New food chain emerging among consumers

01/18/2013 09:19:00 AM
Bill Bishop and Kerry Tucker

Bill Bishop, Brick Meets ClickBill Bishop, Brick Meets ClickIncreasing numbers of food shoppers are making more intentional decisions to be healthier and to support the environment, according to a recent Food Foresight trends report, and that’s good news for produce.

As consumers think more about food choices, it means they are looking for more detailed information about each product — what it is, how it’s produced and where. Some foods are now assigned greater value than others and will therefore command a higher price.

Turmoil in the retail marketplace and new technology are opening opportunities for produce — from producers to retailers. The turmoil is visible in the increasingly competitive retail and foodservice marketplace, which is changing the where, why and how people buy food.

To illustrate:

 

  • Market fragmentation is encouraging the growth of more clearly defined and differentiated food retailers. While Whole Foods continues to be a powerful example at the high end of the market, Aldi is the poster-child example for the price value end of the market. This fragmentation is leading us to the next generation of where to sell food (e.g. Amazon fresh foods, which has been in test market in Seattle and is expected to soon roll out to other markets).

  • Two major market segments are growing and creating opportunities for innovative produce marketers. Each increasingly relies on very different definitions of food:

 

Kerry Tucker, Nuffer, Smith, TuckerKerry Tucker, Nuffer, Smith, Tucker1. Those who have difficulty affording to put food on the table but still need to get the most new nutrition for the money. While many will opt for easy-to-prepare processed foods, there’s still strong motivation in this segment to feed their families healthy meals.

2. Those who define food as part of a healthy and enjoyable lifestyle, with cost remaining a consideration, but not the only one. This shopper segment is more open to paying a little more for something that’s a lot better. The trick to getting them to buy more of your product is to help them understand that it’s worth it.

 

  • Retail food stores are getting smaller as retailers strive to increase sales per square foot. Kiosks offer more product options. Stores are getting smaller to be more profitable. They’re getting better sales forecasting and are responding quicker. Suppliers will need to work with sales forecasting and be more market-centered.

  • Retailers are slowly embracing their own sustainability strategies to decrease costs, increase performance and help the environment (with Wal-Mart moving faster than most). There is more consumer interest so they’ll need to learn more.


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