TOP TRENDS in FRESH FOODS Connected Consumer and Personalization Webinar 4 of 5
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BRINGING TO LIFE: TOP TRENDS in FRESH FOODS Connected Consumer and Personalization Webinar 4 of 5 Sally Lyons Wyatt Jennifer Pelino EVP & Practice Leader SVP Omni Channel Media Copyright © 2018 Information Resources, Inc. (IRI). Confidential and proprietary. 1 FMI is the trade association that serves as the voice of food retail. We assist food retailers in their role of feeding families and enriching lives. Copyright © 2018 Information Resources, Inc. (IRI). Confidential and proprietary. 2 The Association: Our members are food retailers, wholesales and suppliers of all types and sizes FMI provides comprehensive programs, resources and advocacy for the food, pharmacy and grocery retail industry CONSUMER & FOOD SAFETY GOVERNMENT INDEPENDENT CENTER STORE COMMUNITY AFFAIRS & DEFENSE RELATIONS OPERATOR PRIVATE BRANDS SUPPLY CHAIN TECHNOLOGY ASSET COMMUNICATION EDUCATION FRESH FOODS HEALTH & WELLNESS INFORMATION RESEARCH SUSTAINABILITY WHOLESALER PROTECTION SERVICE Copyright © 2018 Information Resources, Inc. (IRI). Confidential and proprietary. 3 Fresh @ FMI FMI is committed to the growth and success of fresh companies and their partners. FMI provides resources and networks that support the interests of member companies throughout the global, fresh produce supply chain, including family-owned, private and publicly traded businesses as well as regional, national and international companies. Emphasis on fresh • Produce • Meat • Seafood • Deli/In-store, fresh prepared foods and assortments • Bakery Rick Stein Fresh Foods • Floral Vice President, Fresh Foods Food Marketing Institute [email protected] 202.220.0700 Copyright © 2018 Information Resources, Inc. (IRI). Confidential and proprietary. 4 FMI Fresh Foods Research and Education Networking Advocacy In-depth information, trends and Share ideas, explore best Understand what is going on in insights to foster innovation, practices and develop business Washington and make your take advantage of new relations voice heard opportunities and help develop winning strategies Copyright © 2018 Information Resources, Inc. (IRI). Confidential and proprietary. 5 FMI Fresh Foods Executive Committee (FEC) John Ruane (Chair) Nate Stewart John Grimes Terry Murphy Ahold USA Hy-Vee Weis Markets Wakefern Rick Steigerwald (Co-Chair) John Haggerty Mark Doiron Scott Evans Lund Food Holdings, Inc. Burris Logistics Fresh Thyme Price Chopper/Mkt 32 Tom DeVries Mark Hilton Rick Findlay Randy Riley Giant Eagle, Inc. Harris Teeter LLC Fresh Thyme Kroger John Beretta Geoff Wexler Jim Lemke Frank Romero Albertsons, LLC Wakefern Food Corporation CH Robinson Fresh Kroger Steve Howard Dave Bornmann Kirk Laboyteaux Bristol Farms/Lazy Acres Amanda Dentici Publix Super Markets, Inc. Brookshire Grocery Company Fairway Markets Emily Coborn Scott Bradley Dan Murphy Coborns Paul White Target Corporation SuperValu Luckys Markets Jerry Goldsmith Jerry Chadwick Pat Pessotto Spartan Nash Nicole Wegman* Fresh Solutions Longo Brothers Fruit Markets Inc. Wegmans Food Markets, Inc. Mike Papaleo Alex Corbishley Nick Carlino C&S Wholesalers Target Corporation MDI Distributors Anthony Sattler * Silent members Buddy Jones Don Sanderson C&S Wholesalers MDI Distributors Meijer, Inc. Pat Brown Dan Koch Geoff Waldau Albertsons LLC Associated Wholesale Grocers, Inc. Food Lion Copyright © 2018 Information Resources, Inc. (IRI). Confidential and proprietary. 6 FMI Fresh Foods Leadership Council (FFLC) John Ruane (Co-Chair) Jeff Oberman Greg Livelli Jeff Thompson Ahold USA United Fresh Produce Assoc. Hussmann Trident Seafood Rick Steigerwald (Co-Chair) Janet Riley Robb MacKie John Dunne Lund Food Holdings, Inc. North American Meat Institute American Bakers Assoc. Acosta All- FEC Members Galit Feinreich Jim Huston Lynn Egner FMI Fresh Executive Council Ready Pac Foods, Inc. Johnsonville Hormel Foods Chris Dubois Tom Super Chad Gregory Sally Lyons Wyatt IRI National Chicken Council United Egg Producers IRI Michael Eardley Jarrod Sutton Jessica Harris Wendy Reinhardt Kapsak International Dairy-Deli-Bakery Assoc. National Pork Board Earthbound/White Wave Produce for Better Health (PBH) Jason Jerome Joe Watson Eric Gassaway Michael Lang National Cattleman's Beef Association Produce Marketing Assoc. Monsanto Invatron Sarah Schmansky Joe Weber John Knorr Tom Daniel Nielsen Perishables Group Smithfield Foods Inc. Phillips Seafood Sterilox/Chemstar Paul Mastronardi Art Yerecic Mike Celani Randy Evins Mastronardi Produce Yerecic Label Wonderful SAP David Sherrod Brad Roche Chandra Macleod Tom Windish SE Produce Council Hill Phoenix Aqua Star Seafood Cargill Copyright © 2018 Information Resources, Inc. (IRI). Confidential and proprietary. 7 Total Store Sales Continue to Grow TOTAL STORE SALES TOTAL FRESH PERIMETER $783B $140.8B 77% of perimeter 3- year dollar growth $5.5B coming from the $33B vs. 3 years Produce vs. 3 years ago ago department Source: Total Store View + Perimeter Market Advantage, MULO 52-weeks ending 6-17-18 © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 8 The Fresh Perimeter Departments Make Up a Quarter of Food & Beverage MULO Sales Driven by Produce and Meat $54B $4.4B $95.7B FROZEN SEAFOOD $565B TOTAL F&B BEV & LIQUOR $6.3B $49.8B BAKERY MEAT $55.6B $180B DAIRY $8.3B GENERAL FOOD $59.6B $12.4B DELI MEAT & CHEESE PRODUCE DELI PREPARED CENTER STORE PERIMETER Source: Dollar Sales, IRI Total Store View + Perimeter Market Advantage, 52 weeks ending 6-17-18 vs. Year Ago; © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 9 Perimeter is No Longer the Slam Dunk Store Sales Growth Engine of Years Ago EDIBLES 1.9% 2.7% 1.5% 2.5% 2.5% 2.0% 1.3% 2.3% 1.0% 1.2% 3.5% 0.4% BEVERAGES FROZEN GENERAL FOOD LIQUOR REFRIGERATED -0.5% -0.4% -0.3% 1.6% 1.2% 0.7% 1.2% 3.5% PERIMETER BAKERY DELI CHEESE DELI MEAT DELI PREPARED 1.2% 1.3% 1.2% 1.0% 1.5% 2.5% 1.9% -0.5% PRODUCE SEAFOOD MEAT Source: Total Store View + Perimeter Market Advantage, MULO 52-weeks ending 6-17-18 % CHG VS. YAGO CAGR ‘15-’18 © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 10 Fresh Perimeter Growth Slow Down in Recent Years While Edibles Heats Up 5.4% 4.5% 2.2% 2.1% 2.0% 2.2% 1.2% 1.2% 1.3% 0.7% 0.6% CY 2014 CY 2015 CY 2016 CY 2017 Latest 52 YTD 2018 EDIBLE PERIMETER Source: Total Store View + Perimeter Market Advantage, MULO 52-weeks ending 6-17-18 Sales change vs. Prior year by period © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 11 Today’s Top 10 Trends 2016 2017 “Fresh”en Up @... IRI Worldwide.com/insights or fmi.org/TopTrendsInFresh © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 12 Our Study Focused on the Shopper and Consumer LEVERAGED CONFIRMED VALIDATED 10 relevance & primary & trends evolution with secondary 2016 & 2017 consumers research © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 13 Connected Consumer We all know that consumers are “connected”, but how is it impacting shopping and purchasing Fresh today? Copyright © 2018 Information Resources, Inc. (IRI). Confidential and proprietary. 14 The Digital Divide isAlive Many consumers are using more online/digital resources when shopping for fresh foods vs. last year Younger Older Total Millennials GenX Boomers Boomers Desktop/Laptop 24% 30% 24% 20% 18% Smartphone/Tablet 40% 51% 50% 31% 11% Source: IRI 2018 Fresh Digital Survey Copyright © 2018 Information Resources, Inc. (IRI). Confidential and proprietary. 15 Before Going to the Store, All Generations are Using Online to Look for Recipes but Millennials are Setting the Tone for the Future Younger Older Total Millennials GenX Boomers Boomers Desktop/Laptop 15% 23% 12% 12% 7% Smartphone/Tablet 20% 34% 21% 12% 2% Source: IRI 2018 Fresh Digital Survey Copyright © 2018 Information Resources, Inc. (IRI). Confidential and proprietary. 16 51.8% 48% From in 2016… …to in 2018, 48% of all shoppers still use newspapers, store circulars, and magazines to plan Indication that the traditional methods are slowly losing effectiveness Source: IRI 2018 Fresh Digital Survey Copyright © 2018 Information Resources, Inc. (IRI). Confidential and proprietary. 17 46.9% 51% …to 2018, with half of all In fact, we see the shift from consumers going online to 2016… seek coupons and sales from coupon, retailer and manufacturers' websites Source: IRI 2018 Fresh Digital Survey Copyright © 2018 Information Resources, Inc. (IRI). Confidential and proprietary. 18 34% Over a third compare prices 11% compare prices using a laptop or personal computer while 17% use a digital device 9% compare prices offline Source: IRI 2018 Fresh Digital Survey Copyright © 2018 Information Resources, Inc. (IRI). Confidential and proprietary. 19 Consumers are Leveraging Online Resources to Research Ways to Use the Products They are Going to Buy Younger Older Total Millennials GenX Boomers Boomers Desktop/Laptop 7% 11% 5% 5% 4% Smartphone/Tablet 14% 26% 14% 10% 0% Source: IRI 2018 Fresh Digital Survey Copyright © 2018 Information Resources, Inc. (IRI). Confidential and proprietary. 20 Different Groups Require Different Connection Combinations © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 21 The Kaleidoscope is Having a Direct Impact on How CPGs and Retailers Need to Message to These Consumers 10% 25% 5% 31% 10% New populations from 2017 to 2022 8% 6% 13% 1.7M 14% number Hispanic Americans/year 400k 75% Number Black non-Hispanics/year 42% 51% 500k Number Asian & Pacific Islander non- Hispanics/year Age 0-4 Millennial ('81-'97) Boomer ('46-65) All Other Non-Hispanic White