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2017 Top Trends in Fresh Foods

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2017 Top Trends in Fresh Foods SOCIAL STRATEGY & CULTURAL ALIGNMENT Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 1 Thank you to IRI and Burris Logistics for making this webinar possible Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 2 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 © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 3 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 © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 4 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 Rick Stein • Meat Vice President, Fresh Foods • Seafood Food Marketing Institute • Deli/In-store, fresh prepared foods and [email protected] Fresh Foods assortments 202.220.0700 Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 5 FMI Fresh Executive Committee John Ruane (Co-Chair) Dan Koch Geoff Waldau Richard Cashion Ahold USA Associated Wholesale Grocers, Inc. Delhaize America Healthy Markets Rick Steigerwald (Co-Chair) John Grimes Brett Bremser Mike Papaleo Lund Food Holdings, Inc. Weis Hy-Vee C & S Wholesalers Fresh Foods Tom DeVries (Past Chair) John Haggerty Jim Lemke Blaine Bringhurst* The FEC seeks to Giant Eagle, Inc. Burris Logistics Robinson Fresh Price Chopper Supermarkets • identify areas of collaboration across all John Beretta Mark Hilton Emily Coborn Nicole Wegman* fresh foods Albertsons, LLC Harris Teeter LLC Coborns Wegmans Food Markets, Inc. departments Dave Bornmann Chris Lane Mark Doiron • promote understanding Publix Super Markets, Inc. Wakefern Food Corporation Schnuck Markets, Inc. and cooperation Scott Bradley Mike Malone Geoff Wexler throughout the industry Target Corporation Brookshire Grocery Company Wakefern and with sister fresh associations Jerry Chadwick Dan Murphy Steve Howard • maximize common Lancaster Foods, LLC Unified Grocers, Inc. Bristol Farms learning’s between Alex Corbishley Pat Pessotto Buddy Jones fresh categories and to Target Corporation Longo Brothers Fruit Markets Inc. MDI create a vision of leadership for the Chris Darling Jerry Suter Nick Carlino entire fresh category Albertsons, LLC Meijer, Inc. MDI Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 6 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 © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 7 2017 Top Trends in Fresh Foods Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 8 Today’s Discussion Our Study Trend Overviews Social Strategy Deep Dive 3 – 5 Year Projection/Implications 2017 Education Series Rollout Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 9 Our study focused on finding the keys to high performance Objective Define the major trends that are driving Perimeter sales outperformance and will directly impact long-term success of retailers and suppliers over the next 3- 5 years Inputs industry interviews primary data analysis secondary research Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 10 Perimeter outpacing other F&B departments over last 4 years 4-YEAR CAGR DOLLAR GROWTH 3.8% 2.1X 2.6% 2.3% 1.8% 1.4% 1.1% 0.5% Frozen General Food Refrigerated Beverages Total Food Total F&B Fresh Perimeter Source: IRI FreshLook POS data, MULO, 52 weeks ending 10/30/2016 Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 11 Perimeter department sales $4.7B $6.3B $48.2B $6.4B $2.8B $62.5B $11.3B Source: IRI FreshLook POS data, MULO, 52 weeks ending 10/30/2016 Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 12 2016 Major Perimeter Highlights Meat Seafood Deli Prep Produce Bakery Deli Cheese Deli Meat Deflation Strength Growth Churn Softening Strength Stable VOLUME VOLUME VOLUME VOLUME VOLUME VOLUME VOLUME 2.3 5.3 5.0 5.3 3.2 1.… 0.… % % % % % DOLLAR DOLLAR DOLLAR DOLLAR DOLLAR DOLLAR DOLLAR 3.1 -3.0% 3.8 6.2 4.8 1.3 3.8 % % % % % % Source: IRI FreshLook POS data, MULO, 52 weeks ending 10/30/2016 Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 13 2017 Emerging Top Trends in Fresh Holistic Atomization of Social Strategy & Health Personalization Cultural Alignment RETAILER RESPONSE: Customization Hyper to New Localization Consumerism Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 14 For the Executive Agenda Trends still in early stages Embracing these trends drives sales outperformance Forms foundation for next generation of success Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 15 We want to know… Which option is your primary source to learn more about the fresh foods you purchase? a Social Media b Newspapers/Magazines c Television d Your local store Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 16 Social Strategy & Cultural Alignment Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 17 Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 18 Social Strategy & Cultural Alignment A company’s ability to grow sales by integrating the underlying consumer motivations and values that ultimately impact sales Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 19 Each day, every minute on average… 722,389 972,222 FACEBOOK LOGINS SWIPES 150 MILLION $233,596 EMAILS SENT IN SALES 527,760 2.98 MILLION SNAPCHAT VIDEO VIEWS STORIES 20.8 MILLION+ 76,194 MESSAGES INSTAGRAM PHOTOS Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 20 Video and Mobile Exploding Globally Each Day Globally: 1Billion +8 Billion +10 Billion YouTube hours Facebook Snapchat watched daily videos viewed videos viewed 3.5 Billion Photos shared Source: SimilarWeb 5/16 Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 21 Speed of Information - Average Day for U.S. Mobile User MOST COMMON APPS 37 12 3 5 Average Average Average # of Hours spent # of apps # of apps apps to 80% on phone installed used daily usage per day Source: SimilarWeb 5/16 Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 22 Accelerating Impact INFORMATION IS MORE POWERFUL • Real/Live video connectivity exploding Millennials: Tech Savvy Gen Z: Tech Innate • Real and self-claimed authorities REACTION TIME IS SHORT • Brand health/equity can erode in months • Critical mass of opinion forms quickly Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 23 How Do We Look Ahead? IRI Social Advantage (40 million sites) with full context filtering over 5 years • Activist-led vs. Consumer-led Consolidation and normalization of data Survey and sales results Executive interviews Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 24 We want to know… Which of these five key issues most impacts your purchase decisions on brands/items? (Select one) a Seafood Sustainability b Animal Welfare c Meat Certifications d Food Waste e Workforce Treatment Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 25 Top Social Sentiment Drivers in 2016 ANIMAL FOOD WELFARE WASTE +120% +50% MEAT FAIR FOOD/ SEAFOOD CERTIFICATION/ FAIR WAGE SUSTAINABILITY CLAIMS +97% +223% +104% Source: IRI Social Advantage, 52 weeks ending 12/30/2016 Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 26 Why The Concern? ANIMAL FOOD WELFARE WASTE NOAA+120% reports - Depletion of fishing stocks+50% Erosion of historical habitats MEAT FAIR FOOD/ SEAFOOD Controversial catchCERTIFICATION/ methods FAIR WAGE SUSTAINABILITY CLAIMS Activist concerns evolving into consumer concerns +97% +223% +104% Source: IRI Social Advantage, 52 weeks ending 12/30/2016 Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 27 Seafood Sustainability – Key Issues Target Stock Bycatch Habitat Management Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 28 Seafood Sustainability Impression Key Insights Conversations tilt toward restaurants, Sources but grocery focus is growing 50% 34% 10% Consumers are concerned about microblog news blogs environmental health and their own health 5% 1% social sites
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