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© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 1
FOODS
BRINGING
TO LIFE:TOP TRENDS in FRESH
Chris DuBoisSenior Vice President
Strategic Accounts
Jonna ParkerPrincipal
IRI Fresh Center of Excellence
New Consumerism & the Customization ContinuumWebinar 3 of 5
© 2018 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.
© 2018 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
ASSET
PROTECTIONEDUCATION RESEARCH
FOOD SAFETY
& DEFENSE
GOVERNMENT
RELATIONS
SUSTAINABILITY
SUPPLY CHAIN
HEALTH & WELLNESS
PRIVATE BRANDS
FRESH FOODS INFORMATION
SERVICE
CENTER STORE
CONSUMER &
COMMUNITY AFFAIRSINDEPENDENT
OPERATOR
COMMUNICATION WHOLESALER
TECHNOLOGY
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 4
Fresh @ FMI
Fresh Foods
Emphasis on Fresh
‒ Produce
‒ Meat
‒ Seafood
‒ Deli / In-Store, Fresh Prepared Foods, Assortments
‒ Bakery
‒ Floral
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.
Rick SteinVice President, Fresh Foods
Food Marketing Institute
rstein@fmi.org
202.220.0700
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 5
FMI Fresh Foods
Research and Education
In-depth information, trends and insights
to foster innovation, take advantage of
new opportunities and help develop
winning strategies
Networking
Share ideas, explore best practices and
develop business relations
Advocacy
Understand what is going on in
Washington and make your voice heard
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 6
FMI Fresh Executive Committee (FEC)
The FEC is Comprised of FMI Member companies, Retailers and Wholesalers
John Ruane (Chair)
Ahold USA
Rick Steigerwald (Co-Chair)
Lund Food Holdings, Inc.
Tom DeVries
Giant Eagle, Inc.
John Beretta
Albertsons, LLC
Dave Bornmann
Publix Super Markets, Inc.
Scott Bradley
Target Corporation
Jerry Chadwick
Lancaster Foods, LLC
Alex Corbishley
Target Corporation
Buddy Jones
MDI Distributors
Dan Koch
Associated Wholesale Grocers, Inc.
Brett Bremser
Hy-Vee
John Haggerty
Burris Logistics
Mark Hilton
Harris Teeter LLC
Geoff Wexler
Wakefern Food Corporation
Brookshire Grocery Company
Dan Murphy
SuperValu
Pat Pessotto
Longo Brothers Fruit Markets Inc.
Nick Carlino
MDI Distributors
Jerry Suter
Meijer, Inc.
Geoff Waldau
Food Lion
John Grimes
Weis Markets
Richard Cashion
Healthy Home Market
Shana DeSmit
Walmart
Mark Doiron
Fresh Thyme
Jim Lemke
CH Robinson Fresh
Steve Howard
Bristol Farms/Lazy Acres
Emily Coborn
Coborns
Jerry Goldsmith
Spartan Nash
Mike Papaleo
C&S Wholesalers
Pat Brown
Albertsons LLC
Terry Murphy
Wakefern
Scott Evans
Price Chopper/Mkt 32
Nicole Wegman*
Wegmans Food Markets, Inc.
* Silent members
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 7
FMI Fresh Foods Leadership Council
John Ruane (Co-Chair)
Ahold USA
Rick Steigerwald (Co-Chair)
Lund Food Holdings, Inc.
All- FEC Members
FMI Fresh Executive Council
Chris Dubois
IRI
Michael Eardley
International Dairy-Deli-Bakery Assoc.
Bridget Wasser
National Cattleman's Beef Association
Sarah Schmansky
Nielsen Perishables Group
Paul Mastronardi
Mastronardi Produce
David Sherrod
SE Produce Council
Jeff Oberman
United Fresh Produce Assoc.
Janet Riley
North American Meat Institute
Galit Feinreich
Ready Pac Foods, Inc.
Tom Super
National Chicken Council
Patrick Fleming
National Pork Board
Joe Watson
Produce Marketing Assoc.
Joe Weber
Smithfield Foods Inc.
Art Yerecic
Yerecic Label
Brad Roche
Hill Phoenix
Greg Livelli
Hussmann
Robb MacKie
American Bakers Assoc.
Jim Huston
Johnsonville
Chad Gregory
United Egg Producers
Joe DePetrillo
Earthbound/White Wave
Shawna Lemke
Monsanto
John Knorr
Phillips Seafood
Mike Celani
Wonderful
Chandra Macleod
Aqua Star Seafood
Jeff Thompson
Trident Seafood
Emily Blair
Miliken
John Dunne
Acosta
Scott Aakre
Hormel Foods
Sally Lyons Wyatt
IRI
Wendy Reinhardt Kapsak
Produce for Better Health (PBH)
Michael Lang
Invatron
Tom Daniel
Sterilox/Chemstar
Randy Evins
SAP
Tom Windish
Cargill
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 8
TODAY’S
DISCUSSIONTotal Store Performance
Customization to the New
Consumerism
Update & Expansion
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 9
Total Store Sales Continue to Grow
Source: Total Store View + Perimeter Market Advantage, MULO 52-weeks ending 6-17-18
TOTAL STORE SALES
$783B
$33Bvs. 3 years ago
TOTAL FRESH PERIMETER
$139B
$5.5Bvs. 3 years ago
77%of perimeter 3-year
dollar growth coming
from the Produce
department
CPG EDIBLES
+0.2PTSin total store sales
share driven by
strong performance in
frozen, refrigerated
and liquor
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 10
The Fresh Perimeter Departments Make Up a Quarter of
Food & Beverage MULO Sales Driven by Produce and Meat
PRODUCE
BAKERY
FROZEN
DELI MEAT & CHEESE
MEAT
SEAFOOD
DELI PREPARED
$59.6B
$4.4B
$49.8B$6.3B
$12.4B
$8.3B
$54.0B
BEV & LIQUOR
$95.7B
GENERAL FOOD
$180B
$565BTOTAL F&B
CENTER STORE PERIMETER
DAIRY
$55.6B
Source: Dollar Sales, IRI Total Store View + Perimeter Market Advantage, 52 weeks ending June 17,2018 vs. Year Ago;
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 11
1.9%
2.3%
BEVERAGES
2.7%
1.0%
FROZEN
1.5%
1.2%
GENERAL FOOD
2.5%
3.5%
LIQUOR
2.5%
0.4%
REFRIGERATED
-0.5%
1.2%
BAKERY
-0.4%
0.7%
DELI CHEESE
-0.3%
1.2%
DELI MEAT
1.6%
3.5%
DELI PREPARED
1.2%
2.5%
PRODUCE
1.0%
1.9%
SEAFOOD
1.5%
-0.5%
MEAT
EDIBLES
2.0% 1.3%
PERIMETER
1.2% 1.3%
% CHG VS. YAGO
CAGR ‘15-’18
Perimeter is No Longer the Slam Dunk Store Sales Growth Engine of Years Ago
Source: Total Store View + Perimeter Market Advantage, MULO 52-weeks ending 6-17-18
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 12
2.2% 2.1%
0.6%
2.0% 2.2%
5.4%
4.5%
1.2% 1.2%
1.3%
0.7%
CY 2014 CY 2015 CY 2016 CY 2017 Latest 52 YTD 2018
EDIBLE PERIMETER
Fresh Perimeter Growth Slow Down in Recent Years While Edibles Heats Up
Sales Change vs. Prior Year By Period
Source: Total Store View + Perimeter Market Advantage, MULO 52-weeks ending 6-17-18
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 13
Perimeter Sales Particularly Struggling to Grow in Great Lakes; New England
Center-Store Edibles Are Also Slow in These Regions, But Outpacing Sluggish Fresh
Perimeter Total US
MULO Average
1.2%
Source: Dollar Sales, IRI Total Store View + Perimeter Market Advantage, 52 weeks ending June 17,2018 vs. Year Ago
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 14
Long-Term Perimeter Growth Has Also Varied by
Retailer and Unit Increases Even Harder to Achieve
of RMAs outpaced
MULO growth average
1.2% higher perimeter
dollar sales
48% only
1/3also grew
perimeter unit
sales
Source: IRI analysis of RMAs at the division/banner level with perimeter sales greater than $50M IRI Total Store View + Perimeter Market Advantage, 52 weeks ending June 17,2018 vs. Year Ago
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 15
Increased
Competition
Lack of
Change
Operational
Challenges
Price
Pressures
Shifting
Consumer Needs
Fresh Challenges
are More Complex
Than Ever
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 16
20172016
“Fresh”en Up @...
IRI Worldwide.com/insights or
fmi.org/TopTrendsInFresh
Today’s Top 10 Trends
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 17
Our Study Focused on the Shopper and Consumer
LEVERAGED
10
trends2016 & 2017
CONFIRMED
relevance & evolution with
consumers
VALIDATED
primary & secondary research
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 18
2018
CUSTOMIZATION
FOR THE NEW
CONSUMERISM
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 19
NEW
CONSUMERISM
How retailers meet
today’s consumer
demands
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 20
25
35
52
60
60
100
125
180
300
320
900
Walmart
Target
Lidl
Hobby Lobby
H&M
Ulta
Five Below
Aldi
Family Dollar
Dollar Tree
Dollar General
Retailers are Experimenting With New Formats … and Include Fresh2
01
8 S
tore
Op
en
ing
s
Blue bars indicates stores that
include at least some perimeter items
Source: Business Insider
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 21
Expanded Availability Has Impacted Fresh Consumer Spending in Just One Year
Consumers spending
more produce dollars
Consumers spending
less produce dollars
+21% +11%
ONLINE
+9%
DOLLAR0.1% of national
all outlet Produce
spending
72%
Grocery
accounts for
of all produce
dollars -2%
GROCERY
-2%
CLUB
Source: IRI CSIA including fresh fixed and random-weight produce items; 52 weeks ending 6-24-2018 verses prior year
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 22
33%of consumers say they
shop for fresh foods
routinely or most often at
Specialty Grocer vs.
Mass or Supermarkets
“Delivery Innovations” has become
much more important to them in the
past year
Source: IRI Fresh Foods Survey, Dec 2017
Alternative Formats
Becoming Formidable Fresh
Competition in Mind Share
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 23
Consumers Tell Us They Want the Retail Industry to Continue to Evolve
“Format and offering
changes have become
much more important to
me in the past year.”67% of respondents
72% of Millennials “Good value for the price
is most important to me.”
44% of respondents
54% of Millennials
“Competitive pricing is
much more important to me.”
Source: IRI Fresh Foods Survey, Dec 2017
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 24
Value and Private Brands at the Core of Retail Changes
Polar Ends of the Value Spectrum Outperforming Middle-of-the-Road Peers*
Market Entries and Acquisitions
Source: Deloitte
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 25
ALDI Growing Quickly by Offering Value
With 1,600 Stores Today and Adding 900 More by 2022
ALDI Could be the Third Largest Grocery Chain
61%good/affordable
price is what they
liked about ALDI
93%said that
pricing/value
drove them
to ALDI
FRESH
PRODUCE(77%) was the
top product
purchased
Selection of
Store Brand products &
Uniqueproducts offered are
liked at ALDI over
other retailers
Half said their experience was Better Than Expected
1/3 shifting much more of their shopping to ALDI
Source: IRI ALDI Market Shift Study 2018
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 26
ALDI
Expands
Fresh
Grab-and-Go Deli Focus on Fresh,
Convenience
Testing self-service
“in-store” bakery
2019 Planning $3.4
Billion expansion
including first entry
into Phoenix
40%+ fresh food options
across departments
*Source: Deloitte, ALDI press releases
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 27
ALDI’s Expansion
Quietly Continues,
and Shoppers are
Very Aware
60% - 70%of markets experienced
PRICE declines when
ALDI opened
1%-3%average overall
market PRICE
decline
+2% to -15%category PRICE impact range
Source: IRI Growth Summit, Market Shift Study 2018
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 28
ALDI
Which do you think is ALDI and which are the supermarkets down the street?
Source: IRI Staff Images
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 29
Lidl Enters
the U.S.
40%became aware by
driving past the
store
69%Fresh produce was
the top product
purchased
70%said Lidl offered
good value for the
money
59%liked the private
brand assortment
64%said price &
incentives drove
them to the store
*Source: Deloitte, IRI Market Shift Study
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 30
Resonating With Some Customers, But Not With All
20%are shifting much more of
their shopping to Lidl stores
50%said their experience
was better than expected
58%said they definitely will
visit Lidl again in the future
BUT
16%said Lidl was worse
than expected
Repurchase intent dropped from 44%
in Fall grand opening to 21% in Spring
Source: IRI Growth Summit, Market Shift Study 2018
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 31
Lidl’s Market Entry Has Had Mixed Results
Shoppers are the
big winners
Entry sparked industry-wide activity, forcing
competing retailers and manufacturers to
up their merchandising games
Aggressive growth plans and sales
expectations have not been met
New stores will have smaller footprints
and more-limited assortment rolled out
more slowly in more urban markets
The U.S. Market Continues
to Challenge Lidl
Stores within less than 2
miles of Lidl dropped
prices between 2-15%
Image Source: 210 Analytics
Source: IRI Growth Summit, Market Shift Study 2018; UNC Lidl Price Survey
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 32
Jonna will update
copy points
Update a picture
of an aldi or fresh
as an alternative
format
Key Takeaways
• Consumers remain focused on fresh -
balancing value and evolving needs
• Formats which meet these dual goals
will continue to succeed with
competition from all sides on price
• Traditional food retailers are fighting
back but battle for fresh trips will be won
based on tailoring to consumer needs
beyond carrying the basics
• Critical to hone differentiation and own
your value proposition
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 33
New Consumerism Also Has Led to Rapid Expansion in How We Buy Fresh Foods
Service
Customization
E-Commerce
Delivery
Click-and-
Collect
What Does
it Mean for
Fresh?
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 34
eCommerce Penetration Continues to Climb, Driven by Growth of Repeat Buyers
Other Channels are Struggling to Maintain Ground
DOLLAR
$
SUPERCENTER
Grocery Drug Mass / SuperDollar Club e-Commerce
-0.3
-1.9
-0.3
-2.3
0.2
1.7
0.10.3
-0.2
0.1
-0.4-0.2
-0.4
-2.3
-0.1
-2.4
0.6
1.8
% HH Buying % HHs Buying 1x % HHs Buying 2x+
52-WEEK PENETRATION CHANGE BY CHANNEL
Source: IRI Summit, April 2018; IRI CSIA- 52 Weeks Ending 2/25/18
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 35
97.6
65.859.5 57.9 52.5
30.6
Yet, 70% of U.S. Consumers Have Not Yet Purchased Groceries Online
52 Week Penetration by Channel
DOLLAR
$
SUPERCENTER
Grocery Drug Mass / SuperDollar Club e-Commerce
Source: IRI Summit, April 2018; IRI CSIA- 52 Weeks Ending 2/25/18
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 36
Service Changes: Amazon and Whole Foods Continues to Evolve Rapidly
Incredible
potential for the
industry and
consumers
Huge risk for
brands
Amazon & Whole Foods Exist in an Alternative Universe from Traditional Retail
• Challenger and niche brands rule
• Corporate scale doesn’t matter as much
• Hyper focus on local & ”non-corporate”
• Relate well to consumer needs
• Follow alternative play book
• Offering discount for Prime Members as of June
2018 – including fresh items
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 37
Consumers Seek New Service Options in Fresh Foods Specifically
36% of US
consumers 45% of
Millennials
would buy fresh foods online if faster delivery was offered
33% of US
consumers
of
Millennials
want fresh foods a part of grocery in-store pick up
44%
Update image Update image
“Delivery Innovations” have become much
more important to fresh consumers vs. prior year survey
Source: IRI Fresh Foods Survey, Dec 2017
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 38
Accelerating
Innovation in Order
and Delivery
Options…
Albertsons announces new Digital Marketplace providing for consumer-direct ordering and shipping Albertsons Companies 03/20/2018
Albertsons Companies and Instacart to bring same-day grocery delivery to 1,800-plus stores Progressive Grocer 11/28/2017
Kroger Announces 1,000th ClickList Store and Introduces Seamless Digital Shopping Experience Kroger Company Release 12/18/2017
Walmart plans to expand its popular Online Grocery Delivery option to more than 40% of U.S. households Walmart Release 3/14/2018
Amazon and Whole Foods Market announce the introduction of free two-hour delivery through Prime Now Amazon Company Release 2/8/2018
Amazon to offer discounts to Prime members at Whole Foods nation wideYahoo Business 6/26/2018
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 39
… Across the Retail Industry
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 40
Leveraging their existing
infrastructure, retailers are
investing in capabilities.
For food and beverage,
IRI expects that click-and-
collect will total over $6.6B
in 2020 up from $400MM
in 2016
2020: $6.6B
2016
$400MM
* based on IRI shopper survey and dollar share index
Click-and-Collect Has Become an
Important Part of Shopping
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 41
Conversion Opportunities by
Comparing Fulfillment Options
Click-and-collect models are winning
shoppers and driving online growth
for traditional grocery categories
67%of click-and-collect
shoppers say they
would “definitely” use
the service again
of users cite the
time savings as
a motivation
50%
* based on IRI shopper survey and dollar share index
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 42
Shoppers are more likely to use click-
and-collect for small trips, with 1-5
items that are needed immediately
22% said it helped them stick to their
list and avoid impulse purchases
1 in 4 online grocery shoppers consider
themselves impulse shoppers when in
the store
Click-and-Collect May Reduce the Dollar Ring at Retailers if
the Sites Do Not Offer Engaging Options for Impulse Items
Source: IRI Click & Collect Survey, January 2018
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 43
Key Takeaways
• Online and mobile are disrupting the
path to purchase for fresh food with
click-and-collect and delivery
• Presenting fresh foods online is a
playfield leveling, game changer
opportunity for new fresh items. Must
consider online and offline efforts to get
(and stay) in the basket
• Solving consumer needs is paramount
whether in-store or on-line; however,
impulse triggers cannot rely on fresh
appearance online. Opportunity to
create true personalized solutions.
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 44
CONSUMER
CUSTOMIZATION
ACROSS FRESH
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 45
Cooking Styles
are Changing
Driving the Need
for Solutions
In 2017, spending on
food bought away from
home > food made in
homefor the first time
Higher income
brackets spend the
least time on preparing
meals
SNAP participants
spend the most timeon preparing meals
Source: IRI Consumer Survey 2018, USDA
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 46
Need for Time-Saving Solutions Will Only Grow
Time Spent
Preparing Dinner
Continues to
Decline
43min
<21min
64+ 25-64
38min
18-24
Source: USDA
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 47
Traditional commodity-
Requires consumer to prepare,
assemble and/or cook to their
own taste and needs
Have at least one
step removed from
preparation but still
isolated from other foods
Packages components
together with a recipe or
assembly instructions
Completed prepared –
little to no work
necessary
$105B $17B $56M $12B
23% of Trips Include Another Element of the Continuum
Source: IRI Fresh COE Custom Analysis from Total Store View + Perimeter Market Advantage, MULO 52-weeks ending 6-17-18; excludes Perimeter Bakery and Peripherals
Step-Savers Need to be Considered in a Customization Continuum
Across the store, consumers seek step-saving solutions while retailers & suppliers seek to meet
their needs – but are we really satisfying every step of the journey to eat fresh?
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 48
76%of total perimeter
sales are from
Fresh Whole
Commodities
2ptsfrom 3 years ago
24%of total
perimeter growth $1.3Bin sales since 2014
added
41% cite freshness as the most important motivator of where they shop-
the number jumps to 44% among Millennials who shop at Specialty Stores
$105B
Source: IRI Fresh COE Custom Analysis from Total Store View + Perimeter Market Advantage, MULO 52-weeks ending 6-17-18 and IRI Fresh Foods Survey, Dec 2017
Fresh Whole Commodities Continue to be the Bulk of Perimeter SalesSlower Growth Rate and Innovation Eroding Share of These Items, But Still Vital to Perimeter Perceptions
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 49
SHARE
OF TOTAL
PERIMETER
PRODUCE MEAT
91.0%
SEAFOOD
79.1%
DELI MEAT
86.1%
DELI CHEESE
87.2%
3 YEAR
CAGR
YA
GROWTH
1.7%
0.8%
-0.6%
1.4%
1.6%
0.6%
-1.9%
-3.4%
-2.5%
-2.9%
82.4%
$105B
Source: IRI Fresh COE Custom Analysis from Total Store View + Perimeter Market Advantage, MULO 52-weeks ending 6-17-18 and IRI Fresh Foods Survey, Dec 2017
Fresh Whole Growth a Mixed Bag Across Departments and SlowingAdding Time-Saving Steps for Shoppers Still 20% or Less of Sales Across Fresh Departments
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 50
PRODUCE MEAT
-$841
SEAFOOD
+$165
DELI MEAT
-$302
DELI CHEESE
-$170+$2,488
$105B
Fresh whole commodities will always have a significant place in fresh sales, yet format
competition is fierce; creating value beyond price is key to ongoing fresh success
Source: IRI Fresh COE Custom Analysis from Total Store View + Perimeter Market Advantage, MULO 52-weeks ending 6-17-18
Without Produce, 2018 Fresh Whole Sales Would Have Been NegativeFresh Whole Commodity by Perimeter Department | Dollar Sales Change vs. 3 Years Ago (in Millions)
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 51
12.1%of total perimeter
sales are from
Value Added 1.5ptsfrom 3 years ago
49.7%of total
perimeter growth $2.8Bin sales since 2014
added
39% of consumers say availability of “pre-prepared/ready to cook ingredients” is very
important in choosing where they shop and only 8% say its “never been important”
$17B
Source: IRI Fresh COE Custom Analysis from Total Store View + Perimeter Market Advantage, MULO 52-weeks ending 6-17-18 and IRI Fresh Foods Survey, Dec 2017
Products With at Least One Step Saved are Fueling Fresh GrowthLetting Consumers Customize, While Still Saving Them Prep Time, Continues to Drive Higher Fresh Sales
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 52
SHARE
OF DEPT
PRODUCE MEAT
9.0%
SEAFOOD
20.9%
DELI MEAT
13.9%
DELI CHEESE
12.8%
3 YEAR
CAGR
YA
GROWTH
6.4%
2.7%
1.1%
2.5%
3.1%
2.8%
40.1%
23.9%
47.3%
21.5%
17.6%
Grab & Go pre-
slicing programs
have driven growth
in Deli Meat &
Cheese by making
fresh shopping faster
Source: IRI Fresh COE Custom Analysis from Total Store View + Perimeter Market Advantage, MULO 52-weeks ending 6-17-18. Depts shown in order of total $ sales with Produce driving
Saving Time for Shoppers at Home or During the Trip Leads to GrowthAdding Time-Saving Steps for Shoppers Still 20% or Less of Sales Across Fresh Departments
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 53
0.04%of total perimeter
sales are from
Meal Kits .01ptsfrom 3 years ago
0.2%of total
perimeter growth $13.4Min sales since 2014
added
Meal kit awareness is high, but only 22% of consumers say they’ve
actually bought one
$56M
Source: IRI Fresh COE Custom Analysis from Total Store View + Perimeter Market Advantage, MULO 52-weeks ending 6-17-18 and FMI/210 Analytics “Power of Retail Food Service”
Meal Kits are Evolving Out of Convenience and Taste ExperimentationThe Marriage of Saving Time Cooking at Home With Saving Time Shopping Across Store Aisles
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 54
Ready-to-Heat / Eat Prepared Foods Still Growing, But Competition is Fierce
8.8%of total perimeter
sales are from
Ready to Heat/Eat .05ptsfrom 3 years ago
22%of total
perimeter growth $1.2Bin sales in 2014
added
Time is the competition in Retail Food Service: 52% of consumers rank
SPEED as the 1st or 2nd highest decision factor for a quick dinner out
Sales Increases Have Cooled from the 2015 Peak as Store Expansions Plateaued, In-Store Foods
Amped Up Their Offerings and Restaurant Openings, Online Ordering and Delivery Expanded
$55.8M
Source: IRI Fresh COE Custom Analysis from Total Store View + Perimeter Market Advantage, MULO 52-weeks ending 6-17-18 and FMI/210 Analytics “Power of Retail Food Service”
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 55
Ready-to-Heat / Eat Trips Drive Traffic
and Connectivity Across The Store
Deli Prepared
Entrees & Meat*
What Else is in the Basket?
ISB Breads & Rolls
RFG Meals
ISB Desserts
ISB Morning Goods
Deli Cheese
Deli Meat
RFG Desserts
RFG Condiments
Fresh Seafood
Fresh Fruit
Frozen Fruit & Veg
SS Fruit & Veg
Fresh Veg
Coffee & Tea
Total Fresh Prepared
$12.3B
$ Spent in Rest of Store
$51$1.6B+5.4%
APPETIZERS
$5.5B+3.0%
ENTREES & PREPARED
MEATS*
SANDWICHES
$1.8B0.0%
SALADS
$1.8B-1.4%
+
If we could incent 20% of US households already buying Deli Prepared Chicken
to pick it up on 1 more trip it is worth to the grocery industry$995 Million
*Includes Rotisserie Chicken; IRI MA, Total US MULO, 52 WE 4/22/18, growth rate vs YAGO and IRI Shopper Loyalty Food Stores for 30MM HH transactions, 52 WE 6/17/18
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 56
Key Takeaways
• Solve the meal need – win the shopper
• Step-saving fresh items are not disconnected –
but on a continuum of choice that is to offer
critical across fresh departments
• Competition from beyond the store aims at
convenience – kits and ready to heat or eat –
must compete differently to keep these dollars
• Utilize consumer buying behavior to connect the
dots in-store and online
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 57
NEW
CONSUMERISM
How retailers meet
today’s consumer
demands
Fresh remains in demand
Competition fragmenting
Differentiation in value
and price is critical
Online disruption is here
for fresh. Must consider
online and offline selling
stories to get (and stay)
in the basket
Solutions, not siloes, for
shoppers across the
customization continuum
can unlock untapped growth
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 58
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 59
2018 Trend Launches & Educational Plan
Feb 22
Holistic Health
Convenience
APR 25
Food Transparency
Social & Cultural
Alignment
AUG 16
Customization to
the New
Consumerism
Customization
Continuum
SEP 13
Atomization of
Personalization
Connected
Consumer
OCT 2
New Supply Chains
Hyper Localization
Prepared Foods
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 60
THANK YOU!
Chris DuBoisSenior Vice President
Strategic Accounts
Jonna ParkerPrincipal
IRI Fresh Center of Excellence
New Consumerism & the Customization ContinuumWebinar 3 of 5
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