

Bathroom Accessories

32.29

-6.0

5.92

-3.2

Dish Care

1,007.86

-1.9

287.63

-5.7

Food Storage

1,207.58

-3.7

435.77

-3.9

The Baker’s Choice. The all-round artisan deck oven. Your next MIWE condo:  Perfect for the complete range of baked goods including breads, pastries, pizzas  Various sizes to choose from to hold one, two, three or 4 pans capacity  Simple and easy to operate  Quick and easy to clean

Contact Ben (CAN): b.garisto @ miwe.com or Harry (US): miweusa @ aol.com www.miwe.com /condo

PROGRESSIVE GROCER July 2018

43


COVER STORY

71st Annual Consumer Expenditures Study 2017 Supermarket Dollar Sales & Unit Volume

CATEGORY

Home Air Fresheners

765.28

1.4

254.39

-1.4

2,035.15

-0.7

538.50

-2.4

Laundry Care

3,377.58

-1.0

648.65

-1.6

Paper and Plastics

8,045.89

-2.2

2,091.23

-4.4

217.77

-5.8

43.36

-5.7

Pet Food

5,488.79

-1.9

2,189.95

-5.7

Pet Supplies

1,003.28

0.0

143.75

-2.4

Pet Treatments

71.21

-2.8

8.58

-2.2

Tobacco Alternatives

91.44

3.3

5.07

4.8

108.42

-2.2

40.76

-4.7

4,159.33

-2.9

590.14

-3.7

Smoking Accessories Tobacco PERISHABLES BAKERY Bagels Bread Cereal and Granola Coating Mixes and Crumbs

-1.3%

77,235.58

-1.8%

$9,231.02

-1.1%

3,423.57

0.0%

185.10

-0.8

203.26

0.6

1,345.42

-4.6

556.80

-4.6

1.42

-2.8

0.34

2.3

1.06

8.4

0.54

4.6

1,163.60

0.3

307.75

0.3

Desserts

3,617.79

-1.6

640.37

-0.3

698.68

2.4

515.26

2.4

Meal Combos

16.61

-8.3

8.28

-37.3

Misc. Bakery

17.49

614.3

8.88

1193.0

526.14

1.9

195.25

0.2

1.13

7.8

0.63

4.2

Rolls and Buns

788.28

-3.5

650.62

1.4

Sweet Goods

812.36

-1.5

304.08

-2.4

55.94

45.5

31.51

38.5

Muffins Prepared Foods

Wraps and Tortilla Shells DAIRY

$44,380.80

Bagels

48.31

-8.6

27.80

-9.1

Baking Staples

15.75

-7.4

6.80

-4.1

4,924.65

-1.5

1,719.55

-2.2

58.89

3.8

21.63

0.5

11,310.81

-2.2

3,657.05

-3.6

2,621.13

3.1

844.22

0.0

Dessert Toppings

314.06

2.2

110.92

1.2

Desserts

460.76

1.8

211.71

-1.1

Dough and Batter Products

1,213.89

-3.6

560.65

-5.5

Eggs

3,511.33

-8.2

1,526.02

-3.4

Beverages Bread Cheese Creams and Nondairy Creamers

44

206,677.82

Cookies and Crackers Doughnuts

Emphasis on clean labels is driving the increase in creams and nondairy coffee creamers.

UNIT VOLUME (IN MILLIONS)

UNIT PERCENT CHANGE FROM YEAR AGO

Household Cleaners and Supplies

Pest Control

Pet supply sales mirror human trends with a focus on health and wellness, especially items with natural claims.

DOLLAR SALES ($ IN MILLIONS)

DOLLAR PERCENT CHANGE FROM YEAR AGO

progressivegrocer.com

-2.4%

17,119.50

-4.6%


Innovation is Brewing in Your Coffee Aisle

Introducing JAVA HOUSE® Cold Brew COFFEE Pods from Heartland Food Products Group Our revolutionary, dual-use liquid pods can be enjoyed hot or cold, combining authentic taste with an unrivaled experience. We keep it 100% authentic by using time-honored techniques and just two ingredients – Arabica coffee beans and cold water – and slowly steep grounds for 12 hours in handcrafted small batches. This innovation is the first of its kind and will provide even more variety and options for single-cup coffee users looking for a smoother coffee with less acidity.

© 2018 Heartland Consumer Products LLC. All rights reserved.


COVER STORY

71st Annual Consumer Expenditures Study 2017 Supermarket Dollar Sales & Unit Volume

CATEGORY

8,003.89

-4.6

2,867.44

-5.5

Milk/Dairy Alternatives Oils, Butter, Margarine Spreads,Substitutes Olives, Capers, Pickled and Marinated Vegetables

1,007.26

2.5

308.58

1.9

2,749.28

-1.0

857.71

-4.9

178.91

1.8

21.19

-0.5

11.98

33.0

1.45

25.9

Pasta, Rice, Dry Beans and Grains

325.10

7.8

78.98

4.4

Prepared Foods

1,448.03

5.3

392.63

3.0

Processed Meat

1.02

-22.1

0.15

-3.5

Rolls and Buns

5.95

17.6

2.10

11.6

854.02

-1.7

437.63

-2.6

10.89

13.8

5.63

18.6

145.40

-5.2

65.97

-6.5

5,159.49

-3.2

3,393.69

-9.6

0.5%

5,331.89

1.7%

Sour Cream Products Sweet Goods Wraps and Tortilla Shells Yogurt DELI Beverages

51.21

-7.3

11.00

-9.9

-3.7

634.22

-2.2

158.00

6.4

17.28

6.8

Condiments

62.28

-0.4

20.06

-2.6

Desserts

96.48

-6.5

32.60

-5.4

Dips/Spreads

1,864.02

2.7

522.47

-0.2

Fully Cooked Meat

4,471.06

-1.8

908.32

-0.7

Lunchmeat

4,394.95

-1.1

633.08

3.3

Meal Combos

1,122.81

8.0

579.58

8.0

63.15

61.1

9.87

56.5

3.92

26.1

1.91

20.6

191.27

1.9

53.42

1.2

Combination Packs

Misc. Deli Oils, Butter, Margarine Spreads, Substitutes Olives, Capers, Pickled and Marinated Vegetables Pizza

311.34

-6.1

63.29

-3.9

Prepared Foods

8,600.97

3.0

1,807.77

2.7

Processed Meat

5.83

25.0

1.92

9.8

126.82

6.2

33.81

3.0

3.59

54.7

1.29

63.8

Sauces, Gravies, Marinades

46

$25,069.01 3,541.31

Cheese

The majority (60 percent) of U.S. consumers purchase prepared foods that are intended to be eaten cold, according to a PG consumer survey.

UNIT VOLUME (IN MILLIONS)

UNIT PERCENT CHANGE FROM YEAR AGO

Milk Products

Packaged Coffee

At-home brewing is the dominant method for coffee consumption in the United States.

DOLLAR SALES ($ IN MILLIONS)

DOLLAR PERCENT CHANGE FROM YEAR AGO

Sour Cream Products FROZEN FOODS

30,972.46

-0.6%

9,206.40

-2.9%

Bagels

13.18

-10.8

6.11

-13.8

Baking Staples

69.81

-4.4

27.12

-5.4

Beans

110.97

-6.9

53.89

-8.3

Beverages

151.87

-10.0

85.48

-11.4

Bread

377.35

-3.0

153.89

-6.6

Condiments

1.08

-29.7

0.16

-15.5

Cookies and Crackers

1.25

-45.9

0.27

-43.1

progressivegrocer.com


ADD SOME SIZZLE TO YOUR SHOPPERS’ SUMMER with Treasure Cave® Cheese and Food Network Chef Eddie Jackson! Treasure Cave® Cheese and Eddie Jackson are diving into summer with recipes and a hot summer promotion that’s sure to grab your shoppers’ attention and appetites! So stock up and stay stocked all summer long for sizzling sales and satisfied shoppers!

For recipes and more, visit TreasureCaveCheese.com © 2018 Saputo Cheese USA Inc. All rights reserved. Treasure Cave® is a registered trademark owned by Saputo Cheese USA Inc.


COVER STORY

71st Annual Consumer Expenditures Study 2017 Supermarket Dollar Sales & Unit Volume CATEGORY

Creams and Nondairy Creamers Dessert Toppings Desserts Dips/Spreads Dough and Batter Products

1.20

-14.5

0.51

-16.1

204.80

-4.6

121.74

-9.1

7,719.35

0.4

2,087.17

-1.7

10.68

-1.0

3.01

3.6

210.70

-6.4

59.42

-7.2

7.17

22.0

1.27

27.4

Extracts, Herbs, Spices and Seasonings

1.82

-12.5

0.64

-25.1

1,205.54

-6.8

184.24

-5.1

648.18

-3.9

140.15

-7.2

Fruit Fully Cooked Meat Ice Meal Combos

1,717.31

0.0

304.17

-0.5

543.76

-3.3

205.82

-5.1

1.47

-15.1

0.43

-15.4

191.20

-2.4

58.56

-3.0

Pizza

2,735.47

-0.5

795.34

-1.9

Prepared Foods

9,764.81

-0.1

3,217.60

-2.9

Processed Meat

454.81

0.3

167.70

-1.7

Rolls and Buns

108.43

0.8

33.45

-0.6

Pasta, Rice, Dry Beans & Grains

Sauces, Gravies, Marinades

6.47

-5.4

1.78

-7.2

2,575.22

-0.1

330.05

-3.3

Sweet Goods

38.18

-5.8

10.19

-6.7

Sweet Snacks

7.03

33.4

1.73

39.9

Seafood

Toaster Pastries

105.12

-11.9

45.14

-12.9

1,971.08

1.2

1,103.01

-1.7

2.47

0.3

0.95

0.3

Yogurt

14.68

-37.8

5.41

-46.4

MEAT

$51,609.87

Vegetables Wraps and Tortilla Shells

Fresh Meat

-2.4%

14,357.62

-0.3%

32,764.71

-2.9

9,592.23

962.95

8.8

188.82

7.8

Ham

1,227.48

-6.3

508.86

-0.2

Lunchmeat

3,744.79

-4.0

1,099.89

-4.5

Fully Cooked Meat

Misc. Meat

1.2

71.91

14.6

12.95

7.0

Processed Meat

8,486.63

-0.4

2,340.81

-3.4

Seafood

4,351.40

-2.1%

614.06

-5.2

PRODUCE

$45,414.66

-0.4%

27,796.60

-1.4%

Dry Salad and Potato Toppings

2.66

-6.6

0.79

-0.4

Misc. Produce

6.52

118.3

4.33

206.6

Baking Staples

7.42

-0.5

2.07

5.4

12.93

64.8

5.05

85.3

Prepared Foods

36.32

139.5

10.15

93.9

Nuts and Seeds

136.96

-18.4

30.28

-14.6

Diet and Nutrition

48

UNIT VOLUME (IN MILLIONS)

UNIT PERCENT CHANGE FROM YEAR AGO

Doughnuts

Fresh Meat

High-quality meat is among the top reasons that consumers cite when selecting a primary grocery store.

DOLLAR SALES ($ IN MILLIONS)

DOLLAR PERCENT CHANGE FROM YEAR AGO

progressivegrocer.com


CATEGORY

DOLLAR SALES ($ IN MILLIONS)

DOLLAR PERCENT CHANGE FROM YEAR AGO

UNIT VOLUME (IN MILLIONS)

UNIT PERCENT CHANGE FROM YEAR AGO

Meal Combos

153.44

68.9

56.84

81.6

Salad Dressing Extracts, Herbs, Spices and Seasonings Vegetables Fruits

311.06

0.5

89.89

0.1

864.33

2.1

581.10

-0.7

21,881.86 22,001.16

-0.7 -0.4

12,732.53 14,283.57

-1.3 -1.6

GENERAL MERCHANDISE

$5,579.33

-3.3%

1,287.62

-5.0%

Appliances

349.61

-0.8

22.73

-2.3

Automotive Addititves

111.37

-3.3

22.83

-5.4

Automotive Air Fresheners

50.05

3.8

15.51

-0.4

Automotive Cleaners and Supplies

28.57

-0.1

6.39

1.0

Baking Supplies

121.98

0.5

55.51

0.4

Batteries and Accessories

570.64

3.4

91.91

-3.0

69.98

-15.8

40.92

-7.5

3.15

16.0

0.71

10.7

Candles and Candle Accessories Combination Packs Computer/Printer Accessories

82.56

-22.1

3.36

-20.7

Electronics

184.73

-15.0

15.04

-13.7

Food and Beverage Containers

389.46

-3.5

84.28

-3.3

39.45

3.4

2.02

3.2

Hair Removal Home, School, Office Supplies

353.45

1.6

162.36

-0.7

Household Maintenance

119.46

-1.5

37.49

-5.9

29.93

-15.1

5.84

-15.5

1,077.57

-1.5

276.50

-1.7

58.88

-5.4

10.26

-6.1

324.17

-6.5

62.59

-8.8

2.26

-5.2

0.31

-10.1

Outdoor Recreation

611.73

-2.5

100.15

-4.1

Paper and Plastics

30.30

-8.3

22.01

-14.7

122.56

-4.0

52.85

-8.3

26.26

-1.7

7.43

-3.6

388.00

-10.4

78.69

-19.1

22.74

-9.6

6.05

-11.0

Ice Melt Kitchen Accessories Lawn Care Lighting Outdoor Cleaners and Supplies

Party Supplies Pest Control Reading and Hobby Shoe Care Storage and Space Management

110.63

-3.3

22.73

-2.3

Trash and Recycling

16.03

5.0

1.83

2.0

Water Filtration Products

53.46

-6.8

3.61

-8.5

Water Treatment

77.29

10.2

12.48

4.2

153.06

-6.6

63.23

-6.9

Writing Tools and Supplies

Just 13 percent of consumers said they did their backto-school shopping at supermarkets in 2017, down 8 percent from the prior year, a Deloitte survey found.

PROGRESSIVE GROCER July 2018

49


COVER STORY

71st Annual Consumer Expenditures Study 2017 Supermarket Dollar Sales & Unit Volume

CATEGORY

DOLLAR SALES ($ IN MILLIONS)

DOLLAR PERCENT CHANGE FROM YEAR AGO

HEALTH & BEAUTY CARE

$19,600.70

-0.3%

3,982.12

-2.1%

Adult Incontinence

353.42

3.3

36.03

1.4

Baby Accessories

54.03

-4.3

8.10

-3.8

Baby Bath

75.20

2.6

18.81

-1.3

1,124.11

-4.3

159.02

0.7

814.33

-1.5

536.95

-4.6

79.26

-2.9

17.88

-3.9

1,773.76

-4.6

103.66

-7.7

Baby Diapering Needs Baby Feeding Baby Feeding Supplies Baby Formula and Children’s Nutritional Beverages Baby Lotion

20.09

6.6

3.72

5.2

Baby Treatments

11.78

-15.4

1.72

-18.1

Bath and Shower

1,256.40

0.8

407.17

-1.5

6.16

-8.1

0.72

-8.4

Breastfeeding Combination Packs North America alone accounts for a 37 percent revenue share of the global shower segment, according to Fact.MR.

UNIT VOLUME (IN MILLIONS)

UNIT PERCENT CHANGE FROM YEAR AGO

12.51

-11.9

1.40

-7.6

Cosmetics and Nail Grooming

838.11

-2.5

190.94

-3.4

Deodorants

615.94

0.6

170.13

-2.4

Ear Care

12.15

3.5

1.82

1.7

Eye Care

340.72

1.1

42.84

-0.2

Facial Skin Care

465.27

1.3

65.19

2.2

Feminine Care

689.97

-1.6

150.21

-3.5

First Aid

432.43

0.1

124.38

-0.8

Foot Care

153.46

-1.9

24.61

-2.7

Fragrances

72.29

-8.0

11.99

-10.6

GI Care

921.29

0.0

135.29

-1.1

1,841.15

-0.7

409.39

-3.9

Hair Removal

615.33

-8.0

106.43

-4.7

Health and Beauty Lotions

382.02

2.6

67.89

1.2 1.6

Hair Care

Itch Relief

10.66

3.7

1.36

118.30

0.8

14.02

0.7

1,799.92

0.5

506.36

-1.9

Pain Relief

963.35

1.8

162.80

-1.0

Sexual Health

150.04

-2.5

16.81

-3.8

97.22

0.1

14.86

-2.7

214.02

-0.2

26.05

-0.6

6.29

30.5

1.81

26.0

Upper Respiratory

1,749.62

6.0

260.32

2.9

Vitamins and Supplements

1,530.10

2.9

181.44

0.5

Medical Accessories Oral Hygiene

Sleeping and Alertness Aids Sun Care Travel Sets

TOTAL SUPERMARKET

$408,049.39

-1.3%

147,594.58

All “totals” (e.g., Total Grocery) reflect the sum of cateories depicted within this chart. Source: Nielsen Strategic Planner, Retail Measurement, Total U.S. food stores, 52 weeks ending Dec.30, 2017 UPC-coded; Nielsen FreshFacts, Total U.S., 2017, Total Perishables Database; Progressive Grocer Market Research, 2018

50

progressivegrocer.com

-2.3%


The ART OF  Merchandising

®

Secrets on How to Create Your Retail Masterpiece


Create Your Retail Masterpiece


A R T

T H E

O F

M E R C H A N D I S I N G

®

Create Your Own Merchandising Masterpiece with Trion Fixtures

Exciting Cross Sells

For the Bulky Stuff

Mini Dual Lane Trays

Base Deck Fencing

This mini tray leads to maximum revenue, because it allows complimentary items to be featured together. Dual lanes adjust to fit narrow merchandise sizes as small as 1 3⁄4 ". Each lane features a separate pusher paddle to keep products forwarded and faced. Feature items of different widths via asymmetric lane configurations. Cross merchandise a variety of products with ease. Trays install without tools and lift out for quick restocking or product rotation. Full line includes standard and oversize trays, and display, scan and pusher hooks.

This bottom is tops for displaying heavy, bulky, or hard-to-fit items. Display them attractively and neatly using front fencing and dividers to customize the display space and create unique presentations of similar or related items. This cross-selling approach makes shopping easier for the customer and more profitable for you. Select from a range of other Trion outfitting to maximize selling space from the base

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deck to the top shelf and beyond.

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An Open and Shut Case

Flip-Scan Hooks ®

Over 450 Profiles

Clear Scan Label Holders ®

Storewide solutions for any labeling need. Available in a variety of profiles (shapes), these bright, clear label holders are easily positioned in all standard C-channel configurations, as well as displays incorporating metal, glass, wood, wire baskets, wire shelving, wire fencing, and scanning hooks. Plain paper labels drop in behind a clear flexible PVC front, allowing labels to be changed quickly and inexpensively without messy adhesive backing. Adhesive label holders and strips also available if that is your need. Save time, increase visibility, and boost sales with this storewide labeling system. Cooler capable, color, and built-in promo

Flip-Scan® hooks are an open and shut case for ease of use. The articulated label holder lifts up and out of the way for easy product access, then falls back to vertical for viewing product and price info. Our unique label holder flexes open so plain paper labels can be inserted effortlessly. Available with short label holders or full length label strips and constructed of long-life materials, these durable, attractive scan hooks can outfit all display surfaces, including pegboard, slatwall, grid, crossbar, and corrugated. Fully compatible with the Clear Scan® Label Holder System for C-channel, shelf edge, wire basket, and refrigerated areas storewide.

Clip label holders and strips available.

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Create Your Retail Masterpiece


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Create Your Own Merchandising Masterpiece with Trion Fixtures

Staging Areas Built In

Get Creative

Pin-Stop Waterfall Hooks

Literature Holder

These strong, downward-canted waterfall hooks lift more weights than a personal trainer. Ready for a workout, Trion Industries’ hooks display heavy products, like free weights in multiple sizes, with both sales and safety in mind. Your customers can easily browse the merchandise, which is held in place by built-in pins to keep product from shifting or falling. Exercise your opportunity to cross-sell related products and keep your bottom line in shape! Of course these waterfall utility hooks are perfect for more than hand

Mirror, mirror on the wall. You can be the most difficult item to display of all. Clever merchandisers use large literature holders for three-dimensional, awkwardly sized items like mirrors, framed art, clocks, and more. Available in a range of sizes, gauges, and weights, Trion’s large literature holders can be spaced horizontally to accommodate all manner of product sizes.

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weights. Give them a try.

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Place a Label Anywhere

Scan-It Scan Arms TM

Sign Up!

Versatile Wall Tags What do you want your customers to know? Want to promote great prices or unique product features? Add wall tags to your displays faster than you can say “sign up!” Wall tags allow you to mount your product and price separately on vertical display surfaces, for cleaner

Scan-It do this? Scan-It do that? Scan-Its do it all! Scan-Its make it easy to label and price products, regardless of plan-o-gram fixture layout, unusual product shape, or tightly spaced displays. When you need a flexible aid to label and price items quickly and conveniently, turn to this Swiss Army knife of outfitting. Scan-ItTM is available in a range of back plate sizes and label holder configurations.

overall presentation.

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Create Your Retail Masterpiece


T H E

A R T

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M E R C H A N D I S I N G

®

Create Your Own Merchandising Masterpiece with Trion Fixtures

Unlimited configuration

Expandable Wire Tray

TM

Product offerings come in different sizes, so it makes sense that displays should come in different sizes, too. That’s why Trion created the WonderBar ® Expandable Wire Tray System. We included every feature you would want if you created it yourself: powder-coated galvanized wire that stands up to harsh environments; adjustable width; easy custom configuration; rail mount and freestanding units; wire or clear acrylic product stops. EWT mounts on pegboard, slatwall, gondola shelf, table

Finish the Job

Base Deck Fencing Bin there, organized that! Trion’s deck fencing helps you bin small, large, bulk or packaged items while keeping them accessible to customers. Customize your display to create closed-front or open-front compartments using straight or offset front fence, then add our convenient labeling systems to finish the job right.

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top and cooler.

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Yeah, We’ve Got That Announce Product Presence

Extruded Sign Holders Think of these extruded signs as a GPS for your retail setting. Quickly guide customers to the products they want and need with these versatile sign holders. Plan your customer’s routes, then slide in signs when you’re ready. Creative merchandisers might also use these sign holders for monthly or weekly specials, buy-one-get-one offers, specialized category definition (think gluten free, organic, fair trade, etc.), or promotion of in-store loyalty cards. A variety of mounting options are available including hooks, push pin, and foam tape. The

Slatwall Hooks

Let’s review your wish list of slatwall hook features: flat back plate base? Trion’s got it. Even load distribution? Check. Customizable with Clear Scan Labels? Yep. Flip-front or metal plate Label Holder, gotcha. Like your varied products, Trion’s Slatwall Hooks are offered in a range of standard, medium, heavy, and extra heavy gauges. Our hooks fit all industry standard slatwall slots, and many work with slot inserts. Call for a sample to check the fit with your design.

opportunities for use are endless.

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Create Your Retail Masterpiece


T H E

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M E R C H A N D I S I N G

®

Create Your Own Merchandising Masterpiece with Trion Fixtures

Think Beyond the Obvious

For Base Deck and More

Literature Holder

Clear Dividers & Stops

Don’t judge a literature holder by its cover. . . these coated-wire multi-taskers can be used to accommodate anything that is best displayed upright. Rather than stacking that merchandise flat on shelves, show off features and benefits where customers can fully view the entire item. Creatively deploy these to sell almost anything, including games, mirrors, frames, clocks, puzzles, life vests, baking sheets, and — for

Truth or dare? The truth is that Trion’s ShelfWorks® Clear Dividers and Product Stops are up to any dare. Choose straight, reversible, or interlocking-front clear dividers to align, stack, divide, and organize almost any product you want to sell. Another truth is Trion’s products are durable, high-quality items that will work as hard as you do. Try to find better merchandising solutions. We double-dog

traditionalists —even product literature.

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dare you.

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ICC’s and Shams

Best Selection Guaranteed

Holders & Strips on Hooks You’ll be hooked on these Clear Scan Label Holders when you see how easily they accommodate drop-in plain paper labels. Promote product and price or features and benefits so customers can choose easily. . . and so can you! Make your selection of Clear Scan Label Holders from a variety of profiles, colors and lengths, then add them to hooks with flip-front or FISH-TipTM mounts. Skip the mess of sticky adhesive labels and trade up to easy-to-use plain paper ®

Inventory Control Keep those carded products tidy and easy to see when you add inventory control clips (ICCs) to your standard, medium, heavy or extra heavy wire hook displays. These handy clips keep merchandise faced and double as a marker to let you know when it’s time to reorder or re-stock products. Available in Rabbit Ear ICC and circular Sham configurations. Or order with half-moon ATICC Inventory control clips already pre-mounted on the hook for you.

label holder systems.

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Create Your Retail Masterpiece


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M E R C H A N D I S I N G

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Create Your Own Merchandising Masterpiece with Trion Fixtures

The Problem Solver

When Visibility is Your Goal

The number of products you can effectively, attractively merchandise in these baskets is, well, endless, as is the length and uses. Mount level or in gravity-feed mode from pegboard or slatwall, or place on shelves or table tops. Pair the baskets with hang tags, efficiently displaying both products and prices. Customize your baskets with handy dividers to create exactly the

The way to profits is clear when customers can spot and browse neatly displayed, upscale merchandise. Adjustable, multi-functional dividers allow you to customize depth and change the width of displays just as fast as new products are delivered. Sturdy, clear presentation keeps products looking their best, highlighting the colors, options, sizes, quality, and billboarding brands. Trion’s Clear Acrylic Divider Systems are among the best looking

Clear Acrylic Dividers

Endless Baskets

compartmentalization you need.

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and adaptable merchandising systems.

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Fast and Easy

Attached-Back Hooks

TM

You read that right. These two-piece straight-entry hooks arrive already assembled – a dream come true for speeding labor intensive projects. Because the hooks are already assembled, you can display merchandise as quickly as you can say “profits.” Once installed, these hooks come apart easily, making merchandising changes in tight displays fast and easy. Reinforced to host even heavy items, these hooks are available in standard, medium and heavy gauge frontwires with engineering grade plastic backplates to provide durable and attractive ways to keep your

Extend Your Revenue

Pegboard Extenders

Extend your opportunities to increase revenue with Trion’s pegboard extenders. Use them to layer display surfaces so you can simultaneously show tall and short items. Commonly used to merchandise mops, brooms, long handled tools and more, with cross sells and accessories directly in front. Pegboard extenders extend your merchandising reach.

merchandise accessible.

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Create Your Retail Masterpiece


T H E

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M E R C H A N D I S I N G

®

Create Your Own Merchandising Masterpiece with Trion Fixtures

Corral Basic Items

What’s Your Sign?

Base Deck Fencing

Extruded Sign Holders

On the fence about how to display awkward items? Trion’s display options will take care of that. Corral your packaged or bulk, large or small merchandise with our sturdy base deck fencing. Merchandising your products couldn’t be easier. Boom! That’s how it’s done. Add a Trion Clear Scan® Label Holder or Strip, or clip on basket tag and you’re in business. Your customers won’t be on the fence, either. They’ll find what they need, and you’ll feel

So . . . what’s your sign? To some people, that may be a trite opening line to meet someone new. To merchandisers, it’s the start of a sale. We have the extruded sign holders to make your message visible and well read. Customers won’t buy what they can’t find, so Trion recommends using extruded signs to identify product categories, directing buyers to what they need. Our extruded label and sign holders make it easy to update prices, highlight products features, and promote special offers. Signage solutions are offered in multiple sizes to suit your sales environment. A variety of mounting options are available including hooks,

their enthusiasm at the register.

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push pins, and foam tape.

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Pin It!

Pin-Stop Hooks If it weren’t for Trion’s utility hooks, you would be up the creek without a way to display your paddles. Oars, paddles, lacrosse sticks, tennis rackets, frisbees and sporting goods are a challenge to display attractively and effectively. Hardware faces similar display challenges when merchandising hand tools, garden tools, and household items. Trion comes to the rescue with Pin Stop Hooks. Available in a variety of lengths & gauges, these powerhouses are designed with pin stops to keep products neatly in place, allowing customers to remove the products they want without the risk of disrupting your entire display. When it’s time to display these awkward items,

Heavy Duty Guaranteed!

Utility Hooks

Heavy-duty utility hooks are the tools for tool sales! These hard-working hooks have enough muscle to display tough hardware, like shovels, picks, and hoes, yet enough style to create attractive retail displays. Your merchandise stays secure with 90° upturned hook ends. Metal plate label holders front or rear are optional. Create hardworking retail space with Trion Industries and rake in the profits!

Trion’s got the solution.

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Create Your Retail Masterpiece


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Create Your Own Merchandising Masterpiece with Trion Fixtures

See More, Sell More

WonderBar Trays ®

Trion delivers your merchandising solutions on a platter. . . actually, more of a tray. WonderBar® Trays solve the problem of how to stock, display, and sell an unlimited variety of products, including hardware, soft goods, coffee, dry goods, pet treats, and more. Adjust the tray from 51⁄2 " to 8" wide, creating customized widths that accommodate boxes, bags, pillow packs, gusseted bags, bottles, clam shells, blister packs, and various tub shapes. Depths range from 13" to 24", and trays feature integrated label holders. You’ll sell more when customers can see more! After the sale, simply lift out the tray for convenient rear restocking.

Grab Pouches by the Scruff

Pouch Hook

What’s better than a pouch hook that automatically positions products for purchasing? A pouch hook that allows for easy restocking and is compatible with existing bar merchandising systems, that’s what! Need more reasons? They are available in 4 lengths to accommodate varied depths; feature a rear-loading design; include flip-front label holder, and tool-free installation on gondola, on pegboard, and in coolers. Of course, standard pouch hooks are available in case you are not a believer in gravity feed or gravity itself.

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A Clear Solution

Dividers & Pushers Cross Sell Adjacencies

Dual Lane Trays

After one item is removed from our auto-feed, adjustable dual lane trays, the next product moves right into position. Each lane can be individually adjusted to a range of widths to maximize cross-sell opportunities. In addition, you can choose the push strength for either lightweight or heavy items. Dual Lane Trays give you the ability to customize displays to suit your

Let’s be clear. These are the best systems to display colorful items that draw the customers’ eyes . . . and their dollars. Sturdy enough for busy retail environments, these dividers let products promote themselves keeping packaging visible. Trion pushers keep items forwarded and faced for best visibility. Deploy Trion’s acrylic options for items including cosmetics, vitamins and supplements, crafts, party supplies, and more.

inventory offerings.

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Create Your Retail Masterpiece


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Create Your Own Merchandising Masterpiece with Trion Fixtures

Sign Up!

Hard Working

Extruded Sign Holders

Tool Displayers

Check out the benefits of our promotional products, and you’ll want to sign up! Extruded sign holders are multi-purpose to fit your fixture needs. Use plastic pushbuttons to attach signs to pegboard. Use FISH Tip TM hooks to position outboard on pegboard, slatwall and more. These sign holders make it easy to define product categories update price specials, highlight product features, and offer special deals to your customers. Extruded sign holders are offered in 4 heights and almost any length. Staggered rear mounts allow positioning at 4 different heights.

Hammer sales when home and garden tools are attractively merchandised. Trion specialty hooks are designed to work as hard as the items they hold. Sort, angle, hang, and sell all types of hand tools using a pegboard display, then nail down the details with accessories like our FlipScan® Label Holders and Strips, Scan ItTM Sign Holders, wall tags, and more.

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Verdict: Guilty!

ScanLock Hook Locks ®

Stop! Thief! Send your loss prevention team for a long lunch when Scanlock® Scan Hook Locks are on the job. The great price is a steal in itself, but don’t let the deal fool you. These locks secure most common scan hooks and can retrofit existing hooks. Choose your preferred lock-up: purchase the locks alone or choose full lock-and-hook combinations. Open hooks when customers request, then replace items and re-lock without the need for the key. Even the lock itself is secure, as it stays in place while items are accessed by staff. These locks have been rightly accused of protecting merchandise of all types while protecting your profits. Verdict: guilty!

Best Selection

Scan Hooks for Grid Slat or flat! Trion Industries makes slatgrid or flatgrid scan hooks for that. Flip or clip, you get your choice of label holder styles. Choose from flatback metal, or open wire backplates in single prong, loop, or scan hook fronts. You then have a choice of label holder styles. The entire range of 1 ", 3" and 4" grid surfaces are supported. If slatwire or gridwall is your display surface, your hook choice should be Trion.

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Create Your Retail Masterpiece


T H E

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M E R C H A N D I S I N G

®

Create Your Own Merchandising Masterpiece with Trion Fixtures

Cold Front Forecast

Air Flow Baffle

Oversize? No Problem!

WonderBar EWT Large TM

®

The forecast is a cold cooler front when you use Trion’s Air Flow Baffle in coolers. Product temperature can be difficult to maintain at the front of a cooler. This Air Flow Baffle ensures that cold air is forced forward to keep items at their ideal temperature. Use as part of your cooler outfitting strategy, along with WonderBar ® Bar Merchandisers and hooks, EWTTM Expandable Wire Tray System, and cooler capable Clear Scan® label holders.

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If you think the WonderBar EWT is great, wait till you meet its big brother! Oversized just like some of your products, this weightlifter stays strong on both metal and open wire shelves and bar. One-piece installation means you can drop this bad boy right into place, adjust as needed, and watch the revenue increase. The EWT takes over from there, automatically feeding product to the front and billboarding merchandise for maximum visibility.

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Super Hooks!

Containers Well Contained

Cooler Capable AMT

®

Neatly and effectively display cooler and freezer items, including yogurt, dips, puddings, ice cream, single-serve foods, and more. Our small Adjustable Merchandising Tray (AMT) fits a range of 4- to 6-ounce cups; the medium AMT organizes mid-range offerings; and the large AMT gives ice cream lovers pause to browse and choose a pint of their favorite flavor (hmmm ...why not get both Cherry Vanilla and Rocky Road?). This manual-feed tray ensures that products remain faced and accessible. Time to re-stock? Just lift out and refill. Add Clear

WonderBar Hooks ®

WonderBar® Displays are the versatile heroes of the Trion product family, coming to the rescue when you need muscle and good looks to merchandise items of all sizes. These Bar Hooks can lift heavy loads in their capable arms. Display or Scan, Saddle Mount or Plug in, there are Trion WonderBar Hooks for every need.

Scan® Label Holder, and you’re finished!

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©2018 Trion Industries, Inc.


The only Retail and CPG event focused on the issue defining a generation:

The convergence of personalization and privacy. Topics covered include: • Leveraging loyalty data to outperform the market • The role of influencers in the pursuit of personalization • Best practices in transparency around collecting, storing and sharing personal information • How Facebook, Google, Salesforce and other tech titans are approaching privacy now • The future of tried and true tactics such as email and coupons Plus – What’s Hot! An interactive challenge for start-ups to present innovative personalization and privacy solutions.

Save the Date October 2, 2018 Minneapolis Convention Center A symposium at the Path to Purchase Expo

PersonalizationIQ is the must-attend event of the year. To be part of this event, contact Retail Leader Editor and Brand Director Mike Troy at mtroy@ensembleIQ.com or 813-857-6512.


PREPARED FOODS

Be the Meal Answer

F

resh and perishable foods generated sales nearly 14 times as high as all online food and beverage sales this year, Nielsen notes in its June 2018 “Total Consumer Report.” It’s that kind of growth that’s essential for brick-and-mortar success in the food retailing war, and the grocerant is right on the front lines. Of the top-growing categories in terms of sales during 2017, prepared foods leads the pack, surging 139.5 percent over the prior year to sales topping $36 million, according to Nielsen data. In second place: combo meals, also under the prepared food heading, with 68.9 percent growth to sales of more than $153 million last year. Sales of food eaten away from home recently surpassed sales of food eaten at home for the first time, and grocery retailers must seize that opportunity as consumers look beyond traditional fast-food and quick-casual dining establishments for meal solutions that are more convenient, healthy and economical. With access to an ample supply of the finest ingredients and enhanced culinary firepower, grocery stores need to take further steps to enhance the convenience factor for consumers who come in not knowing what they want for dinner — or, as Chef Charlie Baggs describes it, “shop at 5, eat at 7.” “Every insight study we see tends to agree that consumers generally don’t know what’s going to happen at dinner, the most important meal time of the day for most households, until they are within a few hours of sitting down to eat it,” Baggs, who operates a Chicago-based culinary innovations firm, writes in a recent column for progressivegrocer. com. “Emergence of this food culture shift is due in part to ecommerce shopping, now on an upward trajectory at food retail. Projections keep changing every six months as analysts and pundits predict a tipping point is drawing closer.” Baggs contends that grocers “need to rethink what business you’re in, and look hard at how shopping experience and

$36 Million Prepared foods sales in 2018 Source: Nielsen 2018 “Total Consumer Report”


COVER STORY

71st Annual Consumer Expenditures Study DRIVE DELI FOOD SALES +11%

*

When you

Photo by Von McKinney

partner with Coca-Cola...

food quality must evolve to capture more and more of the just-in-time meal shopping behavior.” As supermarkets refine the in-store experience, they give consumers reasons to shop more often. “The meal answer is going to go somewhere,” Baggs says, “and you want it to be from you.” Examples of grocery retailers pulling out the stops in prepared foods: Southern California’s Bristol Farms, which recently opened its new “food hall” concept store in suburban Los Angeles (featured in PG’s May 2018 issue); Albertsons’ Jewel-Osco, whose new downtown Chicago flagship store features a bar where patrons can order from the market’s full menu of burgers, custom sandwiches and other prepared foods (PG April 2018); Midwest retailer Hy-Vee (PG October and November 2017), whose full-service Market Grille restaurants are being joined by Hy-Vee-owned Wahlburgers franchises; North Carolina-based Lowes Foods, which last year launched an in-store microbrewery (PG August 2017) in addition to exciting experiential merchandising concepts; and Northgate Gonzalez Markets (PG July 2017), whose Los Angeles-area stores feature authentic Mexican fare, including vibrant aguas frescas and tortillas, all made on-site. Grocerants appeal to all age groups, including the coveted Millennial cohort; according to PG’s own consumer survey reported earlier this year, about 40 percent of both younger and older Millennials said that they they purchase supermarket prepared foods often, along with a quarter of Baby Boomers and a third of Gen Xers.

Bristol Farms’ Woodland Hills, Calif., “food hall” store offers a diverse hot bar, including vegan selections; deluxe sandwiches; and decadent baked goods.

Helping consumers with mealtime needs by co-merchandising Coca-Cola products can increase your deli food sales. Visit CokeSolutions.com/retail to learn more.

Explore these issues with Progressive Grocer at its Grocerant Solutions Summit, Oct 3-4 in Minneapolis. Learn more at https://progressivegrocer.com/2018-grocerant-solutions-summit. *Nielsen Retail Execution Audit Custom Study 2015 © 2017 The Coca-Cola Company


COVER STORY

71st Annual Consumer Expenditures Study

DIET & NUTRITION

A Higher Bar

I

t’s no surprise that products that are promoted as helping consumers with their diet and nutrition goals are gaining popularity at retail. What might be surprising is that in the nutritional/intrinsic health-value bar segment, as defined by Chicago-based IRI, retailers aren’t yet taking advantage of this popularity by developing their own private label options. Indeed, the segment is the only one across the market research firm’s snack and granola bar category in which private label offerings don’t appear among the top five manufacturers or brands. Among nutritional/intrinsic health-value bars, Clif Bar & Co. sits comfortably at the top of the manufacturer heap, Of course, it’s not just bars that can address diet with $638 million in sales — a 3.17 percent increase from and nutrition needs for those on the go, or for conthe year-ago period — and a commanding 25.27 share of the sumers looking to replace or augment traditional segment for the latest 52 weeks ending May 20. Trailing by supplements in powdered or pill form: Product offerquite a margin is second-place General Mills, maker of the ings in this area have rapidly expanded to encompass Fiber One line, with $316 million in sales and a 12.52 share beverages, cereal, chips, cookies, crackers, chocolate for the same time period. The other vendors rounding out the bark, jerky, nuts and seeds, peanut and other nut and top five are Kind LLC, whose Nuts & Spices and Plus bars seed butters, popcorn, pretzels, and more. have become familiar sights at retail; Atkins Nutritionals Inc., Grocers should stay aware of health-and-wellwith its low-carb offerings; and Quest Nutrition LLC, whose ness trends and consumption habits and look to mission, according to its website, “is to revolutionize food provide their own products to capitalize on conand make clean eating fun.” sumer interest in functional foods across the store. One key stumbling block for retailers in formulating their They also need to make sure that the items they deown products in this space may be harnessing the scientific exvelop not only meet their stated dietary and nutripertise necessary to create bars that consumers will believe can tion specifications, but also deliver on consumers’ address their nutritional, fitness and energy requirements. By taste and texture expectations, or else they risk loscontrast, brands like Clif and Atkins have had years to hone ing shoppers’ trust, along with their repeat sales. their respective reputations for developing items that live up to their billing for efficacy, and General Mills’ products are supermarket staples trusted Top 10 Nutritional/Intrinsic Health Brands by most shoppers. Still, grocers have the opDOLLAR DOLLAR portunity to cultivate conSALES SHARE UNIT SALES PERCENT DOLLAR OF TYPE PERCENT sumers in search of healthy CHANGE SHARE CHANGE CHANGE nutrition by investing in the DOLLAR SALES YEAR AGO OF TYPE YEAR AGO UNIT SALES YEAR AGO requisite R&D to bring their Clif $390,369,792 6.85% 15.46 0.36 140,833,456 6.45% own bars to market in this General Mills Fiber One 159,416,144 (27.94) 6.31 (2.83) 43,872,632 (28.38) segment. This could result in not only greater trust and Atkins 157,830,544 20.60 6.25 0.84 20,854,792 24.28 loyalty from their customers, Nature Valley Protein 148,423,744 6.32 5.88 0.11 30,914,872 3.16 but also a chance to steal Kind Nuts and Spices 115,984,408 1.42 4.59 (0.13) 44,925,668 4.12 share from some of the bigPure Protein 102,145,656 (6.45) 4.05 (0.47) 23,633,078 (4.68) gest names in nutrition bars. Quest Bar 95,964,600 (5.77) 3.80 (0.41) 37,187,128 2.47 In this respect, grocers should Think Thin 95,328,736 10.03 3.78 0.19 37,124,952 12.07 follow the lead of retailers like Walmart, GNC and CVS, Zone Perfect 88,350,680 (7.88) 3.50 (0.47) 25,227,650 (2.93) all of which have introduced Kellogg's Special K Protein 82,006,472 (0.27) 3.25 (0.15) 14,318,315 4.59 such products as protein bars Source: IRI, a Chicago-based market research firm (@iriworldwide) under private brands.

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COVER STORY

71st Annual Consumer Expenditures Study

COFFEE

Brewing Up Something Traditional

T

raditional is tops in the coffee category, with readyto-brew roasted coffee consumed at least occasionally by three-quarters of U.S. adults, according to the July 2017 “Coffee - US” report from Chicago-based market research firm Mintel. Roasted coffee also commands the majority of dollar sales in the coffee market (40 percent), as ground and whole-bean coffee are the most traditional coffee formats and remain staples in American homes. In the ground-coffee segment, Folgers and Maxwell House are the top brands, although both experienced dollar and unit sales declines during the 52 weeks ended May 20. Brands that did see double-digit dollar and unit sales growth, though, include Peet’s, McCafé and private brands. But single-cup coffee — the kind you’ll find available for brewing in Keurig and similar systems — continues to gain traction, as more than

half of adults report consumption of this kind of coffee, according to Mintel. This splits into half of adults using single-cup drip-coffee pods, while onethird use single-cup espresso pods — a more niche audience using Nespresso and Nespresso-compatible specialty systems. Overall, one-third of dollars spent in coffee go to single-cup products, combining with roasted-coffee sales to equal nearly three-quarters’ share (ready-to-drink and instant offerings make up just more than one-quarter). Among single-cup brands, private label continues to see double-digit growth in both dollar and unit sales, according to Chicago-based IRI. Dunkin’ Donuts also continues to be a bright point in the segment, similarly boasting double-digit dollar and unit sales during the period. Market penetration for single-cup is particularly sizeable, given that the requirements for equipment can be a costly upfront investment, Mintel notes. However, equipment requirements could place limitations on the segment, as could negative perceptions

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Top 10 Single-Cup Coffee Brands

Private Label

DOLLAR SALES

DOLLAR SALES PERCENT CHANGE YEAR AGO

$841,578,880

Starbucks

676,727,360

DOLLAR SHARE OF TYPE

DOLLAR SHARE OF TYPE CHANGE YEAR AGO

UNIT SALES

UNIT SALES PERCENT CHANGE YEAR AGO

16.25%

20.63

2.12

100,412,928

13.88%

7.49

16.59

0.49

66,653,388

4.78

Keurig Green Mountain Coffee

444,269,024

3.39

10.89

(0.10)

45,640,720

5.00

Dunkin Donuts

309,158,816

20.44

7.58

1.01

29,412,720

11.37

Keurig Donut Shop Coffee

250,498,464

(4.44)

6.14

(0.56)

22,598,198

1.62

McCafé

213,106,800

17.69

5.22

0.59

18,847,978

8.30

Folgers Gourmet Selection

161,884,640

(27.01)

3.97

(1.70)

18,233,874

(18.82)

Peet's Coffee

131,587,936

11.21

3.23

0.20

14,184,085

7.43

Maxwell House

110,591,496

10.91

2.71

0.16

10,206,340

(0.28)

Folgers

104,348,544

99.26

2.56

1.22

5,930,979

72.11

Source: IRI, a Chicago-based market research firm (@iriworldwide)

such as high cost per cup and environmental impact from used single-cup offerings. “While eco-friendly claims are making their way into the single-cup segment, potentially addressing environmental concerns, negative perceptions suggest that a ceiling does exist for market penetration, making it likely that usage will eventually hit its peak,” Mintel observes in the report. Turning to attributes, consumer desire for premium products and experiences is in vogue, says Chicago-based market research firm Euromonitor in its February report, “Coffee in the US.” Coffee origin in particular has increasingly be-

come a significant criterion by which consumers choose their coffee. Roasters that feature the region in which beans are cultivated are associating coffee with terms typically reserved for wine, such as “terroir.” Premium brewing methods that highlight the natural flavor of beans are also growing in popularity, Euromonitor notes in its report. Still, the fresh whole-bean segment appears to be slowing in terms of volume growth, suggesting that while consumers are “hungry for methods” that produce higher-quality coffee, there remains a limit to the amount of time and effort they’ll spend in preparing and brewing coffee.

PROGRESSIVE GROCER July 2018

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COVER STORY

71st Annual Consumer Expenditures Study YOGURT

Dropping the Dairy

T

he rise of plant-based foods has been well documented in recent years. Last year, a Nielsen Homescan survey even found that 39 percent of Americans are actively trying to eat more plant-based foods. And what they’re choosing isn’t always such traditional fare such as tofu and soymilk. Plant-based yogurt, in particular, enjoyed 31 percent dollar sales growth during the 52 weeks ended April 7, according to Nielsen Product Insider, powered by Chicago-based Label Insight. “For the yogurt industry specifically, the trend has brought to store shelves dairy-free, plant-based yogurt featuring ingredients such as soy, coconut, almonds and cashews, as well as pea-based yogurt,” writes Daniel Granderson, communications manager with Rockville, Md.-based market research firm Packaged Facts. For instance, Granderson notes, So Delicious Dairy Free offers a certified vegan, plant-based line of coconut milk yogurt in 10 flavors. The probiotic cultures are Non-GMO Project Verified, Certified Gluten-Free and Certified Vegan, and also free from artificial flavors, colors, hydrogenated oils, trans fats and cholesterol.

31%

Plant-based yogurt percentage dollar sales growth Source: Nielsen Product Insider powered by Label Insight

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Other brands he mentions include Good Karma Foods, which offers a line of vegan-friendly, dairy-free yogurt made with flax milk; Forager Project, which markets a new line of organic cashew-based dairy-free yogurt alternatives exclusively available at Whole Foods Market stores; and Ripple, which has a pea-based Greek-style yogurt. That’s not to say that growth areas don’t exist outside of plant-based offerings, where, possibly as expected, Dannon, Yoplait, Fage and Chobani (in no particular order) are the top brands, according to Chicago-based market research firm Mintel in its August 2017 report “Yogurt and Yogurt Drinks.” However, the company warns that while spoonable yogurt dominates the category, it also has lost market share over the past two years to drinkable yogurt, which is driving growth in the overall yogurt and yogurt drink category. Over the next five years, in fact, sales of yogurt drinks and kefir are expected to continue to grow as spoonable yogurt sales remain fairly stable. Mintel projects sales of yogurt drinks and kefir to grow by 58 percent, while spoonable yogurts will see a 5 percent decline in overall sales from 2017 to 2022. Currently, the top brands in the yogurt drink/kefir segment are (again, in no order) Dannon, Lala, Yakult, Chobani and Lifeway. The category overall isn’t without innovation, however, even though classics are still in demand. “Lesser-known international styles, yogurt with mix-ins, and dessert flavors diversify the market and allow consumers a variety of new options to try and perhaps add to their portfolio,” says Megan Hambleton, beverage analyst at Mintel. “While continued flavor and texture innovations will drive the category forward, consumers still are hungry for classic options like Greek and fruit flavors at the end of the day.” But the quest for the “next Greek” style is expected to continue, Chicago-based market research firm Euromonitor asserts in its “Yoghurt and Sour Milk Products in the US” report. Australian-style yogurt (e.g., Noosa) has seen rapid growth, featuring a fullfat formulation that’s rich and high in protein. Other potential candidates are Icelandic-style yogurt, which has been growing due to its high protein and low

sugar content, and French-style yogurt, with General Mills last June launching its glass-packaged Oui brand, which features a thick texture and less tartness than Greek yogurt. Even Bulgarian-style yogurt and Japanese-style aloe vera yogurt have been suggested as possible “next Greek” yogurts.

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PROGRESSIVE GROCER July 2018

59


COVER STORY

71st Annual Consumer Expenditures Study BAKERY

Beyond Bread

M

ore than a third of respondents to Progressive Grocer’s recent Annual Retail Bakery Review noted that the bakery is a destination department, with an additional quarter noting that the department is part of a “one-stop” shopping strategy for the store. This strategy of using bakery to draw customers seems to working, as nearly half (45 percent) of consumers responding to a survey by PG and Prodege said that they buy fresh-baked products from the supermarket at least once a week. The bakery department will continue to be an important customer draw. Lidl entered the U.S. market in 2017, bringing with it a commitment to fresh departments, including bakery. Traditionally, hard discounters’ focus was weighted more heavily toward center store or fresh departments that didn’t require store preparation, like produce or meat. Fellow hard discounter Aldi responded with a remodel plan that included in-store bakeries positioned front and center. With bakery departments spreading beyond the traditional full-service supermarkets, the department will only grow in importance.

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The good news is that most consumers have high opinions of the department in the stores that they shop. In PG’s survey, more than a quarter (25 percent) of consumers rated their regular store’s bakery as excellent, and nearly half (46 percent) rated it as very good. Bread remains the most purchased product from the bakery, with sales of $936,590,354 for the 52 weeks ending Dec. 30, 2017, according to Chicago-based Nielsen. Dollar sales are up only slightly (0.1 percent) from the previous year, but unit sales posted a larger percentage of decline, at 1.6 percent. More than half (56 percent) of consumers had purchased bread from the store’s bakery within the past month, PG’s research found. Best of all is that the purchasing frequency remains consistent across all age groups. The average unit price for bread also saw a 1.7 percent increase, Nielsen noted. While doughnuts are getting a lot of buzz in the marketplace, the product that saw the highest jump in sales, according to Nielsen’s data, was muffins. In 2017, muffin sales reached $403,252,281, an 11.2 percent increase in sales. Unit sales increased


11.2%

Increase of sales for muffins Source: Nielsen

by an almost equal percentage (11.1 percent), so promotions weren’t driving the increase. According to PG research, 23 percent of consumers had purchased muffins in the past month, with women slightly more inclined to purchase them than

men, 25 percent compared with 21 percent. All age groups purchased at about the same frequency, at about 25 percent, except for older adults in the Silent or Greatest Generation. Only 11 percent of mature adults indicated that they’d purchased muffins in the past 30 days. More than one-third (38 percent) of respondents to PG’s survey noted that they’d purchased doughnuts in the past 30 days. The second most-purchased product behind bread, doughnuts saw a sales rise of less than 2 percent from the previous year, according to Nielsen data. For 2017, doughnut sales hit $402,960,159 and unit sales were up 2.4 percent. However, the average price was down slightly by 0.7 percent. Cookies, whose sales rank second in the category, with $959,471,019 for 2017, according to Nielsen, saw unit sales increase 5.4 percent, although the average price dipped almost 1 percent. Nearly 30 percent of consumers purchased cookies in the past 30 days, PG’s research found, with more young consumers making the purchases. Millennials (34 percent) and Gen X (37 percent) had the highest percentage of consumers purchasing cookies within the past 30 days, compared with 22 percent of Baby Boomers and 27 percent of Mature/Greatest Generation. Surprisingly, more men (33 percent) than women (27 percent) had purchased cookies within the past month.

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LegaL Notice

If you bought butter or cheese directly from a cooperative that was a member of CWT between December 6, 2008 and July 31, 2013, a class action lawsuit may affect your rights. What is the lawsuit about? The lawsuit claims that National Milk Producers Federation, Cooperatives Working Together (CWT), Dairy Farmers of America, Inc., Land O’Lakes, Inc. and Agri-Mark, Inc. (“collectively Defendants”) violated the law by entering into a conspiracy to reduce milk output through a “herd retirement program,” where farmers who bid to participate in the program sent their herds of milking cows to slaughter in exchange for payment, allegedly limiting the production of raw milk and driving up prices for butter and cheese. The Defendants deny that they did anything wrong. The Court has not decided who is right. Who is included? The Court decided that the Class includes all persons and entities in the United States that purchased butter and/or cheese directly from one or more Members of Defendant, Cooperatives Working Together and/or their subsidiaries, during the period from December 6, 2008 to July 31, 2013. Those that are included are called “Class Members.” A list of all the Members of Cooperatives Working Together and their subsidiaries can be found at www.ButterandCheeseClassAction.com. What are your options? If you are a Class Member, you must choose whether to stay in the Class. If you stay in the Class, and money or benefits are obtained, you will be notified about how you can participate. You will be bound by all orders and judgments of the Court, whether favorable or not, and you won’t be able to sue the Defendants on your own for the claims at issue in this case. If you want to stay in the Class, YOU DO NOT HAVE TO DO ANYTHING NOW. To exclude yourself from the lawsuit, you must send a letter asking to be excluded. Instructions for making this request can be found at the website or by calling the tollfree number below. You must mail your exclusion request postmarked on or before July 30, 2018. If you exclude yourself, you cannot get any money or benefits from this lawsuit, and you will not be bound by any orders or judgments in this case. If you do not request exclusion, you may (but do not have to) enter an appearance in the Court through your own counsel. Detailed information is available at the website and toll-free number listed below.

1-855-804-8574 www.ButterandCheeseClassAction.com

SNACKS

Snack Attack

I

t’s no secret that consumers’ eating habits are changing, and snacks are increasingly supplanting meals. According to a recent Progressive Grocer/Prodege survey, two-thirds of consumers indicated that they snacked at least once a day, with men slightly more likely than women to snack at least once per day, 69 percent compared with 63 percent. Not surprisingly, older consumers were the least likely to snack every day, at 58 percent for Baby Boomers and 54 percent for Mature/Greatest Generation. Conversely, the generations most likely to snack at least once a day were older Millennials, at 74 percent, and Gen X, at 72 percent, according to the PG survey. When it comes to replacing meals with snacks, 15 percent of consumers indicated that they do so often or very often, according PG’s data. Again, younger consumers are most likely to engage in this behavior: More than a quarter of younger Millennials indicate that this is common practice for them, the most of any age group. Boomers were the least likely age group, with only 10 percent indicating that they often or very often replace meals with snacks. Lunch was the most common meal to be replaced by a snack, as noted by three-quarters of respondents to PG’s survey. However, breakfast was the second most-common meal to be replaced, with 37 percent of consumers indicating that they replaced the first meal of the day with a snack, followed by dinner, at 30 percent. More than half (56 percent) of consumers who responded to the PG survey indicated that they purchase nutritional bars, including granola bars, as their snack of choice. According to Chicago-based IRI, snack/granola bars hit $5.28 billion in sales for the 52 weeks ending May 20, an increase of 2.7 percent compared with the previous year. When it comes to breakfast bars, the second most commonly replaced meal, sales were $1.61 billion, IRI found, with unit sales increasing 2.77 percent from the previous year. One snack category seeing a lot of growth is ready-to-eat popcorn/caramel corn. That’s not surprising, since many manufacturers are introducing new flavors and varieties. For example, Simply7 has partnered with chef Giada De Laurentiis to introduce a line of artisan popcorn that’s low in calories and fat. Ready-to-eat popcorn sales hit $1.1 billion in sales for the 52 weeks ended May 20, according to IRI — an increase of 4.5 percent compared with the previous year. Unit sales also


COVER STORY

71st Annual Consumer Expenditures Study

Top 10 Ready-to-Eat Popcorn/Caramel Corn Brands

Smartfood

DOLLAR SALES

DOLLAR SALES PERCENT CHANGE YEAR AGO

$278,990,976

DOLLAR SHARE OF TYPE

DOLLAR SHARE OF TYPE CHANGE YEAR AGO

UNIT SALES

UNIT SALES PERCENT CHANGE YEAR AGO

12.58%

25.13

1.80

107,353,696

14.58%

Skinnypop

188,431,104

1.30

16.97

(0.54)

52,232,032

(1.63)

Angie's Boom Chicka Pop

106,552,216

45.28

9.60

2.69

33,600,280

45.51

Private Label

77,342,672

16.65

6.97

0.73

37,439,756

14.53

Smartfood Delight

56,262,480

(5.45)

5.07

(0.53)

18,219,384

(5.40)

Skinnypop Skinnypack

37,595,376

12.27

3.39

0.23

7,517,441

15.87

Popcorn, Indiana

36,035,376

(21.54)

3.25

(1.08)

10,685,645

(18.27)

Crunch ’n Munch

27,619,476

1.79

2.49

(0.07)

21,364,200

2.32

Cracker Jack

23,252,978

(6.78)

2.09

(0.25)

14,590,612

(12.55)

G.H. Cretors

21,000,664

12.40

1.89

0.13

5,300,044

0.25

Source: IRI, a Chicago-based market research firm (@iriworldwide)

saw an increase of 4.3 percent over the previous year. In PG’s survey, more than half (58 percent) of consumers indicated that they purchase popcorn, with more women (62 percent) buying than men (54 percent). With the exception of younger Millennials, nearly an equal percentage of consumers buy popcorn across all age groups. Almost two-thirds (62 percent) of older Millennials purchase popcorn, followed closely by Gen X, at 61 percent; Baby Boomers, at 59 percent; and Mature/ Greatest Generation, at 57 percent. Younger Millennials bring up the rear, with only 43 percent indicating that they buy popcorn.

INT

ROD U

CIN

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COVER STORY

71st Annual Consumer Expenditures Study

MEAT

Meatless Market

C

onvenience is undoubtedly playing a key role in the rise of fully cooked meat products, but even here, meat alternatives are starting to encroach on category sales. While according to Chicago-based Nielsen, cooked chicken products still rule the roost, with $2.5 billion in sales, the category is essentially flat, having experienced a 0.8 percent dip from the previous year. By contrast, the meat alternative segment was up 10.7 percent to $285 million. Looking at the frozen/refrigerated meat substitute category, as defined by Chicago-based IRI, one sees dramatic sales dollar growth across three of the five major players: Field Roast, up 70.2 percent; Gardein, up 51.1 percent; and Lightlife Foods, up 28.1 percent. Despite the rising popularity of these brands, Kellogg Co., maker of the popular Morningstar Farms brand, holds the lion’s share of the category, an impressive 50.2. Rounding out the top five manufacturers is Kraft Heinz, with $27.5 million in sales and a 5.2 share. As well as being crafted from soy, meat alternatives can be

10.7% Increase of sales for the meat alternative segment Source: Nielsen

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made using jackfruit, mushrooms, lentils, pea protein, beans or wheat gluten, among other ingredients. Available items include products mimicking — some might say attempting — the flavor and texture of beef, chicken or pork in such forms as hamburgers, hot dogs and other sausage types, meatballs, meat strips, ground meat, and chicken cutlets. While most commonly encountered in the refrigerated and frozen sections, products such as those manufactured by Atlantic Natural Foods, which offers the Loma Linda and Neat brands, can also be found in center store; available items include meatless jerky. Retailers can make the most of rising consumer interest in plant-based proteins by featuring these products alongside their animal-protein counterparts, as emerging brands such as Beyond Meat (No. 8 among top brands, with its Beyond Burger landing a few notches down, in 12th place) are often merchandised, rather than segregating meatless items in the natural/organic section, where many shoppers rarely venture. Another way to encourage usage is to provide tasty recipes, preferably dietitian-approved, that show these products to their best advantage, thereby proving to shoppers that they don’t have to give up their favorite meals — tacos, sliders, “pepperoni” pizza and the like — if they opt to go meatless. But growing meat-alternative sales don’t mean that consumers are abandoning animal proteins altogether: Spurred by concerns about their health and the


Top 10 Frozen/Refrig. Meat Substitute Brands

Morningstar Farms

DOLLAR SALES

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$228,394,352

DOLLAR SHARE OF TYPE

DOLLAR SHARE OF TYPE CHANGE YEAR AGO

UNIT SALES

UNIT SALES PERCENT CHANGE YEAR AGO

1.73%

42.85

(5.50)

49,901,896

6.75%

10.12

2.44

12,168,026

53.58 13.05

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53,966,060

51.13

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15.77

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3.66

4.96

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70.22

3.78

1.23

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67.60

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(0.88)

3.62

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4,563,176

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25.46

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0.27

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30.34

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28.08

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58.51

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Spurred by concerns about their health and the environment, more consumers than ever before are embracing the concept of “flexitarianism,” which means that they haven’t stopped eating meat entirely, although they’re making a conscious effort to eat less of it.

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environment, more consumers than ever before are embracing the concept of “flexitarianism,” which means that they haven’t stopped eating meat entirely, although they’re making a conscious effort to eat less of it. Following their lead, retailers can make a special effort to capture the interest and dollars of these sometime meat eaters by promoting meat items for special occasions when flexitarians might be tempted to indulge, like holidays and seasonal entertaining. Additionally, private label has a presence in this category, coming in at No. 11, just above the Beyond Burger, indicating that grocers have an opportunity, as in the diet and nutrition category, to make their own mark in product development by offering shoppers on-trend flavor profiles, appealing textures, consumer-friendly forms and simple preparation instructions.

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SOLUTIONS

Lunch

Midday Marvels MARKE TING AND MERCHANDISING THE L ATEST CROP OF E ASILY PACK ABLE ITEMS REQUIRES A FOCUS ON THE THINGS THAT MAT TER MOST TO CONSUMERS. By Bridget Goldschmidt

arents of young kids — not to mention those grown-ups who routinely bring their own on-the-go meals to work or on outdoor outings — face the same issue every year, as the newest lunchbox-friendly items arrive on the scene ahead of the back-to-school season: Which products are keepers? “At Natural Grocers, an optimal lunchbox solution is something that’s quick and easy and high in protein,” says Karen Falbo, director of nutrition education at the Lakewood, Colo.-based retailer, which emphasizes healthful foods. “Our customers love that we’ve done our homework to bring them only the highest-quality products, made with only the cleanest ingredients.” Adds Falbo: “Snack or protein boxes, like those that contain meat, cheese, and olives or nuts, tend to fly off our shelves. They are easy to eat and are nutritionally optimal. These protein-rich snacks and meals help to support blood sugar balance.”

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To make such items as accessible as possible, Natural Grocers “merchandise[s] these boxes, along with sandwiches, salads, burritos and more, in a cold case near our registers, and also in our refrigerated beverage areas,” she notes. “We know our customers are looking for convenience, so we make sure they don’t have to spend a lot of time searching for these easy-to-grab items.”

Let’s Talk About Lunch

Speaking of refrigerated items, for the three-SKU ProSticks line of portable grilled chicken-breast skewers, which is currently rolling out to U.S. and Canadian markets, the manufacturer, Montreal-based Expresco, is making use of “integrated retail-driven public relations, social media and web marketing strategies that are crafted with the brand’s personality in mind,” observes Retail Brand Manager Michael Delli Colli. “We aim to be con-


sumers’ go-to lunchbox protein option.” Continues Delli Colli: “With hyper-regional media segments and social media commentary designed to pique the interest of local shoppers, we strive to spur meaningful conversations between individuals and households and drive consumers into grocery retail aisles to think differently about lunchbox and grab-and-go protein. As they learn more about ProSticks, eventually trying the product for the first time, the hope is that they will share their experience with their family and friends. It’s this word-of-mouth marketing that offers the brand the most credibility among new-brand lovers.” Another part of the brand’s strategy is placement that allows consumers to size up the ProSticks line alongside competing items. “Shoppers typically look for their protein in the deli aisle,” says Delli Colli. “By positioning our product next to other grab-and-go protein snacks, shoppers will see our protein content next to competitor brands and compare actual protein and fat counts.”

Enjoy Life Foods’ vibrant packaging uses teal, the color of food allergy awareness, to stand out on store shelves.

Champion of Allergy Awareness

As a matter of course, healthy lunchbox items include those that are free of allergens. “Just this March, the Blue Cross Blue Shield Association reported that the number of kids treated in emergency rooms for anaphylaxis spiked 150 percent from 2010 to 2016,” asserts Joel Warady, general manager and chief sales and marketing officer at Chicago-based Enjoy Life Foods, the No. 1 brand of free-from foods. “It’s heartbreaking facts like that, that motivates us to create allergy-friendly solutions, so kids can enjoy eating in the school cafeteria, not fear it.” To promote its portfolio of 70-plus products, which now includes Grain & Seed Bars, and Protein Bites reformulated to improve taste and texture, the company “recently rolled out new teal packaging to create a bold, unmistakable brand block on shelf,” says Warady, who goes on to explain: “Teal is the color of food allergy awareness, and one that consumers immediately recognize. Our packaging also includes important ingredient callouts and product certifications, as well as our unique story as a free-from food pioneer committed to providing the millions of people with food allergies great-tasting foods they can trust.” He continues: “We’ll also promote our Grain & Seed Bars, Protein Bites, and single-serve items like cookies with digital ads, in-store demos, social promotions, coupons [and] mailers,” among other approaches. Further, Enjoy Life “work[s] with our retail partners to create bold end cap and snack/baking aisle displays to further take the guesswork out of product selection,” observes Warady.

High-protein items like meat snacks are vying for a place in kids’ and adults’ lunchboxes; other better-for-you products, including allergy-friendly snacks, fruit and veggie chips, apple sauce, and even clean-ingredient snack cakes, are also touting their suitability as lunchtime fare. Among the marketing strategies employed are social media outreach, digital ads, targeted regional media segments, coupons, rebate offers, gift packs and in-store demos. Merchandising methods include cold cases by the registers or refrigerated drinks, gravity feeders, placement in more than one department (produce/center store), end caps, perimeter displays, shelf tags and eye-catching packages.

Bare Necessities

Bare Snacks also collaborates with retailers “to more prominently display and feature our lunchbox-friendly snacks during the back-to-school shopping season in order to give parents a healthier choice,” notes Santosh Padki, CEO of the San Francisco-based company, the nation’s No. 1 apple chip brand, which has recently added to its preservative-free, no-oil baked chip lineup veggie

Key Takeaways

Bare Snacks merchandises its products in impactful end cap displays, among other placements, to grab consumers’ attention.

Future entrants in the lunchbox derby will continue to innovate in terms of flavor and form, in step with evolving consumer preferences. Healthy items will remain important, particularly for the concerned parents of school-age children, but taste and convenience will always be paramount considerations.

PROGRESSIVE GROCER July 2018

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SOLUTIONS

Lunch

Snack or protein boxes, like those that contain meat, cheese, and olives or nuts, tend to fly off our shelves.” —Karen Falbo, Natural Grocers

and no-sugar-added strawberry banana varieties. “This includes targeted emails and coupon offers, circulars, shelf tags, and special displays with lunchbox-sized bags.” Placement is an important consideration for Bare Snacks. “Because we use real, fresh fruits and vegetables in all of our snacks, we were one of the first national packaged brands to pioneer premium shelf space for packaged fruit and vegetable snacks in the produce section, merging whole produce with on-the-go, good-for-you snacking options,” explains Padki. “This is particularly important because families are increasingly making a conscious effort to stock up on fresh produce, and it allows us to make that real fruit and vegetable connection with our snacks. That said, we still have a significant footprint in the snack and dried-fruit aisles, where our snack packs are sold, because they’re familiar territory for parents with eager snackers at home. Both locations enable us to merchandise Bare Snacks to a wide range of shoppers.”

Joining the Club

Since in many cases, tasting is believing, lunchbox items can benefit by providing shoppers with samples, as already noted with Enjoy Life. “People fall in love with Country Archer meat snacks at first bite, so in-store demos are really effective for us,” affirms Eugene Kang, CEO and co-founder of San Bernardino, Calif.-based Country Archer Jerky Co. “We just wrapped up demos for existing products in Los Angeles Costco stores, and will be reconvening in September as [our] mini meat sticks roll out. We’ll also promote heavily on the digital end, including amplified outreach to mommy bloggers and continued partnerships with key social media influencers to help raise awareness and drive families in-store.” Kang is particularly enthusiastic about the partnership with Issaquah, Wash.-based Costco, where the mini meat sticks will launch this September in L.A., before moving to other locations in the chain. “The club channel is especially exciting because parents buy in bulk, and we’re meeting a need for all-American, meat-eating families seeking clean protein sources for their kids by offering a 28-count bag of mini meat sticks,” he points out. “That’s a month’s worth of lunches!” The product will also be available at select convenience and retail stores this summer in 48-count gravity feeders. When it comes to merchandising, Kang characterizes Country Archer as “very intentional with our instore placements, because we want people to know that we’re on their side when it comes to accessing better options for their kids, so we pursue a number

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of avenues to merchandise to consumers.” These include store shippers, end cap displays and the above-mentioned gravity feeders, which he describes as “great for catching families at checkout.”

Precision Targeting

For its seven-SKU line of clear apple sauce pouches released in the Western United States this past January, Selah, Wash.-based Tree Top has developed several promotions at multiple retail channels. “One of the ways we are promoting the pouches is by sending out gift packs containing apple sauce, literature and coupons to 100,000 recipients in August,” notes Bryce Godfrey, Tree Top’s director of marketing. “The gift packs will be sent to over 300 elementary schools throughout the West Coast and Texas while parents and kids are preparing for school to resume.” Another method the company is employing is a color full-page free-standing insert (FSI) in various Sunday newspapers in late August, containing a coupon for the apple sauce. “We chose to use this method because it reaches a very broad audience and has a lot of advertising real estate to showcase the product,” explains Godfrey. Meanwhile, on the digital side, Tree Top “will be distributing paperless coupons at participating retailers in August to get a discount on apple sauce,” he says. “The participating retailers are Safeway, Albertsons, WinCo, Fred Meyer, QFC, Smith’s, Ralphs, Fry’s, King Soopers, and Kroger stores in Texas. The reason we decided to go to paperless with our coupons is to reach customers who would not be exposed to printed coupons, as well as targeting specific retailers who carry our product.” What’s more, the company will be stepping into new territory with various Ibotta mobile-rebate offers this October. “We chose this platform because it is rapidly growing and heavily used by one of our target audiences: young families,” observes Godfrey. “Ibotta allows us to share our brand and incentivize purchases with cash rebate offers.” He adds that Tree Top plans to roll out more digital coupons, rebates and Catalina register-print programs in 2019.

Let Them Eat Cakes

Although normally seen as indulgent treats rather than nutritional staples, snack cakes are also getting a cleaner-ingredient makeover, such as Hostess Brands LLC’s recently introduced sixSKU Bakery Petites line of products, which Keith Peterfeso, brand director, all day snacking at the Kansas City, Mo.-based company, describes as being “made without artificial flavors, colors and high-fructose corn syrup,” adding that the products feature ingredients such as “real


chocolate, real vanilla and real fruit.� According to Peterfeso, “All Hostess new innovation and seasonal items are supported with perimeter displays.� The reason for this, he notes, is that “[p]erimeter display units help drive awareness and trial of new items with consumers who may not shop the sweet baked goods aisle every week.� Hostess also provides social media support, along with national FSIs to drive awareness and trial of its new items.

Remember the Basics

As to what the lunchboxes of the near future will hold, Peterfeso predicts ever more “exploration of new flavors and forms as consumer tastes evolve over time. This will include more items with cleaner ingredient decks that provide parents with claims that are important to them and their children.� He cautions, however, that “consumers will also continue to expect consistent quality from

the brands and products that they know and love.â€? In regard to new products currently on the horizon, Country Archer’s Kang says: “We’re ‌ in the midst of launching a new line of meat bars that will appeal to the bigger kids. The bars are the first meat bars on the market made with collagen peptides and are taking protein bars back to their primal state: real meat.â€? Over at Enjoy Life, meanwhile, Warady teases “an exciting launch coming up this fall,â€? noting, “The free-from space is growing at a rapid pace to keep up with demand.â€? Products offering superior nutrition will no doubt remain important, reflecting consumer concerns. As Kang puts it, “There was a study last year by the University of California at Berkeley that found that healthier lunches lead to better test scores, and what parent doesn’t want that for their kid?â€? Still, manufacturers must stick to a couple of basics in developing new products designed to be tucked into America’s lunchboxes. “Kids have picky palates, so taste is the No. 1 thing for them,â€? acknowledges Kang. “They won’t touch food if it doesn’t taste good.â€? “Convenience is key,â€? stresses Natural Grocers’ Falbo, who expects to see further growth in such solutions as bars and protein boxes. “Many people eat their lunches at a desk or workspace, so the idea of anything complicated isn’t going to be appealing to a consumer.â€?

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FRESH FOOD

Produce

According to “Fresh Produce: U.S. Retail Market Trends 2017,” from Rockville, Md.-based Packaged Facts, the specialty/exotic segment of produce was the largest and fastest-growing produce segment over the period spanning 201116. Further, vegans and any customers seeking a healthy diet can find a variety of pluses in specialty produce.

Education Equals Sales

For consumers and produce managers who aren’t familiar with the steady stream of new specialty produce, education is the best sales tool. This is the first thing specialty produce suppliers mention when asked what the most important issue in specialty/exotic produce is today. “Educating consumers is always most important to us,” notes Alex Jackson Berkley, assistant sales manager at Los Alamitos, Calif.-based Frieda’s Specialty Produce. “For example, jackfruit is big and intimidating to shoppers at first, but with more information available on the label, on in-store signage and on websites, consumers are getting comfortable with the fruit

Key Takeaways

Higher Education TE ACHING CONSUMERS ABOUT SPECIALT Y AND E XOTIC PRODUCE CAN BE A HIGHLY EFFECTIVE SALES TOOL. By D. Gail Fleenor

pecialty and exotic produce may not be as familiar as apples and oranges, but retailers are learning its value, and consumers love the taste. As customers discover the flavors, preparation and uses of specialty produce, purchases will increase and produce departments will reap the benefits in healthy margins. Specialty and exotic produce can be purchased online, but customers who buy produce this way can’t sample it to experience the flavor — offering a competitive advantage for supermarkets that choose to use it. “Consumers are looking for ways to expand their healthy eating,” says Mary Ostlund, director of marketing for Brooks Tropicals, based in Homestead, Fla. “There are only so many apples and bananas you can eat. Specialty helps provide exciting alternatives and additions to menus and snacks.”

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Learn all about specialty and exotic produce through suppliers’ websites, including how to cut an item, how to prepare it in or with a meal, and health benefits, and make sure that all department associates do the same. Share this knowledge with customers, as education is a key sales tool for specialty items. Be sure that you can answer customer questions such as how to tell if a specialty item is ripe; the more you know, the more you can sell. Use social media to spread the word and increase sales of specialty items. Sample regularly so customers can experience these new items. Have take-home recipes and product information available. Deploy signage, ads and the supermarket’s website to spread information and gain sales.


FRESH FOOD

Produce

and more willing to take it home to try. We recently helped Tops Friendly Markets to train their produce managers, and one store ended up selling over 100 cases in one week!” Bridget Winkelman, Farmers Market and floral manager at Coborn’s Inc., based in St. Cloud, Minn., educates her customers about the taste and uses of specialty produce in a variety of ways. “Some of our top sellers have been dragon fruit and jackfruit,” she says. “I brought the fruit in just to try for the summer last year, and due to my success with them, I now carry both all year round. Each week in our ad, we have a section called ‘Spotlight on Variety,’ which features a seasonal specialty item with a mini description on how it can be eaten or used. We also do a monthly ‘Foodie’ item in which our stores compete with each other to boost sales on a certain item through exposure and active sampling.” Holidays can be a good time to debut specialty items. “Around Halloween, I put all of the specialty produce into one display and call it Freaky Fruit, with descriptive note cards from Melissa’s on how to use these fruits to make Halloween-style appetizers,” Winkelman notes. She builds weekly ad displays with a little basket in the middle or off to the side featuring a specialty item at regular retail for extra impulse. At store level, Winkelman gives index cards to her customers with information such as nutrition, what the item tastes like, and then one or two ways that it could be paired with other fruits, vegeta-

In spite of its large size, jackfruit is increasing in popularity in the United States, including as a stand-in for meat, such as barbecued pulled pork.

bles or yogurt. Coborn’s uses social media to show how different items should be cut, with Winkelman herself showing how to cut a jackfruit on YouTube. Despite Coborn’s Halloween tie-in, specialty produce shouldn’t be scary, and that’s the message suppliers and retailers must convey to consumers. “Signage that shows the specialty item whole and also cut open is key,” Ostlund says. Showing the insides of specialty items helps take away the mystery of what consumers

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can expect. Tasting the item is also key in education. For instance, Juan Vasquez, produce merchandiser and specialist at Krasdale Foods in the greater New York area, says that he samples starfruit and dragon fruit so customers can taste what they’re buying. While jackfruit and dragon fruit are current top sellers in specialty produce in the United States, the top exotics in Canadian supermarkets include rambutan, Hawaiian papaya and cotton candy grapes, according to Inder Salwan, produce expert/vegetable butcher at Saks Food Hall by Pusateri’s, in Toronto. Produce item popularity may be different in Canada, but education remains essential in selling new varieties of fruits and vegetables. In terms of fruits, Salwan’s department creates a vivid display of a fruit and other complementary elements such as produce items in the same category, or items from other departments. These displays are featured on the front end as well as in the produce department. Sample cups circle the display to allow customers to try the item, Salwan says. “For example, when we have cotton candy grapes in stock, we remove them from the stem, wash them, and put them in a giant bowl for guests

to try and enjoy, replenishing throughout the day,” he notes. While cotton candy grapes look like other grapes, the taste is like that of the midway favorite for which the variety is named. Signs and stickers in bold colors attract customer attention from a distance to the display. At Salwan’s location, a monthly flier/magazine is distributed, outlining new products throughout the store, including produce items. “They describe the product, and how our guests can cook, eat and pair the item with other products throughout the store,” he says. “With the help of the vegetable butcher, we can help our guests by cutting specialty items and displaying this alongside the item.” Customers can see the inside of the fruit, which allows produce associates to explain how the item can be used whether eaten raw, added to a smoothie or as part of an entrée.

One of the greatest things about carrying specialty items is not necessarily visible through sales, but in service.” —Bridget Winkelman, Coborn’s Inc.

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FRESH FOOD

Produce

The Unusual Becomes Usual

Some specialty items are on the way to becoming produce staples for consumers. “Now that white-flesh dragon fruit is available yearround from Vietnam — and soon, red-flesh ones from Nicaragua — this specialty item is steadily growing as a ‘table fruit,’ something you’ll always have on hand,” Frieda’s Berkley says. “Jicama has also become a staple in many households as a go-to snack like carrots and celery.” It’s taken a while, but jicama is now extremely popular, especially with Hispanic customers, due to its versatility. “Many of our specialty produce [offerings] have become more mainstream items over the years, and more accessible,” affirms Robert Schueller, director of public relations at Melissa’s/World Variety Produce Inc., based in Los Angeles. “This includes such items as cilantro, jicama, baby potatoes, veggie sweet peppers, heirloom tomatoes, chile peppers and fresh herbs. Mangoes are now the No. 1 fruit in the world.” Specialty produce isn’t just a fad: Schueller points to double-digit sales growth for many items, including jackfruit, the fastest-growing fruit, and turmeric, the fastest-growing vegetable. “Customers try items like shishito peppers in a Japanese restaurant, and then they want to eat

them at home,” he observes. “Trends start at chef level.” For the rest of 2018, Schueller thinks that growth will continue in turmeric, jackfruit, Dutch yellow potatoes, watermelon radishes, enjoya peppers, dragon fruit and, yes, shishito peppers. For her part, Berkley believes that high-flavor tropical fruits will continue to be in demand. “Shoppers are looking for red-flesh dragon fruit, lychee, rambutan, baby pineapples and jackfruit because of the taste,” she notes. Selling specialty and exotic produce can also have an unexpected bonus. “One of the greatest things about carrying specialty items is not necessarily visible through sales, but in service,” says Coborn’s Winkelman. “One of my favorite things about carrying jackfruit is how it opens up conversations with our guests. As people walk by, they will stop and look at it strangely, which gives me an opportunity to tell them about it. That then leads me to introduce all the other varieties we have, or even talk about bringing variety to family events or holidays, as a conversation starter.”

Specialty Produce Stars WHAT TO KEEP AN E YE ON, ACCORDING TO BROOKS TROPICALS’ MARY OSTLUND

Starfruit has stepped over the threshold of just being a garnish. Adding the fruit’s star-shaped slices to in-store fruit salads has proved motivational to consumers. Starfruit is a simple add-on to any dish, be it breakfast, lunch or dinner. Add it before serving or before baking — its crisp, sweet taste will blend nicely with the entrée, other veggies and, of course, other fruits. POS material should highlight starfruit in a fruit salad, since that’s always the entry point into anyone’s enjoyment of it. Spice things up every now and again, however, with POS that shows starfruit being eaten like an apple, bite by bite.

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Red guava, the sweet fruit that’s a mainstay for smoothies, pastries and sweets in many Latin American cuisines, is beginning to find a home in the sweet spot of all consumers. While it can be enjoyed eaten as is, or as simple slices in the day’s yogurt, baking the fruit is the next step in its acceptance. POS materials should start consumers out with fresh thoughts on how to enjoy red guava: Showing the fruit sliced without its seeds is a good start.

Dragon fruit displays in the produce department entice exploration on behalf of your shoppers, who’ll be curious to find out what the shocking-pink-and-green pointy fruit is and what else is in store for them in the specialty aisle. At home, dragon fruit’s psychedelic appearance is a conversation starter, which, for boxed lunches, dinner tables and buffet tables especially, is a great thing. In addition to the startling outside, there’s an inside of either bright white or deep crimson red, along with little black specks, so shoppers won’t be able to help but notice.

Passionfruit sounds like a fruit that consumers want to try, but most aren’t sure how to enjoy it. POS materials simply showing a wrinkled and ripe fruit with a spoon in it tell all. It won’t be long before fruit and leaf salads alike are boasting a passionfruit either tossed into the mix or scooped into the salad’s dressing. Anyone who’s watched “The Great British Baking Show” has noticed how passionfruit seems to be in at least a couple of the contestants’ bakes. Soon North Americans will be trying this fruit out in their own dishes.


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TECHNOLOGY

Digital Strategies

Culture Counts BEFORE GROCERS CAN ADOPT A TECH-FORWARD STR ATEGY, THE Y MUST CRE ATE AND NURTURE A TECH-FORWARD CULTURE. By Randy Hofbauer ne year after Amazon announced its intent to purchase Austin, Texas-based natural and organic grocer Whole Foods Market, the industry has seen an unprecedented amount of technological advancement — from increased adoption of artificial intelligence (AI) and robotics to other acquisitions such as Target’s buying Shipt, Walmart’s purchasing last-mile delivery company Parcel, and even the Bentonville, Ark.-based mega-retailer’s taking the majority stake in Indian ecommerce behemoth Flipkart. Transactions like these continue to blend brick-and-mortar with ecommerce. And with half of 2018 behind them, grocery executives know that there’s nothing stopping this momentum: Shock and awe on grocery’s technology front is the new normal. If they want to be positioned for swift and smart action, grocers must create and nurture a culture that embraces innovation and the challenges that come with it. What follows are six ways grocers can do so.

1

Start With a Customer-Centric Environment

Today, being customer-centric means delivering personalized experiences for shoppers who expect as much from their grocers. Grocers that aren’t personalizing risk losing customers to competitors that are doing so, according to Beth Curran, director of retail strategy at Redwood Shores, Calif.-based cloud services provider Oracle Data Cloud, and former director of advertising and marketing at the now-defunct Great Atlantic & Pacific Tea Co.

“Personalization should be holistic and seamless, with the customer always in mind,” Curran says. “Retailers must continuously rationalize offer strategies, pricing strategies, content and digital reach in order to maintain a relevant and impactful conversation with their shoppers. Utilizing multiple personalized tactics allows a retailer to strengthen its brand, deepen shopper loyalty and increase sales.” Effective use of shopper data, combined with additional insights such as proximity to a competitor’s store, or shopper lifestyle, allows retailers to target their most loyal and lucrative customers with an experience that matters to them, Curran asserts. Ken Fenyo, head of consumer markets for New York-based consulting firm McKinsey Fast Growth, who was previously VP of loyalty at the Cincinnati-based Kroger Co., adds that when developing a customer-centric culture, grocers must start from the top if they want to be effective. Senior executives, led by the CEO, must ensure that the organization is delivering value to its customers every day.

2

Knowing Shoppers Outside the Transaction

Loyalty programs allow retailers to understand shoppers’ behavior inside stores, but provide only a one-dimensional view, Curran explains. Combining first-party data with powerful third-party data adds a meaningful dimension to what grocers already know about their shoppers, enabling them to tailor communication and merchandising strategies to similar groups of shoppers. The two data sets give marketers and merchants alike a much clearer picture of what households buy, where they shop, and how to reach them with targeted and personalized messaging that will resonate. “Strategies for retention and conversion can be built using this full view,” Curran notes. “For example, are you talking to a 31-year-old Millennial who is a heavy online buyer and engaging with natural and organics — or with a recent empty nester with changing needs? Overlaying third-party data gives you the power to strategically create a conversion plan for the Millennial to your ecommerce platform and provide the empty nester with offers that focus on a smaller household.” PROGRESSIVE GROCER July 2018

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TECHNOLOGY

Digital Strategies

3

Developing Relationships With Startups

A wide range of technologies is disrupting the grocery industry, including mobile, AI, virtual reality (VR) and augmented reality (AR), the Internet of Things (IoT), and robotics. However, few, if any, grocers have the in-house resources and talent to take advantage of these technologies, Fenyo observes. To better compete, grocers need to build a portfolio of relationships with startups to drive revenue and reduce costs. “Some of these startup relationships could be focused on near-term needs — for example, partnering with ecommerce companies such as Instacart and Deliv” for a last-mile solution, he says. “Others could be more far-reaching and transformational, such as creating fully automated fulfillment centers leveraging AI and robotics, or using IoT to provide real-time pricing, offers and advice to shoppers in-store.”

4

Taking a Test-and-Learn Approach

Grocers haven’t typically been fast movers when it comes to developing new technology solutions, often taking years to do so. But with the fast pace of change in the industry, they must move much, much faster by adopting a test-and-learn approach to new technology. Rather than investing in a small handful of large projects, grocers should create and pilot multiple new ideas at a time, Fenyo recommends. Whether these pilots are online or in-store, grocers can quickly scale winning concepts and kill or re-engineer ones that aren’t gaining traction.

5

Embracing the E-volution of the Circular

Grocers today are, in many ways, facing the same challenges that print magazines began dealing with a decade ago: The struggle between print and digital has begun causing disruptive changes to advertising, content access and, most importantly, the customer experience, according to Blake Eisler, director of CPG retail client solutions at Oracle. And while hosting a digital version of a circular on a grocer’s website provides some coverage in this area, it isn’t enough. “You want to reach your consumers wherever they engage online, whether that is Facebook or another channel, with a circular experience that provides the products and

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offers they are most likely to buy,” Eisler notes. To embrace the “e-volution” of the circular, another lens needs to be taken to optimizing print distribution, Curran adds. Historically, retailers have run their entire businesses on the same print distribution strategy, but addressing where and how to scale back to shift to digital is a new conversation: Strategic conversations need to happen now, from the top down, to address how to shift budget, allocate resources, engage CPG partners and plan for the increased need of a targeted digital circular. “Executing the circular via digital media provides real accuracy, accountability and transparency,” she points out. “You know who you’re targeting and reaching with your ad, and how that impacts in-store sales — something that cannot be done now with the traditional print distribution.”

6

Coming to Grips With an Ecommerce Strategy

As Amazon continues to integrate its operations with those of Whole Foods, grocers have a lot to address in their ecommerce strategies, notes David Diamond of New York-based consultancy David Diamond Associates. The fact is, 20 years after Webvan, many grocers are still trying to deal with ecommerce, with a shocking number still not having fully mastered it. “But with Amazon making a significant investment to buy Whole Foods, it seems that someone — probably Amazon — will figure it out over the next one to two years,” Diamond says. “All other grocers will need to be trying as hard as they can to be ahead of — or at least even with — this rising tide.”

3 Critical Tasks in Developing an Ecommerce Strategy

Decide whether home delivery is either big and worth doing, or niche and not bothering with. Develop a plan for click-and-collect that actually works in current stores and uses current personnel. Consider expanding ecommerce offerings beyond what’s sold in their stores, with additional products that customers would like to add to their carts through ecommerce.


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EDITORS’ PICKS

Food, Beverage & Nonfood Products

Twist on the Traditional

With a number of brands finding ways to remove some guilt from enjoying traditional U.S. comfort fare that might not be the most nutritious, Farmwise has launched three varieties of two unique takes on favorite American frozen foods: Veggie Rings and Tots. No gluten included, vegan and free from the top eight allergens, the varieties are Butternut Squash & Sweet Potato Veggie Rings, Cauliflower & Chickpea Veggie Tots, and Beets Veggie Tots. Made with a blend of non-GMO, farm-grown vegetables and beans, the products are said to be a good source of fiber while providing 3 to 5 grams of protein per serving and being a suitable source of vitamins A, C and/ or K. The SRP is $3.99 per 13-ounce (tots) or 12-ounce (rings) bag. https://farmwise.io

Just Add Avocado

Nutrient-dense and low in sugar, avocados continue to have their moment in the sun among Americans seeking to live more healthfully. And, given their versatility, it’s no wonder that Kumana is entering the brick-and-mortar world with its Venezuelan-inspired avocado sauces. The plant-based sauces are non-GMO Project Verified, contain no added sugar, and are made from quality ingredients such as creamy avocados, fresh onion, bell peppers, cilantro, garlic and vinegar. Suitable for adding flavor to breakfast tacos, chicken salad and even sweet potato fries, the sauces come in three flavors: Be Original, true to the company founder’s family recipe; Be Sweet, which blends in mango purée; and Be Hot, which infuses mango purée and habanero pepper. www.kumanafoods.com

Sweet Treats, Less Mess

Although it’s one of the most enjoyed summer treats, ice cream also can be one of the messiest. Coming to the rescue is Jelly Belly, which now offers Candy Cones, ice-cream-flavored treats that come in such classic flavors as Vanilla, Chocolate, Strawberry, Mint Chip and Orange Sherbet. Each Candy Cone piece has a waffle-cone flavor at the bottom and one of the five ice-cream flavors on top. Boasting a smooth texture like candy corn, Candy Cones are mellocreme candies, containing ingredients such as fondant and marshmallow frappé. The SRPs are $2.99 per 3-ounce grab-andgo bag and $6.99 per 4.25-ounce gift box. www.jellybelly.com

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Say Cheese

When it comes to snacking, size matters, and Emmi-Roth has introduced a product for those craving a nosh but also seeking portion control. The company’s signature recipes are now available in the form of Roth Snack Cheeses, which come in three varieties: Creamy Cheddar, Creamy Gouda and Creamy Whole Milk Mozzarella. Each 0.75-ounce round portion is crafted from fresh rBST-free milk and features no preservatives. Each item also contains only 70 calories, is naturally gluten-free and offers 5 grams of protein. SRP ranges are $3.49-$4.99 per 6-count package and $5.49 to $7.49 per 10-count package. www.emmiroth.com


ADVERTISER INDEX

UNITED STATES MARKETS • Convenience • Grocery/Drug/Mass Store Brands • Specialty Gourmet Technology • Hospitality • Apparel CANADIAN MARKETS • Convenience • Pharmacy • Foodservice ADVERTIS ING SALES & BUSINES S STAFF EXECUTIVE CHAIRMAN Alan Glass aglass@ensembleiq.com CHIEF EXECUTIVE OFFICER David Shanker dshanker@ensembleiq.com CHIEF OPERATING OFFICER/CHIEF BRAND OFFICER Richard Rivera rrivera@ensembleiq.com CHIEF BUSINESS DEVELOPMENT OFFICER Korry Stagnito korrystagnito@ensembleiq.com PRESIDENT, CANADIAN DIVISION & NORTH AMERICAN GROCERY Jennifer Litterick jlitterick@ensembleiq.com SENIOR VICE PRESIDENT/BRAND DIRECTOR Katie Brennan 201-855-7609 • Cell: 917-859-3619 kbrennan@ensembleiq.com SOUTHEAST ACCOUNT EXECUTIVE Larry Cornick (NEW ENGLAND, SOUTHEAST) 224-632-8248 lcornick@ensembleiq.com SENIOR SALES MANAGER Judy Hayes (CA,PACIFIC NORTHWEST) 925-785-9665 jhayes@ensembleiq.com SENIOR SALES MANAGER Theresa Kossack (MIDWEST) 214-226-6468 tkossack@ensembleiq.com WESTERN REGIONAL SALES MANAGER Rick Neigher (SOUTHWEST) 818-597-9029 rneigher@ensembleiq.com NORTHEAST, MARKETING MANAGER Mike Shaw (MID ATLANTIC) 201-855-7631 • Cell 201-281-9100 mshaw@ensembleiq.com ADVERTISING MANAGER Jackie Batson 224-632-8183 jbatson@ensembleiq.com

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Airius Anheuser-Busch Inc.

10 11

Biro Manufacturing

64

Blount Fine Foods

9, 17

Boston Beer/Samuel Adams Brewery Tour Line

57

Brill

55

Campbell Soup Company

39

Coca Cola NA

53

Consorzio Tutela Formaggio Asiago

41

Creekstone Farms

7

Epiq Systems

62

Goya Foods, Inc.

19

Grocery Manufacturing Association

76

House Foods America Hughes Network Systems

36 Back Cover

IMEX Management Inc.

65

Iovate Health Sciences Int’l Inc.

56

Italian Trade Commission

4

Jasmine Vineyards

63

Java House

45

Kimberly Clark

21

Mann Packing Co., Inc.

52

MasonWays Indestructible Plastics

72

MIWE

43

Naturipe Farms

27

Nestlé Worldwide New Hope Network Organic Valley Family Of Farms P2PX Expo

3 71 31 Insert 35

Perfetti Van Melle USA Inc.

69

Peri & Sons Farms

73

Request Foods

61

Saputo Cheese USA, Intl

47

Shoptalk PROGRESSIVE GROCER (ISSN 0033-0787, USPS 920-600) is published monthly by EnsembleIQ, 8550 W. Bryn Mawr Ave. Ste. 200, Chicago, IL 60631. Single copy price $10, except selected special issues. Subscription: $135 a year; Canada $164 (Canada Post Publications Mail Agreement No. 40031729. Foreign $270 (call for air mail rates). Periodicals postage paid at Chicago, IL 60631 and additional mailing offices. Printed in USA. POSTMASTER: Send all address changes to Progressive Grocer, P.O. Box 1842 Lowell, MA 01853. Copyright ©2018 EnsembleIQ All rights reserved, including the rights to reproduce in whole or in part. All letters to the editors of this magazine will be treated as having been submitted for publication. The magazine reserves the right to edit and abridge them. The publication is available in microform from University Microfilms International, 300 North Zeeb Road, Ann Arbor, MI 48106. The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations.

37

Inside Back Cover

Supervalu Inc.

42

T. Marzetti, Co

Inside Front Cover

The J.M. Smucker Company

13

The Nature’s Bounty Company

23

The Wonderful Company

15

Transcontinental Robbie Trion Industries Inc.

59 Insert 51

Viking Cold Solutions

75

Zumex Usa, Inc.

58 PROGRESSIVE GROCER July 2018

81


TECH TALK

By Randy Hofbauer

Does Mobile Checkout Need a Rethink? WALMART’S PROBLEM: CONVENIENCE SHOULDN’T EQUAL MORE WORK ON SHOPPERS’ PART.

almart has put an end to its mobile-checkout program, Scan & Go, which it only began expanding earlier this year, due to lack of popularity, CBC News has reported. While some might say this is a huge blow against mobile checkout, I’d argue that it simply proves that mobile shopping as the Bentonville, Ark.-based mega-retailer had it wasn’t convenient enough. First, some background: Scan & Go allowed customers to scan and bag items, including produce, while they shopped, and to pay for their purchases with their mobile devices. Available for Android or iOS devices — or via hand-held devices provided at kiosks in test stores — the app securely stored credit or debit card information for fast and easy checkout, just like shopping with the Walmart Pay mobile wallet. Once customers finished shopping and paid for their products, they could walk through the Mobile Express lane, bypassing checkout. Walmart wasn’t the only major food retailer to offer such a service. In January, Cincinnati-based Kroger revealed the 18 divisions where it will expand its Scan, Bag, Go technology this year, bringing the service to 400 locations across the country. Additionally, in April, Grand Rapids, Mich.-based Meijer introduced Shop & Scan, set to be available in all 235 of its stores by summer’s end. While we have yet to see how successful those services are, we do know that the choice of scanning all of the products yourself as you shop isn’t attractive or convenient enough to make people avoid the checkout queue.

Power to the Associates

Not long before shuttering Scan & Go, Walmart introduced Check Out With Me, a program that could make much more sense expanded store-wide. Currently available only at the company’s Lawn & Garden Center locations, it empowers associates with cellular devices and Bluetooth printers to check out customers and provide receipts right where they are, with no need to 82

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enter the store and stand in traditional checkout lines. The service puts scanning in the hands of associates rather than of patrons, and that’s critical. This way of using mobile-checkout technology is referred to as “line-busting” by Chase Thomason, founder and CEO of Skip, a mobile self-checkout solutions provider based in South Jordan, Utah. For instance, Skip’s technology allows associates operating an event in the parking lot to scan items for people seeking to check out without having to go into the store. I would argue that shoppers with smaller loads want to get in and out — and not add extra work to ease the process. Asking these people to scan their products creates work, and as retail expert Steve Tissenbaum, a professor at Ryerson University’s Ted Rogers School of Management, told CBC News, shoppers don’t want extra work – they want the experience to be “as quick and as seamless as it is when they’re ordering stuff online.” Take Amazon, for instance: The Seattle-based ecommerce giant, not long before Walmart’s plan to axe Scan & Go, said that it was expanding its Amazon Go cashierless concept from one store in Seattle to three more, in Chicago and San Francisco. If the initial Amazon Go store was a success in the company’s hometown, and enough of one to warrant expansion, that could be not just because it eliminates checkout, but also because it doesn’t require extra effort on shoppers’ part. Of course, it’s also possible that Walmart shoppers are more likely to want face-to-face encounters during their shopping trips. CBC News quoted a customer in Missouri as noting that the technology “really takes away from a lot of people interaction, which I personally like.” Further, if Walmart chooses to expand the Check Out With Me concept to other areas of the store, then it might have shoppers more willing to adopt, and even become fans of, mobile checkout.


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Progressive Grocer - July 2018  

Progressive Grocer - July 2018