From The Spring 2005 Issue of Natural Grocery Buyer

Trendspotting

Whole grains: Kiss Wonder Bread and all its white-flour cousins goodbye. Keep your eyes out for whole grains, not just in breads but also in cereals, breakfast bars and other baked goods.
Tetra Recart packaging: It’s hip to be square with this new packaging that puts traditionally canned food into cartons.
Lavender: The trend continues of replacing citrus and pine in cleaning products with this calming scent. It will also scent personal care products.
Sweet and spicy: Think chocolate and cinnamon, fruit and peppers. Expect to see this flavor combo in products across the board.
Mediterranean diet: Move over, Atkins. Manufacturers will be rolling out products that reflect this healthy diet based on fresh produce, fish and red wine.

Source: Mintel

Pet pampering: After picking up “baby” from doggy day care, consumers stop by the store for some filet mignon and organic rice—for the dog. Hint: Add high-end pet SKUs to your pet offerings.
Male grooming: Wives all over the country will be making room for hubby’s personal care products—so you’d better stock ’em.
Fragmented household diet: Junior’s a vegetarian, dad’s doing low-carb and mom’s eating for her heart. Don’t market to families; market to diets.
Collective buying power: Consumers will want to know where their dollars are being channeled, and they will buy more confidently when they do. (Think Newman’s Own, which donates profits to charity.)
Healthier menus: Healthy options will appear on restaurant menus, in airports—even in vending machines. Home meal replacement will continue to evolve with fresh, not frozen, ready-to-eat entrees.

Source: The Hartman Group Inc.

Age complexity: Everybody wants to be a teenager. Children and adults are behaving more like teens in their dress and snacking habits.
Individualism: “I want it my way” is the slogan for many shoppers who want products made to their liking.
Sensory: Young consumers want intense experiences with extreme sports and a work-hard, play-hard lifestyle. They are ready to try new products and ethnic foods.
Convenience: The busy consumer wants portable, easy meals that go where she goes. Americans will spend an estimated $8.2 billion on snacks by 2008.
Health: Consumers are becoming more concerned about health. Americans will spend 38 percent more on functional foods and supplements by 2008. Manufacturers will succeed by supplying crossover products such as Actimel and salads to go.

Source: Datamonitor

—Anna Soref

Retailers go organic for Earth Day
Earth Day is slated to last the entire month of April this year, thanks to the efforts of a coalition campaign called “Go Organic for Earth Day.” The coalition is composed of retailers, organic products manufacturers and nonprofit groups, all partnering to raise awareness of the health benefits of organic foods.

Nineteen chains and more than 2,600 retailers, including Kroger, Publix, Giant Eagle and H-E-B, will participate. The Organic Trade Association is also partnering with the campaign, as is The Earth Day Network. And organic product manufacturers, including Horizon, Spectrum, Nature’s Path, Seeds of Change and Organic Valley, will be donating resources such as educational materials, in-store promotions and samples. “It’s going to be a point-of-sale program, with shelf talkers, posters, coupon books and two and half million action kits being distributed,” says Michael Martin, president of MusicMatters, the Minneapolis marketing company orchestrating the campaign.

“We hope by participating we can let our customers know that not only is organic food healthy, but it also tastes terrific,” says David Atkins, director of natural and specialty foods for Giant Eagle. “We’re looking at this as a great opportunity to entice consumers by offering a trial tasting of these products, with the expectation that they’ll come back and buy a lot more of these items from Giant Eagle.”

—Lynn Ginsburg

Specialty foods, smaller stores key to success
Traditional grocers: Find your target, aim and fire.

The message isn’t new. But recent reports showing mainstream grocers are losing market share and customers—chiefly to superstores—provide more evidence that they need to change to survive.

Traditional grocers held 56 percent of the market in 2003, a steep fall from 73 percent in 1998 and 90 percent in 1988, according to Barrington, Ill.-based Bishop Consulting, a food industry consulting firm. Bishop expects this channel will own only 49 percent of the market by 2008.

To compete, some grocers are catering to niches, building smaller stores and improving their perimeter departments, said Jim Hertel, Bishop’s senior vice president. “We’re seeing retailers increasingly turn toward specialty foods or ethnic foods—and especially merchandising those in prominent locations—as a way to communicate to shoppers that ‘we’re tailoring our offering to you,’” he says, noting meat and produce are critical areas for impressing shoppers.

Also on the decline: shopper visits. ACNielsen reports that U.S. consumers made an average of 69 trips to traditional supermarkets in 2004, down from 72 in 2003 and 75 in 2001. By comparison, shoppers averaged 27 trips to supercenters in 2004, up from 25 in 2003 and 18 in 2001.

Through interviews with consumers, ACNielsen has found that many place high priority on healthy eating and are increasingly shopping natural/organic stores, says Todd Hale, senior vice president of consumer insights.

“You’re also finding some retailers, like Kroger, focusing a lot more energy on healthy, organic sections in their stores,” he says.

As grocers narrow focus and product scope, they’re building smaller stores. The average size of a new supermarket was 34,000 square feet in 2003, down from 47,500 square feet in 2002, according to Washington, D.C.-based Food Marketing Institute. A recent FMI survey found that 12.6 percent of food retailers operate at least one store targeted to a specific market—namely to gourmet, Hispanic or natural/organic shoppers.

—Kelly Pate Dwyer