WORKSHOP FOOD & BEVERAGE MARKETING HELPING COMPANIES MAKE "WHAT PEOPLE WANT TO EAT"
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1 WORKSHOP FOOD & BEVERAGE MARKETING HELPING COMPANIES MAKE "WHAT PEOPLE WANT TO EAT" By John L. Stanton Department of Food Marketing Saint Joseph s University
2 DO YOU REMEMBER THE TIME WHEN YOU BOUGHT FOOD AT EITHER A SUPERMARKET OR A RESTAURANT
3 IT S A WHOLE NEW WORLD OUT THERE.
4
5 OUR COMPANIES WERE ORGANIZED AROUND SUPERMARKET SALES AND FOOD SERVICE SALES. In some companies one or the other was an outcast!
6 QUOTE At a recent meeting one executive said, we are losing sales supermarkets but we cant seem to get any traction in club stores. We really don t understand what they want.
7 What is driving channel growth rate change? Consumer behaviour and demand is driving the shift in formats to some extent. Two working parents Increasing single person households Changing Urban dwelling Demograph ics Hectic work/home schedules Busy lifestyles Commuting Smartphone/tablet penetration Tech-savvy generations Increasing becoming key consumers access to technology Shoppers becoming more informed Ageing population Home access to the internet
8 TODAY CONSUMERS HAVE LOTS MORE OPTIONS Where can people buy food today? Everywhere
9 LET S LOOK AT WHAT IS NOT CHANGING! Taste is King A Generation of Food Attitudes in America Food Pleasure* 1990 vs The most important thing is that food looks, smells, and tastes good. 29% 31% 43% 45% 45% +15 pt * = % completely/mostly agree ** = % agree 9
10 LET S LOOK AT WHAT IS NOT CHANGING! Consumers want convenience Consumers want to indulge Consumers want value Consumers want health
11
12 Retail Banner Sales (USD bn) Overview North America: Channel Sizes by Sales, (USD bn) Hypermarkets & Supermarkets & Discount stores Superstores Neighbourhood stores Source: Planet Retail Convenience & Forecourt stores Channel Cash & Carries & Wholesale clubs Drugstores, Pharmacies & Perfumeries
13 The discount/value channel registered an 8% CAGR from versus 3% for the total US grocery channel as shoppers seek bargains. Eight leading US value chains added more than 5,000 stores in the last five years. Planet Retail projects 7,000 more by Value channel operators are aggressively renovating stores to improve the shopper experience. Consumables are accounting for a rising percentage of sales as operators add selections to attract more traffic and drive shopper frequency. Lower-price private label selections are becoming increasingly prominent. Leading US Value Chains: Steadily Adding Outlets Retailer Change Dollar General 8,194 10, % Family Dollar 6,430 7, % Dollar Tree 3,302 4, % Big Lots 1,353 1, % Note - Save-A-Lot data includes franchised stores Source: Company reports; Planet Retail.. Save-A-Lot 1,191 1, %
14 Shoppers focus on convenience, value and price is making e-commerce an increasingly attractive merchandising vehicle for US grocers. And activity is already Opportunity: on the upswing. Retail s biggest players move to cash in online. Walmart is to install lockers in 12 US stores to hold goods ordered online for shopper collection. The lockers will initially be rolled out on a test basis starting in summer Amazon has been expanding its grocery selection since its introduction in Its AmazonFresh grocery delivery service has been tested in the Seattle area since Target is piloting merchandise delivery and pick-up models. One test allows shoppers to order and pay online and pick up products instore. Another allows for online payment with items shipped from a store with a same-day delivery option. Ahold USA s Stop & Shop division developed a smartphone application that allows customers to scan groceries, tally their orders, receive personalized savings and check-out.
15 MASS MERCHANTS
16 CLUB STORES SALES ARE GROWING FASTER THAN THE INDUSTRY
17 COSTCO
18 COSTCO They want products that others don t have! It is not just shrink wrap 2 cans of what we currently sell
19 EVERYONE WILL TRY TO SELL CONSUMERS THEIR NEXT MEAL It s not even their main business.
20 PHARMACIES This is CVS Baked snacks and frozen dinners!
21 Almost 10% of Walgreens total sales are in edible groceries
22 CVS SALES AND PROJECTED SALES
23 CONVENIENCE STORES ARE AFTER MORE THAN HOTDOGS: THEY WILL SELL GAS TO GET YOU TO STOP AND THEN SELL YOU FOOD!
24 CONVENIENCE STORES! Wawa once sold deli and cigarette. NOW it sells meals and have a promotion every day and every day part!!!
25 COUPONS ARE BEING PRINTED FOR IMMEDIATE PURCHASE INSIDE THE STORE!
26 AND WHEN YOU ARE JUST AT THE PUMPS THEY WILL STILL TRY TO GET SOME OF YOUR FOOD DOLLARS.
27 EXXON
28 HOME DEPOT
29
30 BP
31 TRUCKS STOPS!!
32 PILOT FLYING J
33
34 DOLLAR STORES-WOW BUT THEY ARE NOT ALL ALIKE
35 THE GAP BETWEEN MASS MERCHANDISERS, SUPERCENTERS AND DOLLAR STORES IS SHRINKING. A SURVEY CONDUCTED BY SYMPHONYIRI IN 2012 REVEALED THAT ABOUT 65.1 PERCENT OF CONSUMER PACKAGED GOODS WERE BOUGHT BY U.S. HOUSEHOLDS IN DOLLAR STORES. The stores tend to be located in smaller communities that are too small for Walmarts. Dollar store sales amounted to just over 24 billion U.S. dollars in 2011 and that figure only pertained to grocery and consumable products sales; and is estimated to increase to about billion U.S. dollars by 2016.
36
37 DOLLAR STORES ARE GETTING INTO MORE VARIETY. ONCE SATISFIED WITH DENTED CANS AND THE ILK, THEY ARE LOOKING FOR MORE PROFITABLE BUSINESS. Keep in mind there are over 7,600 Family Dollar and General stores across the USA
38 EVERYONE WILL TRY TO SELL CONSUMERS THEIR NEXT MEAL Look for more and more direct sales.
39 EVERYONE WILL TRY TO SELL CONSUMERS THEIR NEXT MEAL HSN and QVC are already into food but just starting. One show sold $1million in of pasta sauce 30
40
41 E-COMMERCE AMAZON Coffee Whole Bean (5,062) Ground (6,041) Pods (12,470) K-Cups (2,333) Instant (1,618) Capsules (290) T-Discs (141) Unroasted Beans (329) Coffee Gifts (123,976) Coffee Substitutes (8,602 Breakfast Foods Breakfast & Cereal Bars (4,013) Cereals (7,689) Instant Breakfast Drinks (291) Toaster Pastries (523)
42 E-COMMERCE AMAZON Speciality Organic (119) Gluten-Free (27) Kosher (25) Vegetarian (13) Vegan (12) Low-Sodium (10) Low-Fat (8) Pantry Staples Canned & Jarred Food (301) Condiments, Pickles & Relishes (120) Cooking & Baking Supplies (2,210) Dried Beans, Grains & Rice (189) Herbs, Spices & Seasonings (537) Jams, Jellies & Sweet Spreads (165) Oils, Vinegars & Salad Dressings (128) Packaged Meals & Side Dishes (234) Pasta & Noodles (533) Sauces, Gravies & Marinades (358)
43 THINK AMAZON WILL GO PRIVATE LABEL Think Kindle
44 THIS INCLUDES THE HOME DELIVERY Niche players are making it work. Covert s serves about 500 customers a week.
45 COMMUTERS CAN SCAN DOWNLOAD PEAPOD S MOBILE APP, SCAN A QR CODE FROM THE VIRTUAL SHELVES AND START SHOPPING WHILE IN TRANSIT. IT S ABOUT BUILDING AWARENESS FOR PEAPOD AND CAPTURING NEW CUSTOMERS, ACCORDING TO THOMAS PARKINSON, PEAPOD CO-FOUNDER The average Peapod shopper spends $160 per order on the Internet. Those who shop exclusively using a mobile device and that includes tablets spend $165 per order. But if shoppers use both online and mobile in some combination, they spend $168 per order. Given that Peapod shoppers order roughly every two weeks, it s a significant incremental bump in sales.
46
47 EVERYONE WILL TRY TO SELL CONSUMERS THEIR NEXT MEAL Schools are take home moms. offering meals to busy Look at who is it! behind
48
49 EVERYONE WILL TRY TO SELL CONSUMERS THEIR NEXT MEAL Even day care centers are selling food. The Little Leprechaun Academy offers chef prepared take home meals for the whole family. They are priced at about $5.50 per serving. The Little Leprechaun Academy
50 VENDING WILL BE UBIQUITOUS Not just soda and candy. Cash, credit or debit? Robo shop is already open. Here come the big guys. Consumers will follow-slowly.
51 TODAY S VENDING MACHINES CHURN OUT EVERYTHING FROM FROZEN PIZZA TO PROZAC ok not Prozac!
52 AT HIGHWAY REST AREAS ACROSS AMERICA, YOU CAN EVEN BUY SNACKS FOR YOUR DOG
53 EVEN EGGS ARE BEING SOLD IN VENDING (at least in Japan!)
54 ROBO SHOPS ARE IN JAPAN AND ENGLAND AND MAYBE HERE SOON
55 SUPERMARKET VENDING
56 FRONT LOBBY NOW YOU CAN BE 24 HOURS!!
57
58 Supermarkets in Airports? The new 300sqm supermarket, operated by the BILLA chain, is located between terminals 1 and 2 to ensure maximum convenience for airport customers and visitors. Companies like Campbell soup in involved
59
60 HOME CENTERS ARE SELLING FOOD. Besides the candy, coffee etc. Home Depot recently sold turkey fryers which included a free turkey
61 THIS IS A HOME DEPOT!
62 PLACES SUCH AS STAPLES AND OFFICE DEPOT ARE SELLING MORE FOOD EVERY YEAR. Currently it is non-perishables. How about next year?
63 I WOULD LIKE TO CLOSE WITH TWO QUOTES The greatest obstacle in business is Success The Late Malcolm Forbes Nothing can set you back more than complacency
64
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