Convention Business Session Nielsen’s Hale Provides Insight on Factors Impacting Sales Category Growth and New Opportunities
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A slow U.S. population growth rate and crippling government budget cuts in programs such as SNAP and unemployment are contributing to the slow economic recovery. These factors will impact consumers’ ability to spend, affecting manufacturers’ and retailers’ performance over the next year. For the next decade, the lower income group is expected to grow twice as quickly as total household growth, with their collective purchasing power representing 24 percent of consumer packaged-good purchases. Low- and high-income households both shop at grocery, mass-merchandising, and drug stores; however, more affluent shoppers are attracted to club and specialty retail, while dollar stores, convenience/ gas, and automotive stores attract lower-income households. For bakers to Speaker sponsors Len Kilby (left) and Clive Tolson (right) align sales, merchandising, marketing, and promotional efforts to attract of Stewart Systems/Bakery Thermal Solutions pictured shoppers at both economic extremes, Hale suggested looking at formats, with Todd Hale of Nielsen. downsizing or re-evaluating brand tiers, increasing promotions, and making daily adjustments to pack-size promotions. Prepared food purchased from supermarkets, drug stores, and other retail outlets will grow by 10 percent by 2022, creating another opportunity. When looking to the future of retail, Hale projects that e-commerce will grow 12 percent in the next five years. He suggested not waiting to see how e-grocery develops, but to look for opportunities to collaborate with companies who have unique capability in this space or with companies that can leverage scale against those e-commerce players who have scale. Hale noted that products in the store perimeters are doing well because consumers perceive those products as being “fresher” and closer to the point of consumption than many of those in center-store. He recommended more collaboration between retailer perimeter and center-store merchandising to boost sales across the entire store. He also suggested that branded and private label need to work together to build the bakery category with more innovation and promotion. In closing, Hale noted that 2014 would not be easy in the current spending environment. Current headwinds include income and cost-of-living factors. The pace of change will be relentless, Hale said, so “enjoy the ride and act.” Speaker Hale Sponsored by
Monday Morning Business Session speakers pictured with representatives of session and speaker sponsoring companies.
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Refreshment break sponsors Eddie Perrou (left) and Mark Hotze (right) of DuPont Nutrition & Health, enjoy a meeting break with Jesse Amoroso of Amoroso’s Baking Co., and Ramon Rivera of Bimbo Bakeries USA.
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